Restructuring of public sector compensation was never going to be easy, though the necessity of such a reform has long been obvious. The inordinate complexity of the exercise, the sheer breadth and range of its application, the magnitude of the changes required, and the risk to any Government that embarked on such a process convinced many that this would never actually happen.
However, with the support of public sector unions and the dogged determination of many, we are now within striking distance of the most profound and comprehensive structural changes to public sector compensation by any administration. These changes are designed to simplify public sector compensation overall, improve transparency, increase equity and fairness, and improve compensation levels while retaining the sustainability of Jamaica’s finances.
At the point of delivering on an ambitious reform that promises improvement to tens of thousands, and that was once seen as remote and impossible, we are experiencing dislocation outside of recent experience. How can that be?
An old proverb offers some insight: “It is always darkest before dawn.”
Our torturous fiscal history has had unspoken costs
Jamaica has had a tortuous economic and fiscal experience over the last several decades and, as a society, we have not fully accounted for the impact. As we teetered on bankruptcy, with unsustainable public finances, public sector wages, the single-largest Government of Jamaica (GOJ) expense, were frozen for five years between 2010/11 and 2014/15. Unimplemented provisions of pre-existing memorandum of understanding (MOUs), which had a fiscal impact, were suspended. This, however, was not enough. Our fiscal rehabilitation required even more fiscal effort and yet more years of sacrifice. For the next five years, between 2015/16 and 2020/21, in an admittedly benign inflationary environment, wages moved by an average of four per cent with a freeze applied to most allowances while fiscally impactful sections of pre-fiscal crisis MOUs remained unfulfilled by fiscal necessity. And public sector workers were asked to, and have accepted, a four per cent increase for a further year (2021/22), with allowances frozen, which the economic onslaught of the global pandemic made necessary. The point is not the level of these increases but, instead, the fact that these agreements represented a long “standstill”. A plethora of structural inequities remained intact throughout this period.
Achieving these agreements of restraint with public sector unions over the past 12 years, across multiple administrations, has not been easy. In fact, it has been excruciatingly difficult. And there have been unspoken costs. For one, faith and trust in Government, as a permanent institution across time, to deliver for public sector employees has suffered over this period. Despite the success of heads of agreements, signed between the GOJ and union leaders, the trust deficit between Government and the public sector employees widened. In addition, the wells of public sector dissatisfaction with respect to compensation, swelled. Just recall and reflect. Year after year, for 12 years, a very similar and familiar gloomy message on matters related to compensation.
A long period of wage restraint has been necessary
To be clear, however, wage restraint has been necessary for Jamaica’s economic survival as is. And for completeness, Jamaica made a conscious and explicit social policy choice to retain the employment base of the public sector and instead pursue fiscal wage adjustment through sustained wage restraint instead of through workforce reduction. Barbados, for instance, chose a different path as their conditions are different. In the first year of their fiscal adjustment, in 2018, in response to their fiscal crisis, which was quite similar to ours, the Barbados Government laid off approximately 1,500 public sector employees (proportionally equivalent by relative public sector sizes to more than 10,000 public sector jobs in Jamaica) and maintained social peace. And Barbados laid off even more public sector jobs in 2019. They will likely have a different experience in the evolution of real public sector salaries as a result of these reforms. In our experience of 12 years of wage restraint therefore, while it is legitimate to acknowledge its impact, it is important to not see ourselves as mere victims. In the face of an existential fiscal crisis we, as a society, consciously and explicitly chose, and have since reaffirmed, our own path with its set of advantages and disadvantages relative to other choices that existed.
The forces of tension at work
I played an integral role in the process for the past six of those 12 years, first as Ambassador of Economic Affairs and then as minister of finance. We were only able to secure the agreements of restraint over the past six years, sometimes by slender margins, with repeated assurances, in the face of natural doubt, that the GOJ will implement comprehensive compensation reform. As such, much rides on this reform.
