With this island’s two trade major unions currently persisting with demands for double digit pay increases for their members, the Central Bank has issued a fresh word of caution that the economy can ill-afford any such fiscal strain at the moment.
Just last week the National Union of Public Workers (NUPW) issued a warning to the Freundel Stuart administration that it was fast running out of time to get the stalled public sector wage negotiations back on track.
NUPW President Akanni McDowall revealed to Barbados TODAY at the time that the union had written to the Ministry of Civil Service demanding a return to the bargaining table by today for talks on a proposed 23 per cent wage hike for its members who have not had a pay increase for nearly a decade.
However, in a brief statement this afternoon, the NUPW said to date no acknowledgement has been received from the ministry; therefore the union was prepared to take whatever action was necessary to bring the parties to the table.
Amid rising domestic cost of living, the Barbados Workers’ Union has also been pressing for a 15 per cent salary hike for its members.
However, based on the outcome of a performance review of the controversial National Social Responsibility Levy (NSRL) at the end of September, the Freundel Stuart administration is yet to say whether it can afford to meet the unions’ demands.
Asked by Barbados TODAY to comment on the situation during his nine-month review of the country’s economic performance, Acting Governor Cleviston Haynes maintained the position he had taken back in May that a wage increase was not affordable at this time, given the delicate state of Government’s finances.
“On a net basis we cannot be looking at increasing expenditure.
“When you talk about increasing wages, given our overall fiscal situation, we need to be looking therefore at savings elsewhere because when you increase your wages bill, you don’t increase the amount of resources available to finance it. And one of the fundamental issues we face at present is our ability to adequately finance our expenditures,” Haynes explained.
“So from the Central Bank’s perspective we would not want to see anything done that would impact on the Government’s ability to finance the expenditures that become due,” he added.
According to the latest Central Bank report, domestic inflation rates jumped to over three per cent due mainly to increases in food prices late last year and earlier this year. Today the bank also cautioned of the increasing likelihood of above average inflation due to rising economic instability.
“Taking our overall macroeconomic perspective [into account], we would not want any shocks that represents a worsening in the fiscal situation as we go forward,” the Acting Governor said while acknowledging that the proposed wage hike was a matter for Government and the trade unions to decide upon.