As the issue of the economy remains on the front-burner, President of the Georgetown Chamber of Commerce and Industry, Vishnu Doerga, said yesterday that the 10 per cent wages increase offered to the public servants of Guyana will serve to boost the economy.
Doerga made this pronouncement at the chamber’s monthly press conference. According to the President, the increase will have a multiplier effect. He explained that the benefit of wage increases is that the money is spent back into the economy.
He said that the increases will have a higher multiplier effect than gold. “With the 10 per cent, the fortunate thing about that kind of spending is that it’s similar to rice, when a farmer gets paid, everybody in the village who they would have taken credit from, they have to get paid and then those people spend that money again.”
“If a person receives a dollar and he puts aside 50 cents and they spend the other 50 cents at the store that becomes a multiplier of 1.5, if that person in the store puts aside half of that and spends 25 cents that same one dollar becomes spent 1.75 times.”
Doerga said that this type of spending is better for the economy than what happens in the case of gold whereby the primary beneficiaries of the gold industry use their money to purchase assets which cannot be spent.
“That’s the nice thing with these wage increases is that they get spent back in the economy and they have a higher multiplier effect than gold for example.”
However, the Chamber president went further to say that from a private sector perspective he does not believe that an increase would have been given based on the position the country is in.
He said, “If we were to look at Guyana as a private sector entity, there will be no way there would be a salary increase given that we’re two per cent ahead of our GDP growth. How can we pay 10 per cent if we’re two per cent ahead?”
Doerga said that public servants have come to expect increases. “I’m happy I’m not the finance minister because there wouldn’t have been an increase because the two per cent came from gold which is not circulating in the economy.”
Similar sentiments were shared by the Minister of Business, Dominic Gaskin, when he agreed that the increase will enhance the spending power of the public servants.
According to Gaskin, whether the increase is sufficient is a separate issue. He said ascertaining what is sufficient is relative.
He said, “Profits for businesses are never sufficient. That is the nature of business; businesses always want greater profits, and I assume that human nature is no different, we want bigger and bigger salaries every year.”
On the issue of whether the increases would create liveable wages for the workers, the minister said that it all depends on how persons wish to live. However, he maintained that the increase will improve the spending power of public servants since it is 10 per cent more of their salary to spend.
On several occasions the Guyana Public Service Union had made its discontent known about the increase offered whereas 10 per cent is given to the lowest paid workers and one per cent to the lowest paid.
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