There will be no job cuts in the public service, Prime Minister Mia Mottley tonight promised, offering instead the prospect of forced savings of part of their earnings as the economy claws its way out of both a pandemic and economic restructuring.
Forced savings is the involuntary savings of an individual resulting from restrictions imposed upon spending, deferred income, insurance or other circumstances. The last time the Barbados Government attempted to withhold the pay of public officers, an eight per cent cut was instituted in 1991, which was credited with the saving the dollar. But although the withheld money was later repaid, the Owen Arthur administration amended the Constitution to outlaw a future pay cut.
In this case, Mottley said some of the salaries of public workers would be invested in bonds which would be redeemed at a later date.
But she said a final decision would be made in the coming weeks after further discussions with the Social Partnership.
The Prime Minister said: “We accept that we have a duty to be our brother’s and sister’s keeper. That is the Barbados that we know and that is the Barbados we must continue to embrace.
“The Social Partnership, therefore, discussed as well, the option that I raised on the last occasion on which I spoke, which is how do we best share the burden and do we not need to look at some level of adjustment on the part of those who are working, in the form not of wage cuts in the public sector but what we call forced savings; in other words to allow Government to be able to spend money on other things, particularly capital projects, to be able to get more people working.
“We do have to cut expenditure. We do not want to cut jobs and some form of burden-sharing is appropriate and I think I can fairly say that if that is the view of both the labour movement and the private sector then there should be no further job cuts for the sake of COVID-19, [but] there may always be job cuts for restructuring of institutions.”
The PM said some employers in the private sector had decided that instead of sending workers home, pay cuts ranging from 15 per cent to 100 per cent could be implemented.
She said this was in an attempt to prevent further job losses.
“The Social Partnership, both the private sector and the labour movement, advises that their members have been facing similar situations and in many instances they have asked workers to take cuts ranging from 15 per cent right up to 50 per cent but in some instances 100 per cent,” she said.
Mottley made it clear that those employees who opted to forfeit their entire pay cheque were those in a financial position to do so.