Inflation woes - US Embassy in Kingston begs Washington for wage increase

Burnt by rising prices in Jamaica, the United States Embassy in Kingston appealed to Washington to increase the salaries of the Jamaicans it employs.

In a June 2009 diplomatic cable acquired by The Sunday Gleaner through the whistle blowing entity WikiLeaks, embassy officials complained that the wages of its Jamaican staff or Foreign Service Nationals (FSN) were stagnating amidst high inflation in Jamaica.

"Jamaica has a long history of price instability influenced largely by currency depreciation. Prices rose on average by 13.4 per cent annually during the past six years," the cable quoted embassy officials as complaining to Washington.

"The (Jamaican) currency has depreciated against the US dollar by almost 30 per cent since September 2008. Public- and private-sector workers have generally been compensated for these price movements with salary increases averaging over 10 per cent during the last six years.

"In contrast, senior FSN salaries have continued to lag, averaging about six per cent over the same period. The stagnation of senior FSN salaries makes it difficult to retain and recruit top talent," the Kingston Embassy complained.

According to the cable, while Jamaicans employed in senior positions at the Kingston Embassy might be hired at a premium on their previous employ, this was quickly eroded as salary increases are irregular and, when granted, are at a discount to inflation.

"This is particularly stark given that salaries are paid in local currency. Salary increases (excluding benefits) especially at the more senior positions have lagged both private- and public-sector salaries and inflation," said the cable.

Threat of losing staff

The cable argued that uncom-petitive embassy salaries and benefits were expected to start affecting recruitment and retention, especially at the senior levels.

"In December 2008, Post lost its agricultural specialist (AS) to the Government of Jamaica. The AS, who was being compensated at Grade 11 (J$2.9 million or US$32,770), realised a 70 per cent premium under his new compensation plan, which totals J$5.1 million (US$57,630) including benefits," the cable said.

"According to the AS after he left the mission, the Ministry of Agriculture officials expressed alarm at the divergence of salaries being offered by the mission compared to the Government of Jamaica," added the cable.

The embassy further bemoaned: "Before the interviews began for an AS replacement, one prospective Government of Jamaica employee withdrew her application after hearing the salary offered for the position. Even more interestingly, the preferred candidate selected after inter-views also refused the position apparently because of the salary and chose to stay with her current employer, the Govern-ment of Jamaica.

"These are clear indications that mission salaries for senior FSN positions are not competitive enough to recruit top talent," said the embassy.

The cable warned that the low level of attrition at the embassy might give Washington a false sense of security as it again appealed for the salaries to be increased to the highest possible level.

"As the gap in salaries widens, the pace of attrition appears to be gaining momentum. Management in USAID, Peace Corps and State Department have all been approached by senior FSNs who have said they are looking at other positions in the private sector or with multilateral organisations that pay a higher wage," the cable said.

Concerned

It further warned that even Americans stationed in Kingston were concerned about their salaries, but it was the threat of losing qualified Jamaican staff which most worried the embassy.

"These senior employees are post's most valuable, and losing them would devastate post operations. We must act quickly to ensure that the compensation provided at Embassy Kingston is sufficient to halt the brain drain that has already begun," the cable said.

It added that its analysis puts the salary paid to Jamaicans at the embassy to as much as 35 per cent behind comparator organisations depending on grade.