MOU IV: What will the workers get?
Orville Taylor, Contributor
One can argue that the wage freeze will protect thousands of public-sector jobs and, therefore, it will benefit workers more than the Government. After all, the Government and workers are between a solid rock and a hard place and cannot squeeze milk from stone.
The alternative is scary, large numbers of government jobs are now located in jeopardy, and the State is so broke it had to pass a law to legalise its misappropriation of the working classes' money which, in principle, it should have borrowed instead of doing a 'hold dung tek weh', as my mother often refers to the violation of the powerless.
Since the late 1970s, the Jamaican worker has been forced to make concessions to help the Government. This has been either because the International Monetary Fund (IMF) dictated it, or in the post-Fund period, because the country was in crisis, due to no fault of the dedicated workers, who have historically bent over so far backwards that they have halitosis.
Between 1977 and 1992, quantitative wage guidelines were imposed and workers could not get increases beyond the 10, 12 or 15 per cent the Government mandated. Interestingly, executives and owners of businesses did not have their earnings scrutinised by government watchdogs. As a result, the gap between rich and poor was wider than the mouth of a member of parliament sleeping during his own boring presentation.
It was a disaster for the Jamaican working class and, ultimately, it fuelled low-quality work, unstable jobs, increases in the numbers of the working poor and, ultimately, catalysed the crime rate. Yes, the crime rate is the result of the failure of the Government to do what is right!
For the 12 years between when the first sets of IMF agreements ended in 1992 and the economic crisis of 2004, it was not the workers' fault. Nonetheless, the public sector had grown like the waist of a portly politician from a modest 102,200 in 1999, to 119,800 in 2002. By the end of 2003, it had floated to 121,500. Some 12 per cent of the employed labour force received a government pay cheque in 2003.
BEWARE OF BLANKET ASSUMPTIONS
At a forum hosted several years ago at the University of the West Indies, Robert Wynter, in the most unflattering terms, declared, "... many public-sector employees are adding little or no value, while many others who do add value are underpaid". He continued, "... Approximately 90,000 persons on the central government payroll, only 39,000 (23,000 teachers, 4,000 nurses and 12,000 security forces) fall in these categories. This leaves a whopping 51,000 ... adding little or no value."
Wynter's argument is that the good are suffering for the bad, not with the bad. Certainly, the experts in public administration would disagree with him. Where would he place the engineers, mediators, lawyers, judges, doctors and accountants, among others? Of course, hospitals can clean themselves or doctors and nurses can double as janitorial staff.
The point is, it is a dangerous argument that the public sector is simply too big. After all, it is not like a Cabinet in which people are appointed despite having no qualification, competence or experience in administering a portfolio.
A public-sector memorandum of understanding was signed in 2004, accepting a wage moratorium. There were two others since then, and in each case the public sector had to forego wage increases. This is the umpteenth time government workers are cutting their eyes on their entitlements.
Nevertheless, saving public-sector jobs is not a 'welfare' issue. It suits the Government to have a reliable source of tax revenue. Public-sector workers comprise the largest and single most available set of employees that the State can collect PAYE and other statutory deductions from. These include the education tax, which somehow has not found its logical way into the coffers of the Students' Loan Bureau; and National Housing Trust, whose funds are now as available to be violated as money left in unprotected drawers.
Ironically, some government-owned entities owe the Trust money. Thus, reducing the public sector will decrease tax and other revenue and also pull money from the economy, therefore, slowing or reversing economic growth.
In principle, however, the MOU was a straight tit-for-tat, both sides getting milk from the tat. As with the present agreement, the unions accepted restrictions on wages and other emoluments and in exchange would see a preservation of employment levels, and enhancement of the workforce via training and education. The two-year wage freeze saved the Government J$6 billion in the public-sector wage bill in the first year.
On the other hand, Government's obligations were to manage the economy successfully, and it had specific deliverables. The difficult-to-tame heifer, inflation, should have been maintained within the range of 8 to 9 per cent in fiscal year 2004-05 and 6 to 7 per cent in FY 2005-2006. It was a good political commitment.
BAG 'A CHAT
However, it was just mouth talk. Economic targets of the Government were not met and in virtually every indicator it failed dismally. Inflation and economic growth were not only unimpressive, but outside of the expected or agreed levels. Then, the public debt grew, along with the frustration of positive economic outcomes, by 11.5 per cent from FY 2004-05 to 2005-2006. By the end of 2006, it reached J$847 billion.
Debt servicing during the life of both MOUs swallowed up more than 60 per cent of the Government's Budget. True, JDX II is counter to this, since the majority of the national debt was owed to Jamaicans, but there is yet no clearly publicised strategy as to how economic growth will be achieved and the overall developmental goals will be met.
Indeed, the traditional sectors of agriculture and manufacturing, which should be engines of growth, have not got the kick. The motivational speeches are good, but Government must be honest and open and the finance minister, in particular, needs to speak straight, and not from the side of his mouth, in telling us how the workers will be paid back.
How do we know that the Government will deliver on its obligations this time? What if large numbers of public officers are required to be dumped sooner than later?
Let it be made patently clear that the moratorium on wages is a debt to the Jamaican public-sector worker and, unlike the NHT withdrawal, it must be repaid. There is, at the verbal level, recognition by Government that the workers are making sacrifices in order that it may meet its fiscal targets. Hopefully, it might also translate into developmental goals.
What must be delivered to the government workers are: more housing solutions; better access to tertiary education and improved long-term benefits.
Concretely, we need to hear less of the diatribe and demagoguery and recognise that the majority of persons who are poor are also listed as employed. There are individuals who draw government wages who also fit in this category. This wage freeze will increase the numbers of those persons the Government says it loves most. The hierarchy of the public-sector unions and other associations which represent them must dot every T and not cross their eyes, because they could very easily sign away their birthright.
With pension reform, one must guard against the likelihood that many will retire after getting the same low salary for three more years and then get a more modest superannuation benefit.
Remember, the PM and MPs with 10 years or more service are taken care of.