Should workers accept government wage offer?
The present public-sector wage negotiations are being played out true to form. It could have gone no other way, and worse is yet to come. There is going to be a settlement, finally, on terms agreed on by the Government and the public-sector unions reflecting mutual coercion only because they are indispensable to each other.
But before the truce, expect more threats and counterthreats, industrial action, protest and general instability in the public service, because that is the nature of the collective bargaining process we practise today.
What is conspicuously absent is any discernible leadership to take us on a new path away from this conjunctive approach to wage negotiations where we basically war over the division of limited, if not shrinking, resources.
The police were the first out of the blocks, with the teachers, nurses, junior doctors, firefighters and several other groups likely to follow suit. We are doing everything to make this happen - negotiating in the press, threatening job losses, demanding our pound of flesh for the years of sacrifice, issuing court injunctions, and taking some form of industrial action. The negotiations have no frame, no context, no definable outcome; they are a series of offers and counter-offers, threats, public spats, industrial unrest and truces in the end when we would have pulsated each other to near death. It is tragic and has all the makings of a zero sum game.
foundation for gradual recovery
This very instability is recognised by the GOJ-IMF agreement as the greatest threat to the programme. The programme's objectives, we must recall, are to achieve substantial growth and per-capita income. And although we are nowhere near achieving these objectives, the Fund's May 12, 2015 report, after the eighth review of the programme, records that "Over the past two years, Jamaica has adopted ambitious policy changes that have laid the foundation for a gradual recovery of economic growth and employment. Although painful in the short run, these policies are now starting to bear fruit."
We can readily identify with the pain, but bearing fruit? What is the IMF talking about? The Government is asking public-sector workers to hold strain a while longer, to return to be bargaining table to conduct the negotiations. But the Government has already said it cannot meet the demands of the public-sector unions, and so some unions are taking the issue to the street to force the Government's hand. This is the nature of conjunctive bargaining - them vs us.
By 2016-17, the wage bill must be reduced from 9.8% of GDP to 9.0%. That 9.0% is to remain in effect until 2020-21. The nominal wage figure has been projected to increase by 50 per cent over the same period, but this is predicated on an average growth rate of 2.5% per annum, a figure we have not been able to achieve over the last 10 years. What then are public-sector unions to return to the bargaining table for?
A wage increase beyond the Government's stated ability would be disastrous for the Jamaican economy. It simply is just not affordable. We have been here before, and the shouting, demanding and accusations will not help the cause of public-sector workers. We have been there, done that, and are no better off today. It is time to change the discourse.
The focus of the unions should be around forcing the Government and the IMF to the table to renegotiate the terms of the agreement. A proposal from the West Indies Group of University Teachers (WIGUT) is worth exploring, and that is reduce the primary surplus from 7.5% to 5.5% to free up 2% to be used to stimulate growth. The figure of 7.5% seems arbitrary and is certainly exceedingly high.
Primary surpluses in excess of 4% of GDP are considered extremely rare, according to leading economists. Greece's primary surplus is 3.0% and is likely to be reduced. The challenge we are having is that this exceedingly high primary surplus is seriously affecting the structural reform of the economy because we have had to be diverting incomes earmarked for capital development into maintaining the primary surplus target. Even the public-sector wage, as a percentage of GDP, is exceptionally high at 9.8% and needs to be renegotiated.
counter productive industrial action
The unions need to conduct a public campaign to get that discussion going between the IMF and the Government. Industrial action is simply counterproductive.
If we can get that discourse to soft-land the IMF programme before it crashes, we will then have to reframe the context of our wage negotiations. Some years ago, the Hugh Lawson Shearer Trade Union Education Institute introduced a model of wage negotiations known as interest-based bargaining (IBB). It was done precisely to prevent this current adversarial and contentious bargaining from occurring.
What IBB does it is to provide the context for both parties to assume that there is mutual benefit to be gained from the negotiating outcome. This is a process that should have started long ago so that we could come to the stage of avoiding the trap of bargaining over positions; separating the personalities from the problems; focusing on interests not positions.
Had the Partnership for Jamaica (PFJ) been active and the agreement signed by the social partners seen as a living document, we would have avoided all this. I have already said that the establishment of EPOC as an oversight for the IMF Agreement was unnecessary and that the monitoring should be done through the Partnership for Jamaica. Effective partnerships have been proven to be critical for stable economic and social development, democratisation and participative development, and in helping to reduce poverty, promote full employment and decent work.
We are not going to get out of this crisis by appealing to public-sector workers to be 'reasonable', by restating what the Government can and cannot afford, by demanding a 'reasonable' wage increase, by threats of layoffs, strikes, by court injunctions, sympathetic appeals or urging the unions to go to the bargaining table.
First, a framework document must be prepared by the unions, drawing reference from the WIGUT paper, to show that the IMF programme is failing and needs to be readjusted. Second, public-sector unions must mount public pressure through peaceful and lawful means to aid the Government in its request for a review of the certain conditionalities.
Third, the PFJ needs to become more active in forcing the Government to develop a comprehensive growth strategy that has the technical support of the ILO, the World Bank and the IDB. Fourth, a return to the bargaining table with a different frame should assist in bringing a solution to the present crisis.
We simply cannot downplay the human equation in all of this - in other words, the need to balance the quantitative targets with the objective of improving people's lives. If we fail to do so, we are simply raising the risk to the programme identified in the agreement.