Higher public service wage increases are sustainable

Dec 19, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – Vice President Bharrat Jagdeo is concerned about the sustainability of public service wages. At his most recent Press Conference he implied that since the central government wage bill was close to $89B, large increases could render the government’s wages bill unsustainable.

It is an argument devoid of logic or basic common sense. The government’s revenues are escalating and will continue to do so as oil production peaks. Therefore, the government’s coffers will be flush with funds right through to and beyond the end of the decade. To suggest that larger increases in public service wages are unsustainable is not commonsensical.

Between the 20^th July and the 20^th September 2023 – a period of a mere three months, the government received almost G$ 80B in profit oil and royalties.  These revenues will increase further as production balloons. The issue of affordability therefore does not arise.

But, granted that affordability is not sustainability, is the government’s wages bill sustainable? The government has projected that central government wages bill will double by 2028 from its 2022 level. The government therefore has a sustainable wages policy.

Jagdeo says that the wages bill is already G$89B. But the total central government wages projected for 2023 was supposed to be G$109B (according to the IMF) which means that the government had an additional G$ 20B to play with. This along with the US$7.5B which the 6.5 percent increase cost this year could have easily allowed for public servants to receive a 20% increase in salaries.

But as argued in this column before, the private sector which controls the government, would not allow the government to pay a 20% increase to public servants since it may have to match that to its workers. The government therefore could have sustained a higher wage increase for public servants this year. Further shortchanging public servants is the fact that the government has increased central government employment through the employment of more than 10,000 part-time workers or an almost 20% increase in the total public sector workforce. The payment of these part-time workers takes a sizeable chunk out of the wages bill

But if the government is truly convinced that it has a sustainability problem when it comes to wages and salaries, it should begin to trim the public sector. The part-time jobs programme is a welfare scheme – many of those employed do not have sufficient work to do and can be seen malingering at their assigned workplaces. There have also been allegations that the programme is fraught with fraud, with some persons being on the payroll but not actually being employed. If the government is serious about sustainability, it also has the option of removing the bloat from central government. And what better place to begin that by trimming some of the fat out of the government ministries.

Several political lackeys are insecure employees. Their employment is not due to their ability or the work they can do but because of their political connections.  Many old PPPC political hands are employed within central government. There are questions as to whether these persons are providing value of money.

Some of them are long past the age of retirement. Their continued employment is denying younger members of the public service the opportunity to climb the ladder.

Almost all of the local persons who came out with statements in support of the PPPC government during the election impasse of 2020, have received some form of employment benefit with the government. Some overseas persons have also been so successful. This is the nature of the political system: one that rewards political loyalty over and above merit. The bureaucracy is too bloated. The PPPC inherited such a bloated system. Professor Tarron Khemraj, did an analysis of the government’s overdraft. He found that the PPP/C government inherited in August 2020 an overdraft at the Bank of Guyana of G$92.8B as opposed to G$9.3B in 2014 just prior to demitting office.

In his analysis he sought to examine the link between this overdraft and employment levels in central government. What he found was that when the PPP/C left office there were 14,905 workers in central government. But within a mere three years of the APNU+AFC taking office, this had ballooned to 26,354 or an increase of 76.8 percent. If Jagdeo is serious about sustainability, he should orchestrate a campaign to phase out persons above the age of 70 years from employment in the government; he should trim the number of workers in the public service; and he should move to retire some of the political loyalists who are feasting off the largesse of the State.

(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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• Bharrat Jagdeo, governments, increases, public service wages, Vice President

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