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Job losses ahead - Unemployment looms for 15,000 public sector workers if Gov't bows to wage demands

Published:Tuesday | June 2, 2015 | 12:00 AMGary Spaulding

The Government calculates that up to 15,000 public-sector employees could lose their jobs if it yields to the demands of the police and other public-sector workers for what it describes as unrealistically hefty wage hikes.

Horace Dalley, minister without portfolio in the Ministry of Finance and Planning with responsibility for the public service, warned yesterday that it was inevitable that instead of tripling the wage bill, "the bulk of displaced workers would be drawn from the lower-income levels of $1 million or less annually".

The warning comes as police and teachers adopted a militant stance yesterday as they protested against a five per cent salary hike being offered by the Government over a two-year period.

The lawmen and women are demanding billions of dollars in new allowances, atop the raft of old ones, which threatens to send the wage bill for all public-sector workers toppling. That bill has climbed from $147 billion to $165 billion over the five-year period of the wage freeze.

Dalley and Deputy Financial Secretary Wayne Jones made the disclosures in an interview by The Gleaner yesterday. They were supported by Finance and Planning Minister Dr Peter Phillips. He warned that to break the Government's reform progamme would be counterproductive, even to the very interest of the workers. "We have the choice of completing the programmes of reforms and rebalancing our public finances or breaking that programme and allowing the adjustments to take place over a much longer period."

Added Phillips: "We can either continue the efforts that have been made, with the sacrifices of the workers and the general population, including the taxpayers and bond holders, and reach the end results, or we can abandon what we have been doing, which means that the adjustment and the need for support from the International Monetary Fund and multilaterals will extend for a much longer time."

Dalley told The Gleaner that throughout the period of the wage freeze, salaries of the bulk of public servants, including the police, have been increased by up to three per cent annually, pushing up the wage bill.

"The increments have cost the Government an additional $18 billion over the last five years," said Dalley. "So the wage bill continued to grow throughout the period of the memorandum of understanding. Wages were never entirely static."

Dalley further told The Gleaner that in addition to the existing $16 billion wage bill for the police, the size of the claim from the Jamaica Police Federation is another $21 billion in the first year of a new contract.

"They are claiming $21 billion in year one and $12.7 in year two," said Dalley of the federation. He indicated that the claim was the greatest stumbling block in the negotiation exercise involving teachers, nurses, and civil servants.

Dalley revealed that teachers had agreed on all points of negotiations except wage levels. "We are pleased with the tenor of talks. Only salary is outstanding, and we have given a commitment to looking at the wage levels," he said.

While the Nurses' Association of Jamaica is yet to meet the Government around the negotiating table, Dalley said that meetings with the Jamaica Confederation of Trade Unions, on behalf of civil servants, were proceeding relatively well, with another meeting scheduled for next week.

He said the negotiations with the Police Federation were thrown into disarray, with the police team reneging on all the agreements that had been reached in the 54-point contract after a meeting with its membership.

Not only is the federation demanding increases on 16 existing allowances, but it has made demands for a slew of fresh ones. These include polygraph; information and communications; narcotic hazard/risk allowance; travelling; as well as "degree" allowances for officers who have attained law degrees, even if they were not being employed or utilised as lawyers.

"They are demanding an allowance for having attained a law degree, although the Government is not engaging their legal services," said Dalley.

It is understood that the federation is also demanding a special allowance for the policeman who "academically upgrades", even if it does not affect his daily duties.

Dalley disclosed that the new allowances alone could propel the wage bill by $1 billion to $2 billion, in addition to the 16 allowances, which amount to $1.173 billion.

He said that it is the Government's position that no new allowances would be added to the 16 existing ones.

As it was over the last two years, Dalley told The Gleaner that public-sector workers were still entitled to the $25,000, or $12,500 (depending on status), that would be due in August.