An insult! - Shaw says public sector increase can only buy two five-pounds chicken and four pounds of rice
DESCRIBING THE Government's five per cent wage increase offer to public-sector workers as an insult, former Finance Minister Audley Shaw has said it fails to take account of the erosion in purchasing power of the workers who have become poorer.
Arguing that the three per cent in year one of the wage agreement translates to $3,000 per month for teachers, which is reduced to just over $2,000 when taxes are deducted, Shaw said the offer represents an uncaring one.
"What dat can buy? Two five-pound chicken and four pounds a rice. That is what Horace Dalley and Peter Phillips and Portia Simpson Miller is offering to the public-sector workers of Jamaica," Shaw said.
"It is an insult to every public-sector worker of this country, and I will advise them and their unions to reject it out of hand because it is an insult to the hard work of the public-sector workers of this country," he added.
Public-sector workers have not received a wage increase since 2010, having signed on to two periods of wage freeze to ensure Jamaica would secure deals with the International Monetary Fund.
The Government has put a five per cent offer on the table for the 2015-2017 contract period, but it has been rejected by the workers.
Shaw, speaking at a divisional conference in Christiana in his North East Manchester constituency on Sunday, said a 35 per cent devaluation of the Jamaican dollar in the last three years has made it difficult for public-sector workers to survive.
Last week, Finance Minister Dr Peter Phillips said the Government will have to cut back on other forms of spending in the economy if public-sector workers are to get a higher wage increase than has been proposed by the State.
"We have to be able to ensure that our budgetary resources can be spent to a greater degree on the capital side and on growth-inducing expenditures as we reduce the debt," the finance minister said.
"We have to operate within the available resources. We are halfway through the programme. It is unusual anywhere in the world for a programme to have proceeded without hiccups, but the fact that we have not had any substantial hiccups does not mean that we are not facing a very challenging environment."
Under its agreement with the IMF, the Government must reduce the wage bill as a per cent of GDP to nine per cent by next year, a target that has been deferred by a year.
Wages as a percentage of GDP are currently estimated at 10.1 per cent for 2014-2015 and projected to fall to nine per cent by March 2017. The target set out in the fiscal rules is nine per cent by March 2016.
The 2015-2016 wage bill is projected at $165.2 billion, which is 9.8 per cent of GDP.