The credibility of unions, who persuaded employees to hold strain for 12 years, and wait, is at stake. There is concern, too, and speculation about the intended future of the public sector collective bargaining process, in the context of the absence of 185 allowances, the presence of which fuels advocacy and which, in the current paradigm, provides existential justification for the fragmentation of bargaining groups.
For public sector employees who have experienced an erosion of purchasing power over a decade and who have grown wary from a history of unimplemented promises there is an instinctive distrust that provides fertile ground for misinformation to grow. And when you have waited as long as public sector employees have, and you now sense that this change is imminent, but worry that it could adversely affect you, anxiety overflows.
For the Government and elements of non-public sector civil society, there is great concern that opening the door to this reform, after more than a decade of steely containment, does not inadvertently send false messages that lead to runaway expectations that threaten hard-earned fiscal sustainability and macro-economic stability. The Government cannot be the only stakeholder in the conference room that sees the absolute necessity of preserving Jamaica’s gains.
Understanding some of the dynamics unleashed by the imminence of a long-awaited reform
With the sense that implementation is imminent, these dynamics have the potential to create an unstable cocktail as we have seen. This is complicated by the misfortune of having to implement the restructuring of public sector compensation after a debilitating global pandemic, during a period of economic recovery and during the worst global inflation in 40 years, which has inflamed passions.
There is the further complication of sequencing of implementation. Who should be first? central government entities (civil servants, teachers, nurses, police, etc) or public bodies? Everyone has waited just as long. Now that the reform is actually imminent, this question has taken on real significance.
In some cases, over the past several years, bargaining groups representing public bodies, such as the National Water Commission (NWC), National Irrigation Commission, Civil Aviation Authority, Petrojam, and Broadcasting Commission, among others, were actually ahead of the rest of the GOJ in their agitation for such reform (that is, reclassification exercises). However, acceding to these requests, agency by agency, department by department, would only have entrenched and perpetuated the problem of multiple compensation systems, incompatible job evaluation bases, and a plethora of salary scales across government. What was needed instead was a comprehensive, across-all-of-government compensation reform. At various points over the last five years, and with much effort, we have been able to secure the support of multiple unions and bargaining groups representing these and other public bodies to wait on the government-wide compensation reform.
That reform is now here. It is not yet complete, however. Only through consultations can it approach a semblance of completion, though it will, by definition, still fall short of perfection. These consultations are underway. In this phase, the Ministry of Finance and the Public Service (MOFPS) has had first-round consultations with 45 of 47 public sector unions and staff associations that represent central government groups. In these meetings, vital information has been shared with the unions and staff associations, including new salary bands for their members, the slated actions for allowances, and a revised approach to benefits. We have asked our union partners to formally give us their feedback, which will inform the second round of consultations and provide an opportunity to clarify misconceptions and address any problems that they may have.
As this phase of the process has proceeded, in April and May, to date, and with round-the-clock meetings at the MOFPS with 45 central government groups, it has fed the misconception among many public bodies that they are being left out. After all, their managements and bargaining groups are, as yet, unable to supply reliable information on how the exercise will affect them, even as they are aware that colleagues in many other parts of the government have received information. Though we are closer than ever before, for some public bodies which were persuaded, years ago, to subordinate their own attempts at reclassification to the across-all-of-government reform effort, the perception that progress is underway for some, that they are not experiencing, has led to palpable discontent.
But consultation with all groups will take time. And we have to sequence these consultations. For better or worse we have made a decision to conclude consultations with 47 central government unions and bargaining groups first, to be followed by the 140 public bodies. Conditioned on progress with central government that facilitates timely implementation we project to engage public bodies by November, more or less consistent with the timeline provided to the NWC.
We ask for patience
We therefore ask for patience. We need the same patience which allowed the hard-working teams to complete four years of work, setting up the policy framework for this reform, engaging the public sector about its key elements, procuring and engaging the services of multinational consultants, collecting and analysing data on 110,000 jobs, designing and completing surveys, modelling, forecasting, and communicating. After enduring the road phase of this reform marathon, we have now entered the stadium and are actually on the home stretch in full visibility of the finishing line. It is supreme patience that got us here. As close as we are, we cannot now afford to collapse on the track. Instead, fuelled by that same patience, for just a few more months, we can make it across the finish line.
