No double-digit increase

By Randy Bennett

Government cannot afford to give public servants in Barbados a salary increase exceeding 10 per cent.

That is the view of former Head of the Department of Economics at the Cave Hill Campus, Professor Emeritus Michael Howard. He believes such a substantial increase would be detrimental to the country’s economy.

Instead, Howard suggested that a five per cent salary hike similar to what was given in 2018 would be much more manageable, with the possibility of giving a further increase within the next two years once Barbados’ economy bounced back.

His comments came two days after it was reported that the National Union of Public Workers (NUPW), the largest public sector union in the country, had asked Government to give public servants an 11 per cent raise.

A few weeks earlier, president of the Democratic Labour Party (DLP) Dr Ronnie Yearwood, recommended a pay hike in the region of five to seven per cent.

Speaking to Barbados TODAY following Wednesday’s quarterly review of Barbados’ economy by Governor of the Central Bank Cleviston Haynes, Professor Howard said he fully agreed with Haynes that a significant salary increase for public servants would be detrimental at this time.

“I am supportive of the Central Bank Governor’s view that you can’t have too high an increase at this time given that it is going to be a year of a fall in economic growth and we’re not going to have much economic growth this year. So you cannot have a large salary increase at a time when economic growth is faltering or is slowing down.

“That principle guides my view that I don’t think that you should be going double digits in terms of a salary increase, maybe a five per cent might be good enough,” Professor Howard said.

The respected economist explained that although the cost of living had gone up and inflation was a factor, it was not possible for wage increases to match the rise in inflation.

“My view is controlled by the fact that this is a difficult year and even though prices are going up and so forth the wages cannot chase the prices because the prices will keep going up…Even though inflation is up, when you push wages up too it also fuels inflation again.

“Back in 2018 were difficult days too. That is something that you can build on and then come back a year or two years from now and if things look up get another five per cent,” Professor Howard suggested. 

randybennett@barbadostoday.bb