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Can't sacrifice balance on altar of wage demands

Garfield Higgins

Sunday, May 09, 2021

JAMAICA confirmed its first case of the novel coronavirus infection on March 10, 2020. Few will deny the Herculean job that our health workers and members of the security forces have done and are doing to protect the well-being of the citizens of this country. My support for these categories of workers has been steadfast.

On April 5, 2020 I wrote, among other things, in my The Agenda column in the Sunday Observer: “Our nurses, doctors, radiographers, epidemiologists, social workers, porters, laboratory technicians, ambulance drivers, indeed all categories of health workers who are on the front line working tirelessly to safeguard all of us are heroes. So, too, are the members of the Jamaica Constabulary Force (JCF), Jamaica Defence Force (JDF), correctional officers, and all other essential staff. Jamaica owes you all a great debt of gratitude for your selflessness. We need to thank them with more than just words, though.”

In my piece on October 11, 2020 I noted: “The Holness Administration has introduced several incentives to lessen 'burnout' of health-care professionals. This is good! I believe they need to do more. I think the Administration should deliver a one-off grant (payable in April 2021) equivalent to 25 per cent of one's gross salary for front-line workers. Money sweetens labour as much as encouragement.”

I continue to believe that these categories of workers deserve unique considerations during this pandemic.

Wage talks dilemma

Now that salary and fringe benefits negotiations for public sector workers are once again dominating the news cycle, I think it is as good a time as any for the Government to apportion the country's very limited resources in an unconventional and more efficient manner.

The Andrew Holness-led Administration has severely limited economic choices before it. The wage bill has not got any smaller. Our debt obligations have to be honoured on a timely basis. And the immediate, medium- and long-term costs associated with the novel coronavirus pandemic are skyrocketing. Will the Administration be able to walk on water or, as we say in local parlance, “mek blood out of stone”? Will the Administration be able to continue to belt out its “no new taxes” ditty, which it has sung at the close of a number of recent budget presentations? Or will it be forced back into a borrowing relationship with the International Monetary Fund (IMF)?

I see some on social media suggesting that Government should halt the infrastructure works on the St Thomas leg of the Southern Coastal Highway Improvement Project (SCHIP), shelve plans for the Montego Bay Perimeter Road, plus other major infrastructure projects, and use those allocations to pay salaries and fringe benefits. That would be the equivalent of cutting off our nose to spite our face. More accurately, such supremely destabilising actions would be tantamount to cutting our own throats.

If Jamaica is to realise her full social, economic, and political potentials we have to move away from stifling redistributive policies which bear little resemblance to our economic reality. Moreover, it is well established that, during periods of great economic dislocation, foundational infrastructural development is a critical ingredient/approach for fostering, among other things, economic recovery.

Hard times on the land

Three weeks ago Minister of Finance and the Public Service Dr Nigel Clarke told the country that, after careful analysis of the country's fiscal performance and projections, the Government could only afford to give public sector workers an increase of 2.5 per cent on salaries and salary-related allowances for financial year 2021/2022.

Frankly, there are some among us who don't give two hoots about the country's fiscal performance and projections. They only want their 'pound of flesh', and they will try and take it by near-any means necessary, even if it means the sinking of an already fragile economy which is fighting the gravitational pull of the catastrophic impact of what virologists and other experts say is the worst pandemic in the last 100 years.

I think the Government must strenuously, but cordially, resist any attempts that would result in the country being put back at the embarrassing juncture in which, a few years ago, we could not stop even a proper stale bread cart because of chronic indebtedness. In those day Jamaica was the laughing stock of the Caribbean. We were legitimately tagged with the ignominious nomenclature, “Poor Man of the Caribbean”. We must never travel that way again!

We must never, ever, again provide legitimate reasons for others, locally, regionally, and or globally, to humiliate us, publicly or privately. Until our economy is put back at its pre-COVID-19 growth trajectory, which some experts say will be achieved round about the end of 2023, all will have to make informed sacrifices for the common good.

'Dutty tuff'

Those who foolishly shout, “Give me what is mine and to hell with the rest of the country,” evidently have not noticed the economic devastation caused by the pandemic.

Tourism, our major foreign exchange earner and employer, has taken a battering over the last 14 months. In February, Minister of Tourism Edmund Bartlett revealed that Jamaica had suffered a $36.7-billion decline in direct revenue from the tourism sector into the Government's coffers in 2020. A report in this newspaper detailed the near-catastrophic economic impact: “This resulted in the closure of tourism establishments such as hotels, villas, attractions, shopping malls, and ground transportation islandwide, significantly contributing to a 50 per cent jump in unemployment and a total loss to the tourism sector of some $108 billion for 2020.” ( Jamaica Observer, February 5, 2020)

For those who cannot connect the dots between the fallout in tourism, the overall economy, and the Government's ability to pay, these details might help remove the scales from their eyes:

Headline: 'Government revenues decline by $73b in 2020/21'

The news item said, among other things: “Minister of Finance and the Public Service Dr Nigel Clarke says that the novel coronavirus pandemic's hit to the Government's revenues for 2020/21 has been estimated at an unprecedented decline of 11.3 per cent or $73.3 billion, compared to 2019/20 inflows.

