The election outcome and the predominance of workers’ interest
The final outcome of the country’s 2016 General Elections has made one thing clear, and that is the interest of the working class has predominated over all other interests in the election campaign.
Anecdotally, what seemed to have swung the results in favour of the Jamaica Labour Party (JLP) is the intended relief from the burden of income tax for people earning up to $1.5 million. The doubling of the minimum wage seemed to have had a lesser impact, but both found attraction and stirred much debate among the electorate.
The appeal of the tax reform proposal was the fact that it was specific and direct. Every person earning up to $1.5 million took it personal; it was an appeal to the individual worker, and was directed to a class and for a class which spans the political divide, and with whom it undoubtedly resonated.
Other aspects of the 10-point plan, such as the proposals to fix our water infrastructure, to reform the National Housing Trust, the Housing Agency of Jamaica and the Mortgage Bank, and to invest more in skills training to create more jobs certainly did not get any traction. The specific, identifiable proposal to benefit the Jamaican worker was the one that won the day.
Even where such a proposal would seem to be counterintuitive, the People’s National Party’s (PNP’s) response turned out to be ineffective. For one, it was too general and was never a direct appeal to the individual worker. To say, in response, that the proposal would derail the IMF programme could not have been an attractive counter argument since the majority of Jamaicans see the country as moving in the wrong direction under the programme. To say that it would result in a massive tax package was insufficient to sway any worker from the attractiveness of the tax proposal, since it never provided any figures which he or she could plug into his/her calculator to offset against the $18,000 tax benefit.
In other words, any attempt to persuade workers that it was a ‘three card trick’ needed some specifics that were calculable. An attractive argument, of course, would have been the fact that it amounts to a ‘wage freeze’ and, in some instances, a ‘pay cut’, since no worker would want to earn an income of more than $1.5 million if it meant that he/she was going to be taking home less pay.
In a more general sense, the effectiveness of the JLP’s tax proposal, when raised in the context of the low voter turn-out and juxtaposed against the base support of the two political parties, raises some further questions.
The polls have consistently pointed to core support among the two major political parties of around 60 per cent. That core support is said to be significantly larger for the PNP than the JLP. If that is so, and less than 50 per cent of the electorate voted, then it would seem that a significant percentage of the PNP’s base never participated in the elections, resulting in their loss. The fact that the PNP candidates polled less votes in this election as against the 2011 election would confirm the view that this was the case. And therefore, one could readily postulate that if the $1.5 million was the single most critical factor in determining the final results, then it may very well be that the PNP’s core supporters stayed away from the polls since they could not vote against the one issue in the campaign with which they could readily and personally identify.
From a pragmatic standpoint, however, the implementation of the proposal is going to prove impossible in its current form, as it would undoubtedly create an industrial relations nightmare at the workplace. It would severely disturb and disrupt the pay structures existing within organisations unless, of course, those companies can adjust the salaries of persons earning $1 more than the $1.5 million by approximately 25 per cent to 30 per cent. But in a workplace setting where equity considerations, differential pay scale, increments and fairness are key issues of compensation policy, if you were to adjust the salaries of those above $1.5 million, then those below $1.5 million will demand a pay adjustment as well.
In most organisations, salary structures are important components that help to ensure that pay levels for groups of jobs are competitive externally and equitable internally. In a unionised setting, for example, unions have worked with managements to design pay structures to reward performance and skills development, and provide upward mobility and motivation to achieve efficiency and equity.
The JLP’s tax proposal would not only disturb the salary structure, but would defeat the stated objectives. Moving the threshold across the board to $1.5 million is a more equitable and workable proposal, except that the cost would outweigh the benefit, thereby inhibiting economic growth and job creation.
The one lesson, therefore, to take away from the $1.5 million tax proposal and its possible effect on the election outcome is the significance of a worker-centred agenda in the formulation of a broad macroeconomic strategy to generate growth and employment creation. Evidently that message was articulated better by the JLP than the PNP during this election campaign.
– Danny Roberts is head of the Hugh Lawson Shearer Trade Union Education Institute at the Consortium for Social Development and Research, UWI Open Campus