Noted economist Dr Clyde Mascoll has issued a fresh economic prescription for Barbados; one which calls for a private sector to pay workers better in the face of the current domestic downturn.
Addressing the 54th annual general meeting of the Barbados Employers’ Confederation (BEC) today at the Lloyd Erskine Sandiford Centre, Mascoll argued that an increase in the disposable income of workers would greatly benefit the island’s economy.
“I come here to tell you something private sector people: Try and give your staff a salary increase because there was foolish notion going around [that you should not increase salaries],” Mascoll said.
However, he argued that “an economy cannot grow unless people consume and businesses invest . . . . So if you freeze people wages for six and seven years, increasing their taxes and prices going up, how can an economy grow, what are you waiting on? It can’t grow,” he contended.
He was speaking on the topic Only One Way Out.
Mascoll said if people’s consumption was restricted and they were not able to acquire different services, the economy was going to continue to shrink.
“I am saying to you as a private sector that disposable income has to go up. I am not asking you to simply go and increase salaries but I am asking you to put some incentives in place, either through productivity gains or whatever, to boost the spending power of the workers of Barbados. That is the only way that your business can succeed and thrive,” said the senior economist.
He added that in order to facilitate private sector investment there needed to be more public sector investment in infrastructure and human capital.
“Those are the two things that the private sector uses most from the public sector so they have to go hand in hand. That is why I am suggesting that in this environment the time for increasing taxation has passed. We should have done that two or three years ago. Now we are in such dire straits that we are finding that almost anything that can be taxed will be taxed by this Government,” added Mascoll, who is the opposition economic advisor.