THE EDITOR, Sir:
I HAVE noted the comments from sections of the media regarding my speech at the launch of the Jamaica Employers' Federation's 2003-2004 Salary Survey, earlier this week. The comments left one with the distinct impression that I was extremely critical of the trade unions for demanding the re-negotiation of a number of wage contracts in light of recent movements in the rate of inflation.
The fact is that workers anywhere in the world would naturally demand higher wage increases in circumstances where there is a dramatic movement in the rate of inflation. The Jamaican workers are no exception. Such a demand, therefore, could not conceivably form the basis of a criticism if we accept the natural tendency of workers to demand more under these conditions.
It is important for me to point out that while it may be reasonable to expect these demands, they should be realised, not only in the context of the ability to pay, but critically, through the capacity of the economy to sustain such increases through improved productivity. We have seen during the early 1990s that the high rate of inflation fuelled the demand for higher levels of wage increases that were not supported by corresponding movements in higher levels of productivity.
My colleagues in the trade union movement and the Employers' Federation are well aware of the necessity to maintain a low rate of inflation, and to seek to attenuate the link between wages and prices by focusing on productivity improvements. In the last seven years we have been able to achieve single-digit rates of inflation and many workers have been able to see real improvements in their standard of living as a result.
For too long, we have experienced the destructive tendency of the high inflation model, and the destabilising effect on the economy as a result of industrial unrests. I do hope that this time we can focus on achieving the framework for a compensation philosophy, which allows the natural demands of workers to be met through improved productivity efforts.
I am, etc.,
HORACE W. DALLEY, M.P. Ministry of Labour & Social Security
1F North Street
Kingston
