HEAD of the Hugh Lawson Shearer Trade Union Education Institute, Danny Roberts is warning that the approach to the current public sector wage negotiations will bear no sustainable benefit if the parties to the negotiations — the Government and trade unions — do not seriously examine the development of an incomes policy as a tool to address the current crisis.
"The downward pressure on labour incomes as part of the Government's attempt at fiscal consolidation may prove to be premature because of its deflationary pressures on the labour market and the absence of adequate consumer spending as a contributory factor to sustainable development," Roberts said yesterday.
He was responding to Monday's pronouncements by Finance Minister Dr Peter Phillips during a special media briefing held on the heels of a three-day emergency Cabinet retreat.
Speaking at the briefing, Dr Phillips said public sector wage negotiations will have to be settled to some extent before an agreement is inked with the International Monetary Fund (IMF). He added that the issue was one of several "prior actions" the country will have to settle on to satisfy the requirements of the lending body with whom it has been in negotiations for months adding that a firm commitment on wage restraint in the public sector is likely to be a prior action requirement of the programme as well.
He also said while the administration would not be cutting jobs it would be "accelerating the Public Sector Transformation Programme which aims at rationalising the entire Public Service for greater efficiency".
Yesterday, Roberts said "a properly defined incomes policy should be developed to bring about real wage growth, and importantly, the need to ensure that wage growth is coupled with productivity growth in order to offset any inflationary pressures".
"The present crisis requires a fundamentally different approach to the current public sector wage negotiation between the trade unions and the Government. On its present trajectory, the negotiations will inevitably lead to instability and unrest in the industrial relations system, which could undermine some of the targets set with the IMF," Roberts warned further.
According to Roberts, "wage deflation is not leading to a demand for labour, but rather, was inducing a fall in consumption which will worsen the unemployment situation".
He said Jamaica's long-term sustainable development "cannot rest on temporary employment programmes such as JEEP (the Jamaica Emergency Employment Programme)".
The provision of jobs under JEEP was a major campaign promise of the People's National Party in the lead-up to the December 2011 polls, which the party won by a landslide.
The programme, which the party says is its answer to Jamaica's chronic unemployment problem, is being funded with money redirected from the controversial Jamaica Development Infrastructure Programme, as well as from the Tourism Enhancement Fund.
Under phase one of the project, some $10 million was allocated to all 63 constituencies with over 6,000 persons reportedly being employed, the Government said.