With the Barbados economy seemingly on its knees, a former Central Bank of Barbados economist says it would be “reckless” for Government to increase the wages and salaries of public servants at this time.
Carlos Forte, a senior economist at the Ontario Ministry of Finance, has therefore seriously chastised the National Union of Public Workers (NUPW) and the Barbados Workers Union over their positions on the issue, saying they were “either misguided, disingenuous or unrealistic” with their demands.
The NUPW has been seeking a 23 per cent pay hike, while sister union, the BWU, has been pressing for a 15 per cent increase for public officers who have not had a pay rise in nearly a decade.
Following last May’s Budget, the unions have also been arguing that their members are now faced with greater hardships as a result of the $542 million austerity package announced by Minister of Finance Chris Sinckler, and should at the very least be granted a coping subsidy.
However, Forte warns that with the national debt currently standing at more than 140 per cent of gross domestic product (GDP) and Government still grappling with a fiscal deficit of about six per cent of GDP, it “simply cannot afford an increase in the wages of public sector workers at this time, and certainly not an increase in the magnitude that the unions have been demanding”.
“[In fact] it would be reckless to provide a wage increase at this time,” he told Barbados TODAY in a telephone interview from Toronto this week in view of the revelation made by then Central Bank Governor Dr DeLisle Worrell back in February that in order not to “cause disaster in the economy” the Central Bank was forced to come up with about $50 million every month to pay public sector workers because the Barbados Revenue Authority was not earning enough to cover the monthly bills”.
At the end of the first quarter this year, Worrell’s successor, Acting Governor Cleviston Haynes had also warned that if Government were to grant pay rises, it would be forced to introduce other measures to “compensate” for the additional expenditure.
With that in mind, Forte suggested that the Freundel Stuart administration was not without fault in this situation since in his estimation it should have formally negotiated a wage freeze back in 2010, so that today retroactive pay demands would not be on the table.
Forte also suggested that the Stuart administration had undermined its economic credibility on the issue by restoring the ten per cent it had cut from parliamentarians’ salaries on the basis that it was intended to be temporary and the 19-month programme had ended.
“Of course the 2017 Budget laid bare the folly of that argument,” Forte said, suggesting that Government’s timing on the pay restoration could not have been any worse.
“Quite frankly, my view was that they should not have cut their salaries in the first place as that was tokenism. Rather, as a demonstration of solidarity, the Prime Minister should have reduced the number of [members] sitting in the Senate and parliamentary secretaries,” Forte said.