Wed | Aug 23, 2017

Myrton Smith | No more crazy sacrifices

Published:Sunday | October 23, 2016 | 10:00 AM
Dr Myrton Smith

There have been repeated utterances in the public space regarding the public-sector wage bill. In those discussions, the public sector is spoken about as if the workers represent a yoke around the neck of Government that is almost single-handedly holding back our economic growth. It is time that the discussions take a different turn.

The public sector must be seen for what it is. It is not an inanimate object. It is a term that describes thousands of human beings who work tirelessly, for long hours, and for a salary that is a mere fraction of what many could earn working in the private sector or in other countries. They work as the arms of government that deliver the services that a Government must deliver to the people - health care, education, security. They are the collectors of the all-important taxes that are used to finance many of the services that our people enjoy. They carry out the research that forms the basis for many of the policies of government and that provide guidance on drafting legislation.

The public sector has repeatedly been asked to make sacrifices for the sake of Jamaica. For the 'greater good'. Government has repeatedly placed strict limits on the level of increases to be granted to public-sector workers, unlike private-sector workers. This has resulted in a widening in the gap between the rich and the poor or middle class, as Orville Taylor surmised in his Gleaner article of March 10, 2013. The first memorandum of understanding (MOU) was signed in 2004 imposing a wage freeze on public-sector workers for two years in exchange for "job retention".

During this time, as part of the agreement, the Government was to maintain inflation rate below 9% or public-sector workers could renegotiate. Of course, the Government failed to meet its inflation target. Inflation from June 2004 to June 2005 was 17.5% (according to STATIN). The dollar devalued and the public debt increased, squandering the sacrifices of the public sector. No renegotiation occurred. Instead, we had three other MOUs restricting the wages of public-sector workers.

The time has come for public-sector workers to be given the recognition that they are due because without them, the engine of government would grind to a halt.

We agree that the public services need to be modernised and become more efficient in the process of service delivery. To achieve this, four strategic goals have been identified. These are: enhancing service delivery; improving governance and accountability; managing for results; and improving change management and communication.

But since the public sector is not a machine that can be simply traded for a new one, 'modernisation' involves the continued training and retraining of public-sector workers. It involves finding ways to attract the best and the brightest to work in the public sector. This will require that the Government invest in the sector.

 

TACKING WAGE BILL

 

The public-sector wage bill, it has been argued, must be reduced to 9% of GDP or less. There are a few ways to do this:

1. Cut the number of public-sector workers.

a. This may well have the effect of leading to a contraction of government services. This means longer waiting times in areas where services must be delivered by an actual person such as in health care. Some services may be delivered electronically, which may improve efficiency, but we must remain vigilant for cyber theft or hacking.

b. This displacement could well result in an increase in the already high unemployment figures. It would be a ripple effect as public-sector workers, in turn, employ other persons as nannies, domestic helpers, and gardeners. We should also bear in mind that public-sector workers remain a reliable source of income tax under the PAYE system.

2. Divest some of the services currently delivered by Government into private hands. This might never occur unless the investment climate is improved.

3. Cut wages or salaries of the public sector. This would represent inhumane punishment for workers who have endured at least six years of wage freeze and reduction in benefits such as leave entitlement, pension benefits, gratuity, and health-insurance coverage.

4. Grow the economy and increase the GDP so that public-sector wages become a smaller percentage of GDP.

This MUST be the goal of government as our growth is currently very anaemic. The public-sector workers are positioned to be an integral part of the growth agenda if given the necessary support. We have arrived at this point in our history because of many years of mismanagement of our country - financial waste in government, run-with-it policies, and corruption. We applaud recent attempts to be more fiscally prudent, but it is inappropriate to serve the public sector up as the sacrificial lamb once again.

As the IMF and the vocal members of the Economic Programme Oversight Committee push Government to cut the public-sector wage bill while moving to increase jobs, they must be clear what they would want the Government to do. They must also provide solutions for dealing with the consequences of those actions.

Public-sector workers must also be included in the discussion if harmony is to be maintained.

- Dr Myrton Smith is president of the Medical Association of Jamaica. Email feedback to columns@gleanerjm.com and myrtonsmith@hotmail.com.