Robert C. Wynter,
Contributor
FORMER UNITED States Ambassador to Jamaica, Gary Cooper, remarked that in his home state, persons are congratulated on the successful completion of a major task or the achievement of a major objective.
In Jamaica, however, he noted that the largest cheers and congratulatory remarks are made whenever there is announcement of a major task to be undertaken or the
establishment of an objective to be pursued.
The goodly Mr. Cooper was not very much liked in Jamaica because of these and other comments made and there were very few tears shed on his departure.
This "Cooper Syndrome" has continued unabatedly since his departure, with the latest being the signing of the Memorandum of Und-erstanding (MoU) between the Government and members of the Jamaica Confederation of Trade Unions (JCTU) on Monday, February 16, 2004.
Before any significant performance objectives have been achieved, the process has already been hailed as a huge success by the partners, by the media and by the respective presidents of the Private Sector Association of Jamaica and the Jamaica Employers' Federation.
PUBLIC SECTOR JOBS
The MoU essentially calls for retaining public sector jobs in return for a three per cent cap on the wage bill and the promise that the Government will achieve, over the next two years, very ambitious macro-economic targets, which have been eluding them for a long time. Among the other components of the MoU is the temporary cessation of reclassification exercises, except for special cases, as well as the establishment of a Monitoring Committee to, inter alia, review and approve these special cases. At a time when Government and businesses worldwide are getting more efficient, we are add-ing another layer of bureaucracy in the form of a monitoring
committee.
Questions have been asked about sanctions for non-performance under the MoU, but none of the signatories have been able to explain what these sanctions are and how they will be applied. According to Senator Dwight Nelson, the intensity of the agreement is demonstrated by the fact that the Attorney- General affixed his signature to the MoU. My limited understanding of the law tells me that a non-binding agreement is made no more binding when an Attorney-General affixes a
signature.
Even before the ink was dry on the MoU documents, trade unions representing workers at the National Water Commission were instructing workers to strike rather than accept an increase in keeping with the terms of the MoU. Not to be outdone, the Governor of the Bank of Jamaica on the very same day declared that the country will be very hard-pressed to meet the inflation target for next year as outlined in the MoU and agreed to by the Minister of Finance.
WORKFORCE
Let us examine the effect of maintaining the size of the public sector workforce and the wage freeze as outlined in the MoU and their impact on the national economy. According to the 2002 JEF Salary and Benefits Survey, private sector salaries kept pace with inflation between 1996 and 2002, however most of these companies have achieved increased performance due to restructuring, re-engineering and the implementation of performance-related pay. The companies have then allocated portions of savings realised from performance increases to pay higher wages to those employees remaining in the respective organisations. Examples of such companies are Red Stripe, Dairy Industries and Grace Food Processing (Canning) Limited. Some of the very trade unionists who signed the MoU with Government have partnered with these and other private sector companies in their restructuring exercises. At no time did the trade unionists ask that all their members' jobs be saved. So why do it with the public sector at this time?
Wage rates in central Government and its agencies have also increased ahead of inflation over the period. However, unlike the private sector, the public sector has not, for the most part, increased the value added per employee. This is indicated by the increase in the wage bill moving from $15.8 billion (6.75 per cent GDP) in 1996 to over $50 billion ( over 10 per cent of GDP) in 2003, contributing substantially to the huge fiscal deficit both directly and indirectly. Indirectly, because the public sector wage bill has an effect on the interest costs and these are the two major components of Government's expenditure.
The public sector wage bill drives the Government's voracious appetite for cash, hence the need to pay a high price (interest rate) to secure the cash, hence the high interest costs.
