Sat | Aug 19, 2017

COLUMN: Aubyn Hill | Jamaicans suffer payslip erosion

Published:Friday | July 24, 2015 | 7:00 AM

Two days ago, a letter writer from Mandeville, Joneshia Bryan-Thomas, had a letter published in this newspaper that summed up the financial plight facing Jamaicans who have jobs.

The writer states that those in authority are taking workers' cash 'by force' from the pockets of Jamaican workers. There are various unflattering names for those who take people's property by force.

The letter carried the headline 'My heart shatters when I see my payslip'. The writer indicates the personal suffering from the malady of the disappearing cash.

Please spare a thought for those who do not have any payslips, have no food, or homes in which to live.

The payslip dismay and the resulting regular shortage of cash forced this letter writer into an informal but clearly informed and wise economic analysis. The serious cash erosion month after month is the result of being taxed, and taxed, and taxed again almost to near-insane distraction.

The relentless depreciation of the Jamaican dollar inflicts financial squeeze and pain on the stationary nominal salary, and that purchasing-power-reduced salary is taxed mercilessly by Peter Phillips and his assistants.

Gifts from relatives abroad are taxed, more taxes on electricity, cooking and driving gas taxed out of the affordable range.

The Internet is taxed; cable service is taxed; and the telephone service is very heavily taxed by Finance Minister Dr Phillips. The International Monetary Fund (IMF) medicine is behaving more like poison to ordinary workers.

CIVIL SERVANTS IN CASH BIND

My article on June 19, 2015 under the headline 'Government to workers: 'no more!'' provoked a number of responses and one was from an obviously but somewhat distraught civil servant. Here is the majority of the email.

"I have always found it amazing that some members of the private sector have the arrogance and insensitivity to make some of the public pronouncements that they do. Moreover, from my professional encounters with some parts of the private sector, I can safely say that people in glass houses should not throw stones.

"I am a middle-level public servant, which means that I have not been impacted as badly as those at a lower level. Nevertheless, the past five years have seen a steady decline in my standard of living. I have had the experience of going to the supermarket and panicking at the bill. Now, I frequently get headaches at the thought.

"Like many of my colleagues, I understand the position of the Government (it is government officials who prepare documents for IMF negotiations, negotiate with third states for assistance and draft or review the contracts/loan agreements which provide the financial support). But I am sick of the contempt, condescension and sheer ill will which characterise discussions about salary negotiations.

"When I and many of my colleagues are working the 10-12 hour days, 5-7 days per week year after year under substandard conditions without adequate compensation, how much longer must we wait? If you die on the job, say, because of the stress or the environmental conditions, the amount provided in death benefits isn't even enough to send a child through a decent prep school, given the current fees.

"One final word - many in the private sector assume the public-sector functions are irrelevant and can be easily done by others or not at all. Keep up the current approach and force the skilled experienced people out and they will discover the hard way, the very hard way, how wrong they are. Please keep writing."

MACROECONOMIC INSENSITIVITY

The civil servant's response to my article speaks of a steady decline in the person's standard of living. That is juxtaposed against the condescension, and even disdain, in which the email writer feels all in the civil service cohort are held by many prominent private-sector persons.

My observation is that there is a fairly pervasive macroeconomic deception which envelopes many government officials. It has spread to nearly all those who support the very burdensome austerity measures born of the IMF-devised debt consolidation programme.

We are told that debt as a per-centage of GDP is down, inflation is down, the currency has stabilised (but still falling!) and, by the way, growth is just around the corner.

All those macro numbers do not really mean a thing to workers who are skimping to buy food and pay for rent and utility services.

A couple of weeks ago, the Business Observer reported the following as comments made by the co-chair of EPOC: "It is not true that public-sector workers have got no wage increase over the past five years, as even though their wages were frozen, Government increased its public-sector wage bill by some 26 per cent. The EPOC spokesman said that from 2010 to 2011, the Government wage bill was 128 billion, while the 2014 to 2015 wage bill grew to $162 billion. 'How is that possible with a wage freeze?' he asked."

There are a number of possible answers. First, the number of employees on the government payroll may have grown signi-ficantly from 2010 and 2011 under the JLP administration to now under the current PNP-led government. Second, the EPOC co-chair must know that in some cases, it is alleged that pay is disbursed from government coffers to phantom workers.

This is the kind of comment that is sure to irk civil servants. They have not seen the 26 per cent increase mentioned in their denuded payslips. Indeed, the EPOC co-chair went on to say he did not know if every category of worker had received that 26 per cent increase, including groups like teachers, police and civil servants.

"Maybe there is an unevenness there that Government needs to see to," he was quoted as saying.

So, which civil servants did receive that macro number of 26 per cent pay increases?

Aubyn Hill is CEO of Corporate Strategies Ltd and chairman of the Economic Advisory Council of the opposition leader.

Email: writerhill@gmail.com

Twitter: @hillaubyn

Facebook: facebook.com/hillaubyn