The good life is for the big boys

Nov 22, 2018 Features / Columnists, Peeping Tom

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The government’s announcement of sliding-scale salary increases for public servants may seem like magic but it is simply an illusion. It is no better than the PPPC’s 5%-8% annual increases.
The Ministry of Finance has announced increases for public servants. The increases range from 7% for those at the bottom of the salary scales to a ridiculous 0.5% for those earning at the higher end of the salary scales. It is not worth the effort to offer a 0.5% increase. (It would have been best if nothing at all was offered for those earning in excess of G$1million.)
The 7% is an illusion. Those earning less than G$100,000 will earn this increase while there is reducing scale for those earning higher. The overall increase will probably not be greater than 5% of the wage bill, especially since some workers will get 3%, some 5% and other 0.5%.
The advantage of this approach is that it grants a higher percentage increase to lower income earners. But this does not mean that their ‘backpay’ will be higher than those earning more than them. The ‘big boys’ are still carrying home a fatter back pay because their earnings are higher
For a worker earning $55,000 per month, a 7% increase means an additional $3,850 per month. This cannot buy an additional loaf of bread each day.
Workers continue to be humiliated with these annual increases. And the cost of living is increasing. It is not Christmas yet and a tray of eggs is already $1,000. What is going to happen closer to Christmas?
Over the past three years, the Ministry of Finance has been adopting a differentiated approach to annual wage increases. Rather than offering an across-the-board increases for all public servants, there has been differentiated approach whereby higher percentages are offered to those earning less than $100,000 and those earning more receive a lower percentage.
The method does have benefits, as mentioned before, but if it continues over an extended period it will result in serious anomalies. For one, a situation can well result in which an office assistant can end up earning more than his or her supervisor because of ‘bunching.’
The second problem is that increasing minimum salaries too high can have implications for the cost of labour and the cost of production within the economy. Many years ago, when the PPPC was in office, the Guyana Public Service Union (GPSU) had made a demand for the minimum wage in the public service to be $80,000 per month.
So imagine, had the PPPC been forced to concede to that demand by the GPSU. It would have meant at the time that a domestic, an office assistant and a cleaner would have had to be paid those sums and this would have had a ripple effect in the private sector and lead to increases in the cost of production. Labour would have become uncompetitive.
The third problem, and this is something that the government has to consider, is that, such an approach will lead to a loss of professional staff. Highly skilled and qualified employees are not going to be motivated to stay in the public sector when they are facing increase of 0.5% per annum, a rate that is likely to be less than the official rate of inflation.
If the government hopes to attract and maintain skilled professionals, it has to be able to reward them properly. An extended policy of offering higher increases at the bottom will lead to an exodus of professionals.
The approach to wages and salaries by both the PPPC and the APNU/AFC administration is visionless. As has been repeatedly emphasized in this column, what is needed is for the government to set a ‘living’ wage and then to negotiate with the unions as to how long it would take for the ‘living’ wage to be paid.
But this is not happening. Instead each year, increases are being imposed on public servants without agreement with their union. The APNU/AFC, like the PPPC, is honoring collective bargaining in the breach.
The teachers must now feel shafted. They received an 8% increase for 2018, while public servants got between 7% and 0.5%. The 7% is not far from the 8% which the teachers got, and what this means is that the gap between teachers and other public servants is still the same. This should not be; teachers should be among the highest paid public sector employees.
Less than two years before ‘first oil’, public servants are still clamouring for a ‘living wage’ and the GPSU is still protesting the disrepect for collective bargaining.
The good life is not for the workers. It is for the big boys who handed themselves a whopping 50% increase, and then under pressure from the public, were forced to turn it into a one-off increase which was still more than the combined increases for public servants over the past three years.

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