Hike wages and watch the economy return to growth and productivity take off, a leading union executive has proposed.
Treasurer of the National Union of Public Workers (NUPW) Asokore Beckles reasons the Government’s current thrust to reverse the island’s economic fortunes using a profit-led strategy had proven to be all wrong and it was time to refocus with a wage-led growth strategy.
“We cannot continue to keep measures in place that stifle demand and productivity,” Beckles warned in a paper entitled, A Salary Increase is Necessary for Economy Growth and Productivity.
Setting out his argument, Beckles explained that under the profit-led strategy which features wage restraint, production falls leading to fiscal deterioration and increased borrowing by governments.
Citing Barbados’ case, he pointed out that since the 2008 recession workers had been “severely disadvantaged by Government’s economic policies which included increased taxes, job losses and a reduction in benefits among other things”.
Beckles charged that this model had not only failed to stimulate the economy but had become “increasingly destructive”.
“The destruction is evident in the job losses, closure of small and large businesses and an overall feeling of frustration, while not solving the intended macroeconomic problems of the country,” he argued.
Charging that workers were now forced to rely on credit to meet their demands for goods and services, Beckles was adamant that an increase in income would drive consumption demand and lead to a turnaround.
“This in turn leads to more production and by extension, economic growth over the short-term. This inspires a marked accumulation of capital over the long-term.
“It is now accepted that the vast majority of economies need a more sustainable wage-led growth strategy. This is because the increase in the labour share of output/income would promote an increase in demand and consumption.”
Beckles’ comments came as the NUPW anxiously awaits the resumption of negotiations for a salary increase for the island’s 9,000 civil servants, particularly since Government lawmakers this week approved the restoration of the ten per cent cut from the salaries of parliamentarians and other senior civil servants in 2014.
The union has demanded a 23 per cent rise.
NUPW President Akanni McDowall told Barbados TODAY after the parliamentary vote that “the last negotiations in relation to salary increases would’ve been in October last year and since then [the NUPW has been trying] to get a meeting with the [Government] to continue negotiations, but to no avail”.
Yesterday, the Congress of Trade Unions and Staff Association of Barbados (CTUSAB) also backed calls for a pay rise for public servants.
“It is probably better for us to interpret it . . . [as] a signal that our economy can afford to provide some type of increase. So we are looking at it from the point of view that if that can happen, then as unions we can expect that when we go forward that we would suitably be able to get an increase,” CTUSAB President Cedric Murrell said of the restitution of the ten per cent.