IF YOU WANT BACK PAY, JOIN THE ARMY

Nov 27, 2008 Features / Columnists, Peeping Tom

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There has been a flurry of announcements about developmental projects and investments. This is often a hint of underlying problems in the economy. These announcements serve to assure Guyanese that despite the problems, betterment lies in the future.

For sugar workers, the future unfortunately does not look good. Already thousands of workers are not turning up for jobs resulting in a shortage of manpower in the industry.

This situation is not going to get better after last week’s bitter harvest in the form of the arbitration ruling which handed to sugar employees of the GuySuCo an across-the-board six per cent increase, plus 2.1 per cent cost of living allowance.

Why there was a need to separate the award into a wage increase and a cost-of-living allowance is unexplainable.

All wages increases in the sugar belt under the PPP have been cost of living increases. The wages policy of the PPP government has been to compensate workers for inflation.

All of the increases granted to sugar workers have been marginally above the official rate of inflation. This has been just sufficient to cover for the inflation faced by these workers since rural inflation is higher than the national average. What amounts to wage increases over the years for sugar workers have therefore been cost-of-living adjustments.

The sugar union, GAWU, did not demand otherwise during the arbitration hearings. No one can accuse GAWU of making unreasonable demands for wages for 2008; no one can just accuse the union of asking for too much. In fact the union asked for nothing more than compensation for last year’s inflation rate, which was 14 per cent.

The 2007 wages of the workers were eroded by the 14 per cent inflation rate of that year. The stated policy of the government has been to compensate workers for the previous year’s inflation.

Thus all wages increases for any year ought to be higher than the previous year’s inflation. As I mentioned in the case of sugar workers, these increases have only been marginally higher.

Based on this principle, sugar workers were entitled to an increase for 2008, which would have been above the national inflation rate for 2007. The inflation rate for 2007 was 14 per cent. Sugar workers were entitled to 14 per cent plus.

The sugar union asked for 14.5 per cent. This was reasonable since they were not asking for anything higher than the inflation rate for last year. The increase they were asking for was simply a cost of living adjustment of 14.5 per cent.

Instead what they have received from an arbitration process that was said to have followed the principles of fairness and justice was a six per cent across-the-board increase and a cost of living allowance of 2.1 per cent.

This resembles closely, the pattern of increases arbitrarily imposed on public servants for this year. For 2008, traditional public servants were paid 5 per cent and a temporary cost-of-living allowance of $4,000 for those earning $50,000 or less.

For sugar workers, the increase is 6 per cent and a meager 2.1 per cent cost-of-living allowance, overall a less advantageous position than public servants.

I know many public servants are awaiting the big back pay that they have been receiving each Christmas from the government. There is not going to be any this year. The back pay was never a bonus.

It was really their increase for the year. The increase for 2008 has already been paid and so there is no increase to be paid for this year.

Public servants were forewarned. I warned them about it in the early part of the year but they did not heed my call. I pointed out to them that the inflation rate for last year was 14 per cent. Thus they should have gotten an increase above this. Instead they got 5 per cent, paid in January of this year.

In 2007 the government paid to workers a 5 per cent increase. This was just above the inflation rate for 2006. Thus the December 2007 increase that was paid as back pay was really the compensation for the 2006 inflation rate.

However the government, further, in January increased public service wages by 5 per cent for 2008. This was 9 per cent below the inflation rate for last year and means that workers have been effectively taking a 9 per cent cut in the value of their incomes.

There is not going to be any back pay this year for public servants. The first reason is that the increases for 2008 have already been paid in January of this year. Some persons may be hoping that the government will give the difference of 9 per cent for Christmas.

This will not happen because it would mean that for 2008 public service workers would then have received a 14 per cent increase while sugar workers would receive only 6 per cent increase.

This is something that the government cannot afford to do and therefore I wish to disappoint all of those public service workers who are hoping that they will receive a back pay for this year. There is nothing either like a Christmas bonus for public sector workers. There has never been.

The perceived bonus that public service workers have been receiving over the past five years have been their annual cost of living increase allowances, officially recorded as wage increases. If you want back pay, join the army.

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