Editorial: Salary increases and the economy

AMID all the talk and discussions taking place about the local economy, it is necessary to query whether the National Union of Public Workers (NUPW) is still bent on a getting a 23 per cent pay increase for its members across the Public Service. That level of increase was spoken about since last year and nothing has happened since then to suggest that the union has moved away from that position.

While many would appreciate that public workers have gone a long time without a pay increase, a 23 per cent increase at this time is certainly not in line with reality. The last time the public service saw a pay hike was in 2009. Since then prices in the country have increased significantly, falling only with the onset of the reduction in global oil prices which has led to some abatement in prices – although not to the extent that they ought to.

So if only from the point of view that prices were rising, then a good case can be made for the wages and salaries increase, although the amount demanded is rather elaborate. There are those who have taken issue with the amount, which, could push the wages bill close to one billion dollars. Some have suggested therefore that the Union come again in view of the challenges the Government has with its revenue position.

At the news conference the Prime Minister Freundel Stuart held in June last year, he made it known that a pay increase for public officers had to be taken in the context of the status of the economy as well as Government’s fiscal position. At the Fortress Investment Forum last November at the Frank Collymore Hall, Economist Charlie Skeete wanted to know what he was hearing (about that level of pay increases) while linking it to the challenges it would present to the existing fixed exchange rate.

Figures published by the Central Bank of Barbados at the end of last year showed that Government’s Wages and Salaries Bill was hovering around $800 million, which is still a sizeable amount for a country which remained in an austerity mode to correct certain economic imbalances. When it is also considered that the country has a high debt to service, and that the revenue inflows are expected to meet a large number of commitments, it does indicate just what the country is up against. As was reported recently, the Government has to find additional funds to meet the increase in pensions, and a whopping $50 million to pay in respect of increments.

Both sides need to come together to thrash out this issue. There must be give and take on this matter.

Maybe the NUPW might be pushing that figure so as to get a lower and a more reasonable amount given all of what is being said about the economy. It is a ploy which trade unions and others involved in negotiations have used to test the other side across the table. One can imagine that the Government’s negotiators will also be sticking to its position of not being able to pay in the present circumstances.

We are convinced that no one, not even the NUPW, would want to engage in a dialogue that affects the country and its economy.

Barbados Advocate

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