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EDITORIAL - Another MoU cushion in the making
published: Thursday | March 27, 2008
Mr Lambert Brown, the trade union man, is probably correct that the two previous memoranda between the Government and unions securing public sector jobs contributed to industrial stability and allowed the administration to move beyond "outing fires".
Understandably, therefore, Mr Bruce Golding, his Jamaica Labour Party (JLP), six months into office, is not about to rock any boats; not one so difficult to keep on even keel.
So, he is about to sign a third memorandum of understanding with public sector unions - after the ritual complaints and threats and rejection by teachers and nurses and the police. This agreement will, broadly, keep the wage bill for the coming fiscal year at just below the rate of inflation of nearly 18 per cent, and allow for another four per cent hike for the 2009/2010 fiscal year. In exchange for the employee restraint, the Government will further reward the public sector workers with a promise to retain around 15,000 jobs.
This arrangement worked - twice - for the previous administration, starting with former finance minister Omar Davies' initial success in getting unions to agree to a two-year freeze on wages. That allowed the Government to rein in a ballooning wage bill which, outside of debt servicing, was the fastest growing segment of government expenditure. Indeed, without this pact, the public sector deficit, expected to be around 5.5 per cent of GDP for the fiscal year that ends on March 31, would have been even more horrendous.
On that basis, as Mr Brown, president of the University and Allied Workers Union has said, the previous MoUs were good for Jamaica. Therefore, so will another MoU. Mr Danny Roberts, a senior official of the National Workers Union concurs.
We do not agree.
At least, neither Mr Brown nor Mr Roberts offered the full picture or the real downside of the MoUs. And neither will Mr Dwight Nelson, who now has responsibility for wage negotiations in the finance ministry, but in a previous dispensation as a trade union leader helped Dr Davies fashion the first MoU.
The truth is, the MoUs have provided the Government with a cushion against which to take tough decisions; and they have provided trade unions with an argument to workers about how they saved jobs. In the process, Jamaica is short-changed in terms of public sector efficiency and an environment for growth.
Essentially, jobs are kept in the public sector for their own sake and not because they add real value. In the process, a large number of people remain underpaid rather than paying fewer better, and creating the circumstance for the recruitment of more qualified and talented staff.
This course, though, is politically difficult and demanding of stern conviction and hard work. For cutting the public sector jobs cannot be a linear exercise, but requires a careful targeting of ministries and agencies. And it tends to lose political parties votes. It is easier, therefore, to pump the wage bill to say $100 billion this fiscal year and give more people a lesser amount of the increase.
Government officials and trade union officials can then tinker around the edges with redundancies, without having to do the fundamental stuff. And in this grand pretence, of pay and work, inefficiency is institutionalised.
published: Thursday | March 27, 2008
Mr Lambert Brown, the trade union man, is probably correct that the two previous memoranda between the Government and unions securing public sector jobs contributed to industrial stability and allowed the administration to move beyond "outing fires".
Understandably, therefore, Mr Bruce Golding, his Jamaica Labour Party (JLP), six months into office, is not about to rock any boats; not one so difficult to keep on even keel.
So, he is about to sign a third memorandum of understanding with public sector unions - after the ritual complaints and threats and rejection by teachers and nurses and the police. This agreement will, broadly, keep the wage bill for the coming fiscal year at just below the rate of inflation of nearly 18 per cent, and allow for another four per cent hike for the 2009/2010 fiscal year. In exchange for the employee restraint, the Government will further reward the public sector workers with a promise to retain around 15,000 jobs.
This arrangement worked - twice - for the previous administration, starting with former finance minister Omar Davies' initial success in getting unions to agree to a two-year freeze on wages. That allowed the Government to rein in a ballooning wage bill which, outside of debt servicing, was the fastest growing segment of government expenditure. Indeed, without this pact, the public sector deficit, expected to be around 5.5 per cent of GDP for the fiscal year that ends on March 31, would have been even more horrendous.
On that basis, as Mr Brown, president of the University and Allied Workers Union has said, the previous MoUs were good for Jamaica. Therefore, so will another MoU. Mr Danny Roberts, a senior official of the National Workers Union concurs.
We do not agree.
At least, neither Mr Brown nor Mr Roberts offered the full picture or the real downside of the MoUs. And neither will Mr Dwight Nelson, who now has responsibility for wage negotiations in the finance ministry, but in a previous dispensation as a trade union leader helped Dr Davies fashion the first MoU.
The truth is, the MoUs have provided the Government with a cushion against which to take tough decisions; and they have provided trade unions with an argument to workers about how they saved jobs. In the process, Jamaica is short-changed in terms of public sector efficiency and an environment for growth.
Essentially, jobs are kept in the public sector for their own sake and not because they add real value. In the process, a large number of people remain underpaid rather than paying fewer better, and creating the circumstance for the recruitment of more qualified and talented staff.
This course, though, is politically difficult and demanding of stern conviction and hard work. For cutting the public sector jobs cannot be a linear exercise, but requires a careful targeting of ministries and agencies. And it tends to lose political parties votes. It is easier, therefore, to pump the wage bill to say $100 billion this fiscal year and give more people a lesser amount of the increase.
Government officials and trade union officials can then tinker around the edges with redundancies, without having to do the fundamental stuff. And in this grand pretence, of pay and work, inefficiency is institutionalised.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.