Economist say though the pay agreement is a welcomed ’cushion’ higher-paid officers will benefit more

By Emmanuel Joseph

A senior Barbadian economic consultant has said the new pay deal for public workers will disadvantage those lower on the pay scale.

Carlos Forte, who is based in Canada, said on Thursday that while the wages and salaries agreement reached on Tuesday between the Government and labour unions was reasonable overall, he has some reservations about several aspects of the contract.

The deal will see public sector workers getting a one-off tax-free payment of $1,500, a six per cent salary increase over the next two years and a 16 per cent hike in allowances up to 2025.

But Forte, Senior Consultant and Project Manager for Research, Valuation, Advisory and Economic Consulting for the Altus Group, said he had hoped the first three per cent increase would have applied to the fiscal year 2022/2023 “so that people would feel it was pretty much immediate.”

“With this particular agreement, they agreed to pay $1,500 across the board tax-free. It does appear to me that that was kind of a one-off, and therefore, when the three per cent over the first and second year applies, it would not be applied to a salary that represented the equivalent of $1,500 more a month,” the economist whose company is a leading provider of asset and fund intelligence for commercial real estate told Barbados TODAY.  

“Though it may seem like a good thing to get a lump sum, I don’t think that it is as beneficial as if the percentage had been applied for the year 2022/2023,” he stated.

“The other thing that seems curious is that overall, the agreement does appear to benefit higher-earning public workers more than lower-earning workers and that is unfortunate. The allowances are increased by 10 per cent in the first year 2022/2023 for the financial year which is about to end,” the senior economic consultant pointed out.

He added: “It is predominately senior public servants, permanent secretaries, ministers, other senior executives that are paid allowances and 10 per cent increase with an additional three per cent later on, is a more substantial increase cumulatively, than what workers at the lower end would be accorded in this agreement.”

Forte is contending that this aspect of the deal should have worked the other way around.

“I think the situation should have been in reverse where, perhaps I would have liked to see more lower-income workers receiving a larger overall bump and higher-income earners in the public service receiving a lower bump. The reality is that three per cent on $10,000 a month is far more meaningful than three per cent on $2,000 a month,” he asserted.

On a more conciliatory note, Forte said it was good the parties came to an agreement.

He believes that it will help to cushion some of the pressures public sector employees have been facing – like other Barbadians – over the past few years.

“It is not going to fully compensate for the erosion in the purchasing power that they have experienced over the last couple of years, but however, we all appreciate that the Government is in a very difficult situation fiscally; and therefore, I think overall it is reasonable within the economic constraints that Government has,” the top economist concluded.

The raise, according to a statement issued by the Ministry of the Public Service, will be given to “all persons who at March 31 of this year will have been working in the Public Service and in State-owned Enterprises (SOEs) that are dependent on Central Government for recurring financial support”.

“Those State-owned Enterprises not relying on central government for their recurring financial support will be encouraged to conclude any outstanding salaries and wages negotiations in short order,” the ministry added. 

 The ministry’s statement also disclosed that outside of the financial package, the parties also agreed on a series of non-salaried items “aimed at enhancing the overall employee experience of public officers”.

These include the creation of 22 master teacher posts and 10 specialist nurse posts; the establishment of a Grievance Monitoring Committee to meet monthly to track and resolve public officers’ grievances; a public service-wide regrading and job evaluation exercise to begin this year; and the inclusion of additional posts in the public officers’ loan and travel allowances framework.

“It is envisaged that the above initiatives, coupled with the increase in remuneration, will allow for the retention of valuable public service skills, upward mobility and the maintenance of harmonious labour/management relationships in the public sector and State-owned Enterprises,” the ministry declared.

The statement added that given the difficult and uncertain times, and in spite of being in an International Monetary Fund-sponsored programme, the parties regarded the agreement as “a fair, reasonable and sustainable settlement that recognises the importance and value of the workers within the public sector”.

The National Union of Public Workers (NUPW), which represents the bulk of public sector employees, welcomed the settlement as reasonable, while the Congress of Trade Unions and Staff Associations of Barbados (CTUSAB) described the negotiations as successful based on the principle of “give and take”.

The Barbados Workers’ Union (BWU) also embraced the contract, but General Secretary Toni Moore insists more work still has to be done to resolve outstanding employee grievances. 

emmanueljoseph@barbadostoday.bb