#BTEditorial – Pay increase call cannot be dismissed

Senior economic advisor to Government Dr Kevin Greenidge has made a strong case for the administration’s resistance to demands from the public sector for a pay increase.

But that cause may be undermined, for a very good reason. It is the Government’s own assertion that the island has achieved a remarkable 10.5 per cent economic growth in the first six months of 2022.

This country’s public servants are going to be very unconvinced that the administration must continue what is effectively a wage freeze by another name, when at the same time, the island is being applauded by the International Monetary Fund (IMF), the Barbados Economic Recovery and Transformation (BERT) Monitoring Committee for hitting all its economic targets.

The National Union of Public Workers (NUPW) must certainly now request that maybe it is time to put some key social indicators on the Monitoring Committee’s list of targets to test the effectiveness of the BERT programme.

In his half-year Economic Review, Governor of the Central Bank of Barbados Cleviston Haynes told citizens government was expecting several major investments that could bolster the economy even more.

Though he conceded that the projects were “coming on stream at a slower pace than anticipated and construction costs were rising”, the economic experts at the Central Bank  are still predicting economic growth in the range of nine to ten per cent, “with the possibility of a stronger outturn if tourism is more favourable than currently forecast” for the second half of the year.

The administration is also boasting of its record level $3 billion in foreign reserves. This was as a result of increased tourism activity and the last draw down of funds from the IMF.

In his report to the nation on the health of the economy, the  Governor also highlighted the elephant in the room that cannot be ignored – skyrocketing prices.

He observed that the spike in import prices which is hurting many struggling households, continued into the second quarter of the year. He disclosed that spending on imports for the first six months of the year surged to historic levels as a result of rising prices.

To its credit, the Mottley administration, with the assistance of the local private sector, presented a wide-ranging and well-presented plan to attack food prices and electricity.

As worthy as this may be, the demand by public sector workers and their counterparts in the private sector for a wage increase has not been diminished.

The hold on prices of a limited number of items is a six month initiative, and though significantly helpful, cannot replace the need for a wage increase.

The cost of services such as insurance, health care, child care, and construction services, for example, have all increased.

We understand Dr Greenidge’s argument that a salary increase for the public sector would likely result in similar demands by workers in the private sector, and thus begin a process of the dog chasing its tail.

Be that as it may, one has to consider the human and social toll that rising prices are inflicting on families trying unsuccessfully to meet the cost of daily living.

NUPW general secretary Richard Greene was recently quoted in the media. “We still must sit down and look at where the rise in prices would have gone from since the last salary adjustment,” he said.

Greene added: “It is not only a consideration of the rise in cost of living caused by the war in Ukraine, even though there is some measure of reduction now because of the steps taken by Government.

“But the levels of inflation would also have affected the price significantly over the last several years. Therefore, consideration still has to be given to looking at where people’s purchasing power is now.

“We have to also consider that everything has gone up across the board and people must still be able to operate in an environment where they can still move forward as consumers and in life in general.”

If Government is saying, on the one hand, how well it is doing in attaining the targets set by the IMF, that it has more than enough foreign reserves in store to support expansion of the economy, that many job boosting projects are in the pipeline, and the unemployment rate is returning to pre-COVID-19 levels, then certainly, it can and must consider the pleas of public officers for an increase in salaries.