Demand 16% pay increase – Why?

Aug 31, 2008 Peeping Tom

Peter R. Ramsaroop, MBA
Chairman, Vision Guyana

INTRODUCTION:

Anyone working for the government should demand a minimum of 20% pay increase. I will explore the reasons why in this column.

We all are feeling the pinch of the cost of living increases and the fact is that our government has the ability to assist in reducing the burden on us the citizens but they are holding steadfast in not doing so.

At the end of the day, the numbers speak for themselves. Bottom line, the government collected over 75% more (equates to billions of dollars) in VAT revenue than they expected to collect. They have the money to give back to you, demand it.

For those in the private sector, the situation is less appealing as most businesses have had to cut back on expenses due to both increases in the cost of items and less consumer spending because government is taking all our money.

The only other way we can get back our money is in the reduction of taxes we pay and more importantly a tax rebate check for 2008. Let’s explore:

INFLATION: GUYSUCO WORKERS TAKE HEED
A 5+% increase in wages offered by GuySuCo for 2008 is ridiculous. With inflation in the double digits you will already be in a deficit. Further, when you look at the Consumer Price Index, you will not be able to feed your families.

The fact that we should have long diversified out of sugar begs the theory of keeping our citizens cutting cane versus modern day machines and re-training our sugar workers to more skilled jobs and the move to expand into Ethanol production.

Why the intent to keep these people poor baffles me, with the only answer that it is in the best interest of the Government to do so and not to see these workers and their families prosper.

A large percent of our population has for years kept this industry going at measly wages, and the sad part is that this government, while in the opposition, said it is one industry it would take care of when they got into power, yet they tax the poor workers at 16% VAT and take out 33% taxes and NIS out of their already low pay checks. Yet, when you ask for 14% increase they want to give you 5%.

So instead of getting into surviving mode, you cannot even take care of your families. We should be working to get you ahead instead of just surviving and expand the industry in order to get a better profit line.

At the end of the day, we know food prices have increased, and, compounded with the VAT, has put a burden on the consumers unprecedented in recent history.

2009 PROJECTION TO NOTE:

1. Your current electricity bill is already over 10% of your take home income. What will 5% pay increase do to help that? More increase in electricity and transportation cost is expected.

Imagine when the pre-paid meters come and you do not have enough money to put in the meters, you will have no electricity for your children to do their homework.

2. There is no sign of significant lowering of fuel prices. Therefore, transportation cost will go up for you to get to work and to get your children to school.

3. Imagine when you become a pensioner. How will you manage with these low wages now when you will not be able to get ahead to prepare for retirement?

4. Food prices are on the rise due to many reasons: poor drainage systems that cause our farms to be flooded and crops lost, increase in cost of production because of higher VAT on key items.

5. Government spent billions of dollars on Carifesta to impress other countries, yet they cannot negotiate in good faith a better increase for their own.

6. We have no free public transportation for our school children

7. You have to pay to send your children to University in order for them to have a future chance of doing better and even after that, there are no jobs for them.

8. You have to pay for after-school education for your young children because the teachers are paid the lowest in the world so they are all leaving for better pastures.

9. Billions of dollars are unaccounted for from the treasury according to the Auditor General’s Report, while your tax payer’s money are given away through concessions to a select few.

10. It is propaganda that VAT zero rated items have brought down prices as we have seen prices go up because the items to get the zero rated items to the market are all taxed at 16%.

In addition, the flour subsidiary that the government approved in May was only for a few months, so look for a price increase soon. The government also took 16% away from you since 2007. We all need it back.

CONCLUSION:
The ten reasons I gave for you to hold out for pay increases are just a drop in the bucket. Imagine what your fellow citizens such as teachers and police are faced with, considering their low wages too, and these are the people we want to prepare our children for the future and commit to providing protection and safety.

As I have said many times before, I strongly believe our economic state cannot be effectively divorced from the political condition we find ourselves in.

As a long-time student of economics and an avowed believer in the power of free markets and unfettered competition, I find myself very disappointed in what our nation allows from the public sector. We all must bind together to ensure we have a better governed country that puts its citizens first.

Sugar workers, continue to stand up for your families. We are all behind you and behind the need for all of us to prosper.

Email:[email protected] www.visionguyana.com