I READ a missive from EB John, captioned: “Public servants 8 per cent is a subversion of equality” and the first idea which came to mind was: what was the writer’s reaction to the paltry increases given to these category of workers when the coalition was in government, in the midst of rising costs, punitive increases in taxes, thousands of job losses, et cetera?
Mr John must realise that the increases given to public servants were taken back by the huge increases in tax. I have not read anywhere that he condemned the coalition’s unilateral and meagre wages and salary “hikes” thrown at the public servants after being promised “significant” wages and salaries in 2015, whilst rewarding themselves with 50-100 per cent tax-free increases.
According to the Human Resources Consultant: “This announcement [eight per cent increase] is nothing to be excited about. It is merely another “grant” for Christmas.”
This is typical of a person who feels that workers must be given humongous salary increases, in spite of what negative effects it will have on the economy. However, it is a known fact that the human resource departments of business entities would normally oppose unsustainable salary increases, since they are acutely aware of the financial ability or inability of the company to offer such increases.
Any economist worth his salt will tell you basically that if wages and salaries are increased too much, this will severely impact the labour costs that employers must pay. This, in turn, could trigger price inflation, hurt exports and reduce the level of employment.
Should wages and salaries be increased without analysing the economic reality, then it is high probability that the so-called “wage-inflation spiral” will lead to higher price inflation which in turn makes workers demand higher wages.
This vicious circle will continue if there is no “wages restraint,” and the real dollar value will crash. The well-being of the economy is in the hands of the government and they must be trusted to implement their macro-economic policies, as the beneficial trends over the last two years bore testimony that these policies are bearing fruit.
It would be worthwhile for Mr John to peruse the statement made by President Ali in which he outlined the various cash benefits received by all Guyanese: seven per cent increase across the board in 2021; the reintroduction of the one-month, tax-free bonus for the disciplined services; the restoration of the cash grants and increase to $30,000 per child; removal of the punitive taxes that were imposed by APNU+AFC on electricity, water, medical and education supplies; basic household necessities, and basic construction materials; removal of the excise tax on fuel, capping the freight charges used in calculating import taxes; providing fertiliser and other support to farmers to boost food production, and direct cash transfers to especially vulnerable communities to tackle challenges of rising global prices.
All of these measures and many more will ensure that the general cost of living remains stable, whilst the standard of living improves by ensuring that everyone enjoys a better life. The eight per cent wages and salary increases must never be looked at in isolation and this is exactly what Mr John had done.