Kaieteur News – Public servants desire an increase in wages. Who does not? But I am sure if a survey was conducted today and if persons spoke the truth, the whole truth and nothing but the truth, it will be revealed that in as much as public servants desire an increase in their salaries, they prefer it in the form of the usual “back pay” which they receive in December.
Public servants looking forward to the retroactive payment of wages which is usually paid in December in time for the Christmas holidays. The back pay tidies public servants over the holidays.
But it leaves their unions fuming, the reason being that these increases are imposed by the government and are not subject to collective bargaining. The government, it is believed, is of the view that the GPSU has a political agenda and therefore cannot be trusted to be reasonable in negotiations.
The annual wage increases offered by government to public servants usually compensates for inflation. But those inflation numbers are themselves subject to controversy since there is a view that they do not match the realities in the market place.
At present, there is an increase in prices of consumer items, including and especially food. These increases are hurting public servants. But this is a worldwide phenomenon which is taking place and Guyana actually has done much better in cushioning prices than in other parts of the world.
The situation could have been worse. The government is allowing importers to declare pre-pandemic freight rates for the calculation of taxes in the hope that this would reduce the cost of imported goods to consumers. But it has not put in place any mechanism to ensure that this tax concession is being passed on to consumers. The government has also given a cost of living grant to residents living in riverine and hinterland communities. The price of gasoline has risen to its highest level ever and would be much higher had the government not removed the excise taxes. One former Minister has already complained about the effects of government policies on tax collection. The removal of the excise taxes on petrol will put a serious dent in tax collection and it is questionable whether the government will be able to generate tax revenues to pay a substantial increase in wages to public servants.
In any event, it makes no sense the government pumping excess monies into the economy as disposable income. Instead of helping public servants deal with the rising cost of living, it will have the opposite effect. It will cause prices to rise even more because the increase in money will be greater than the increase in production of goods and this will fuel an increase in prices.
All workers need relief. But this relief has to be in a manner which is affordable and which will not increase inflation.
This column proposed a solution months ago. But the government is not the type of administration which likes to take advice unless it comes from the international financial institutions or from their friends in the private sector. Essentially, the government is a bourgeois government masquerading as one which has emerged from a working class party.
The solution proposed would be to pay a cost of living allowance of $5,000 per month to every public servant. This would amount to a seven percent increase for minimum wage earners and it would suffice to cover the extra expenses for food at least. Prices have increased but not to the extent which some persons are claiming and if people spend prudently they will be able to manage better.
A cost of living allowance would be a temporary measure. It should be paid until at least the end of the year. And the private sector should be required to do the same. A $5,000 cost of living allowances is not unaffordable.
The world is going through a crisis. There is a war taking place in Eastern Europe. The Americans and Europeans have imposed sanctions on Russia but it is their own people and we who are feeling the pain of the rise in the price of grain, fertilisers and petrol. Biden has blamed the oligopoly which controls the world’s shipping for jacking up freight costs, resulting in higher prices for importing goods.
However, Guyanese are resourceful people. The older generation knows how to cut ends to deal with rising prices and shortages. The older folks know how to conserve and be frugal during difficult times. Nevertheless, I am not so sure about the younger generation, at least judging from the long lines at the fast food restaurants.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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