For other groups, as desirable as progress with the compensation restructuring is, it has only served to highlight that other issues are outstanding. The imminence of the compensation restructuring has intensified anxiety and frustration around these issues with the insistence that they be completed prior to implementation of the comprehensive reform. There is an eagerness to squeeze through other changes in what is seen as the wide door of comprehensive compensation reform. This is natural. However, while some of this is achievable, we have to be reminded that we cannot make “perfection the enemy of the good”. There are practical limits as to what this reform can achieve.
As our consultations have progressed, despite the efforts of our partners in unions and bargaining groups, partial and out-of-context information along with, in some cases, gross misconceptions have percolated the employee space and aroused concern. Given the complexity of this exercise and the breadth of its applicability, we can only address these inaccuracies, some of which are local and specific, with time.
What ‘no one will be worse off’ means
In the meantime, the blanket assurance, repeated over and over that, “No public sector employee will be worse off,” has been misconstrued to mean that we are inhospitable to consideration of what employees, correctly or incorrectly, see as detrimental. What the assurance instead means is that we expect thoughtful, analytic, rational, objective, reasoned, and expeditious feedback around the conference table in the next round of consultations and, where it can be proven that someone would indeed be worse off, we will endeavor to find a fix that does not violate fundamental principles of the reform. Of course, a most fundamental principle is maintaining sanity in the trajectory of Jamaica’s public finances as erosion of this would only undermine the sustainability of these reforms.
This is our country
In many ways, as a society, we have inherited and propagated the frames and narrative of oppression that emerged from power relations of a previous era and sometimes misapplied these frames, and the associated language, to situations that are structurally different. Contemporary violations by the State of fundamental rights, including the right to life has unfortunately provided justification. Inequitable access to quality education and other services, which are at the root of many social ills, undermines the sense that we have progressed from colonial times. And, partisan competition, where labels and accusations are hurled with reckless abandon, by all sides, to seek advantage from distress, ignorance, or confusion is also a factor that often disguises the tremendous opportunity we have.
This is our country. We all own it. We are all privileged to have entrenched liberal, democratic traditions, free elections, a free press, and an independent judiciary. Unlike many other countries, it is those with the least resources who power our politics. Just view the membership role of our political parties or visit an annual political conference. More importantly, through electoral and economic reform, that has defied international expectations, we have demonstrated the capacity to change our circumstances. We have agency, and the Government works for you, for all Jamaicans. Unlike in times past, we are your brothers and schoolmates, we are your daughters and neighbours, we are your children and share the same church family. We are available and accessible.
A perceived slight, real or imagined, by an underappreciated and hard-working financial secretary, even with emotions running high, ought not to kick the can over. The grotesque unfairness and inequity of public sector compensation affects her more than many. She, like thousands of others, has endured this with dignity and served her country with distinction through an excruciatingly difficult period. You may not know her pain, but it resembles yours.
A chronic deficiency of resources and inefficiency of our systems explains much of our problems, and not indifference. This is why this compensation restructuring reform is so essential. The efficient use of resources is a developmental imperative. A fair and equitable compensation system is essential to attracting and retaining the talent needed to design and manage an efficient bureaucracy. A compensation system that delivers livable pensions is a key component of generational equity. A simple compensation system is critical to accomplishing more in the same time, a boost to national efficiency and productivity. And a transparent compensation system is important for employee satisfaction and an economically stable Jamaica.
We have approached this reorganisation of compensation with ambition. The public sector has been through a long night, and the day of reform finally approaches. But it is always darkest before dawn. Let not the darkness of this brief predawn period lead us to stumble as a society. Kicking the can over, even if unintended, will only further delay the emergence of daylight, and even then, with spilt milk, daylight could not be sustained. Patience and orderly discourse, on the other hand, will allow a sustainable dawn to emerge.
Dr Nigel Clarke, DPhil, is Minister of Finance and the Public Service and Member of Parliament for St Andrew North Western.