“Dr Clarke told the House of Representatives last Thursday that the pandemic has generated both a health crisis and an economic crisis during the current financial year 2020/21.” ( Jamaica Observer, February 21, 2021)

These realities are not going to disappear by shouting, “Abracadabra!”

We are in an extremely precarious position. The Andrew Holness-led Administration is walking a severe tight rope of choices, primary among them, how to balance lives and livelihoods. I believe the Administration has done rather well, so far, to maintain a liveable balance for the majority of Jamaicans. This delicate balance should not be disturbed or sacrificed on the altar of wage demands that will result in ruinous consequences for the entire country. That calamitous error was made in the past. We are yet to fully recover from the dire effects. Holness should not repeat it.

Great shift needed

If we are going to get back to a pre-COVID-19 growth trajectory in short order we will have to dispense with some traditional ways of doing things in the country. For example, I know it is the done thing for governments in this country to make a wage offer which is then universally applied to all categories of public sector workers. Has this standardised approach benefited the country? Maybe some bright economist might do a thorough examination and tell us.

From my layman's perspective, I don't see where/how the age-old, one-size-fits-all approach has been to the significant overall advantage of the country. The rain falls on the just and unjust with the continued application of the all-purpose, all-encompassing wage increase matrix. It has marinated for 60 years, irrespective of time or season.

Can we continue along this trajectory? I don't think we can, or should, especially given the continual and precipitous drop in national productivity.

In 2018, “The Jamaica Productivity Centre reported that since the early 1970s Jamaican labour productivity has declined an average of nearly 1.5 per cent a year, meaning the average Jamaican worker has been progressively contributing less to national economic wealth over the past 40 plus years.” ( Jamaica Observer, May 16, 2018)

The Good Book says, “To every thing there is a season and a time for every purpose under the heaven.” (Ecclesiastes 3:1, King James Version)

I think now is as good a time as ever to engage the trade union groups on the thorny but crucial subject of harmonised salary increases and whether these enhance or retard worker productivity, economic position, and numerous other critical factors which are consequential to Jamaica's economic recovery, growth and development.

These are abnormal times. The 'same ole, same ole' approaches are going to only give us the 'same ole, same ole' results. According to a report on Nationwide News Network last Tuesday, the island's nurses and police have described the Government's 2.5 per cent wage offer as “insulting, and a slap in the face”.

I am not surprised by the rejection.

Recall that on November 22, 2020 I commented, among other things, in my The Agenda piece: “In a short while the public sector will be back at the negotiation table. Sources in some of the largest unions say any talk about austerity and/or wage freeze will not be welcomed.”

Recall this report: 'JTA readies to make wage increase demand on Gov't'

The story noted: “The Jamaica Teachers' Association (JTA) says, despite the challenges associated with the [novel coronavirus] pandemic, the teachers' union will be demanding of the Government what [it] says is 'rightfully theirs'.

“Byron Farquharson, secretary general of the JTA, said 'April 1, 2021, COVID or no COVID, we will be making our claim on the Government of Jamaica for what is rightfully ours.' ( Nationwide News Network, December 11, 2020)

We are now at the point where the unions are demanding what they say is 'rightfully theirs'. That is their job. The job of the Government is to protect the interests of the entire country.

Recall that during the supremely contentious public sector wage negotiations in 2015 Dr Peter Phillips, then minister of finance and the public service, famously retorted: “It nuh mek sense man try bruk empty shop.” As I understand it, the shop is not totally empty at this time, but it is certainly far from being well-stocked. The Government's ability to pay is two-thirds of wage negotiations.

Trade union sources who are not authorised to speak publicly whisper that a six per cent to 10 per cent wage increase on salaries and salary-related allowances is the pursuit for financial year 2021/2022.

I have done some basic calculations which tell me that if the Government were to agree to those demands it would effectively break the bank.

Trouble all around

Those who do not watch the news — like one of our former prime ministers — or those who have adopted the persona of a recluse, might not have noticed that the global economic and social meltdown caused by the rapid and unprecedented impact of this novel coronavirus pandemic continues to send shock waves around the world. Recent reports by the World Bank and the International Monetary Fund (IMF) say that the awful impact of the pandemic on the economies of the Caribbean and Latin America are particularly dread. The economic and social blight is visible all over the region.

Headline: 'St Vincent Gov't may soon be unable to pay salaries, pensions, NIS — PM'

These and other details were revealed: “If the prevailing economic situation continues, Government may be unable to pay salaries and benefits, Prime Minister Dr Ralph Gonsalves said on Wednesday.

“ 'I say this with all honesty, the way things are going… in one or two months…the Government may not have the $30 million every month to pay civil servants and to pay the NIS contributions to civil servants, those who are pensionable to pay the NIS contributions for current, and to pay salaries and wages,' Gonsalves said on NBC Radio.” ( Jamaica Observer, April 7, 2021)

Headline: 'Antigua Government says it cannot pay bonuses or advances to public sector workers'

“The fiscal state of the Government is severely challenged as a consequence of the [novel coronavirus] pandemic and its impact on economic activity since March 2020.” ( Jamaica Observer, December 12, 2020)

These revelations should serve as a 'tek sleep and mark death' instance.

One of the biggest lessons of this pandemic is that we have lost normal. Consistent with that reality, I think the Government would do well to introduce some kind of differential wage offer to our public sector workers.

Garfield Higgins is an educator and journalist. Send comments to the Jamaica Observer or