EDITORIAL - Let good sense prevail

WE can all agree that this country’s public servants deserve a pay hike, not having received one since 2009. And since then, whatever increase was given to them back then would have been eroded by the persistent rise in the cost of living, caused by a number of factors in the economy.

For instance, it is recalled that in 2008, the dramatic increases in oil prices turned most things on their heads. Businesses had to cope with the higher cost of inputs in their operations and wherever one looked – be it Barbados or in other oil-importing nations – inflation ran into double digits.

As a result, prices for food and other critical items went up, leaving consumers no choice but to pay the prices demanded, or cut back on their purchases. So one understands that situation, even if prices have fallen since the collapse of global oil prices.

However, what we cannot endorse is the level of pay increases which the National Union of Public Workers (NUPW) said it would like to have on behalf of the public servants.

Reports indicate that the NUPW, which is the largest public sector union, is seeking a 23 per cent increase from the Government. What is even more disturbing is that the union has threatened to take action once the amount requested is not forthcoming. The NUPW has apparently been using the improvements shown by the tourism industry as another premise for their demands.

In our opinion, a 23 per cent pay hike is extravagant and there is no logic why the figure should be tendered, assuming the press reports are correct, in Barbados’ prevailing economic circumstances.

It seems like the people who are behind this pay demand are either not aware of the present status of the Barbados economy, which simply cannot afford that level of increase; or maybe they are indulging in a negotiating strategy which says that you start high to get an amount that is reasonable. That has always been a ploy used in the bargaining process and very often it has worked.

The Union would be quite aware that the Government is being pressed and repeatedly so, to cut the size of the public service, which is touted to be very inefficient and overstaffed. Indeed, one of the reasons for the low rating which Barbados continues to get in the World Bank Doing Business Survey is mainly the government sector. In other words, productivity in the public sector and likewise the private sector is very low.

Any pay increase of the magnitude that the NUPW is seeking will create a lot more harm than good for the economy. It will lead to a surge in Government expenditure which at the moment is too high, and a ballooning fiscal deficit, which is still to be brought down to manageable proportions.

It will trigger more spending and an outflow of the slender foreign reserves which the country is looking to bolster.

Could the proposed wage hike force the private sector employees to seek a similar increase? So far the cost of living in Barbados has gone up significantly – either as a consequence of price gouging as a result of the National Social Responsibility Levy (NSRL), or both. Now is the time for cooler heads to prevail on this matter.