Barbadians are pretty reasonable people, who will generally listen to both sides of a contentious issue and provide a fairly balanced response.
Faced with rising inflation that has caused the price of food and consumer items to escalate by about 10 per cent over the past year, Barbadians have remained relatively calm about the situation, accepting the argument that much of the inflation is imported and beyond the control of our local retailers.
The International Monetary Fund (IMF) has supported the Barbados Economic Recovery and Transformation (BERT) in both its incarnations and has warned Barbadians and people around the world that rising prices will continue to be a feature of our existence.
According to the World Economic Forum, the IMF “predicts global inflation to cool to 6.6 per cent in 2023 and 4.3 per cent in 2024, which is still above pre-pandemic levels of about 3.5 per cent, but significantly lower than the 8.8 per cent observed in 2022”.
Listening to our radio call-in programmes reveals just how fearful Barbadians are about food prices in particular. They are becoming more vocal about their concerns and are focusing their ire on supermarket operators.
Anecdotal information suggests that people, especially those in the low and middle-income groups, are spending a significant portion of their wages and salaries on food, gas and transportation.
Weekly paid workers who may face the unfortunate circumstance of having to take two buses to their workplaces and two to return home, will be spending at least $70 per week in bus fare. This does not include errands and social events or even the cost of lunch.
One can easily see how transportation and food bills alone can eat away most of a low-income worker’s pay packet.
This brings us to the argument that has been made at the macro level insisting that workers cannot expect any significant pay increase as Government and the public sector workers’ representatives resume wages talks after a near two-months long break.
Public officers, who have not seen an increase in their wages and salaries for nearly five years must certainly be anxious to have the wages talks fully underway and negotiated in their favour.
Government is the single largest employer on the island and despite the very logical arguments of economists and advisors to government, workers continue to insist that the cost of living in Barbados has made it impossible to not have inflation considered as the major factor in the wages negotiations.
Barbadians are indeed reasonable people but they cannot ignore what is staring them in their faces every day when they go grocery shopping, visit a private medical facility, put petrol in their gas tanks or open the utility bills at the end of the month.
At the same time, the administration can make a sensible case that it has been working overtime to ensure that it puts initiatives in place to mitigate many of those inflationary conditions impacting the average Barbadian.
This week, Minister in the Ministry of Finance Ryan Straughn announced the administration would continue to provide an ease on electricity bills, removing a sizeable ten percent off the value added tax (VAT) charge, cutting it from 17.5 per cent to just 7.5 percent.
The VAT break will remain in place until September 2023 and represents a significant saving for thousands of households though it applies only to the first 250 kilowatt hours of electricity usage for residential customers.
The administration can also highlight its increased budget to the agencies assisting the most vulnerable in our society.
The National Union of Public Workers’ (NUPW) top officials have indicated that they must seek an increase for public workers who are being hammered by the rising cost of living. As thoughtful as the arguments are by representatives of government and our economists, it will be difficult to convince workers that they should settle for an increase that does not adequately respond to the current inflationary conditions.
Commenting on the state’s latest attempt to regulate prices impacting consumers, Straughn stated: “As with everything, as this Government has done consistently, we have put measures in place, we have monitored, and at the appropriate time, if decisions have to be made about extending relief, we will do so, given the context within which we are operating”.
The next few weeks of wages talks will determine just how accommodating public workers intend to be.