The PPP is acting in the interest of its masters

Dec 17, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – The only reason why the government has not offered a decent wage increase to public servants this year is because of the PPP’s class alignment with the bourgeois class. The PPP is no longer the party of the working class; it has been co-opted by the bourgeois class.

The bourgeois class does not wish to pay or cannot afford to pay substantial increases to its workers. To do so would reduce the large amount of funds that is sent overseas to fund the lavish lifestyles of the members of the bourgeois class. It will also reduce their profit margins.  Because the interests of the PPPC government is now the same as the bourgeois class, the government is not predisposed towards offering a decent wage increase above the usual formula that was introduced under the Jagdeo administration.

That formula is that the government offers wage increases annual merely to compensate for a questionable inflation rate. And for good measure it throws in a few percentage points above this dubious inflation rate.

The government therefore continues with its long-standing practice of starting with a base of 5% which it either tops up or uses as a standard formula for wage increases. It fails to make accommodation for the fact that as much as one-third of the increase it offers is taxable and therefore the actual 6.5% it offers this year will in real terms end up being less that 5%.

The official inflation rate is not credible and does not accord with the reality which consumers face. Which government Minister will go and face a working-class crowd and tell them that he or she is convinced that the actual inflation rate for 2023 is below 5%.

The government’s pitiful offer to public servants has nothing to do with affordability. In the Budget for 2023, the government had set aside five billion dollars for cost-of- living relief. But as year-end approached it was clueless as to how to assign these five billion dollars. And even though it claims it has to act in the interest of all workers, it ended up using this sum of $5B dollars to pay a $25,000 bonus to public sector workers and to pensioners. If that $5B had been assigned to public servants, this along with the estimated $7.5B that it will cost the government to finance it wages increase to public servants for 2023, could have allowed for a 10% increase to public servants.

In any event, money or affordability is not the problem. The government has been constantly dipping into the Sovereign Wealth Fund to finance its infrastructural projects. If it wanted it could have dipped into the same Fund or it could have cut expenditure to finance a decent wage increase for public servants.

The bourgeois class is going to be happy with the wage increases the government has offered to public servants, this year, because this increase by the government is a powerful incentive to the private sector to avoid paying double digit salary increases to its workers. It will use the 6.5% to make a case that its workers should be content with less than double-digit wage increases.

The private sector manipulates the government because their interests are aligned. When the private sector has to increase wages for its employees, it looks to the government to cover some of these costs. One method employed is persuading the government to raise the income tax threshold. This results in an increase in disposable income for all workers, at the expense of higher taxes. The private sector can then communicate to its employees, “You are receiving more money this year than in the past” even though part of the increases is due to the waiving of taxes.

Simultaneously, the increase in the income tax threshold enables the private sector to avoid directly shouldering the full burden of higher wage increases. Consequently, raising the income tax threshold acts as a subsidy for private sector wage increases since the government, in the form of taxes forgone, provides an increase in disposable income to workers.

Vice President Jagdeo is correct in pointing out the prevailing fixation on annual percentage increases. However, it is worth noting that beginning with him, successive PPPC governments have actively adopted and promoted this approach in its wages policy for public servants. It is hoped that, given his recent realization, his government may now shift away from the practice of providing yearly percentage salary hikes for public servants and instead commit instead to paying a living wage.

But then again, such a shift will not align with the interests of the bourgeois class, as it could potentially impact the substantial funds, they send abroad annually to sustain their lavish lifestyles.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• Government, Jagdeo, Masters, public, servants

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