SENIOR trade unionist Vincent Morrison is asserting that salary cuts, both in the private and public sector, is not the solution for economic recovery post-COVID-19.
He was joined in a similar expression of views by Helene Davis Whyte, president of the Jamaica Confederation of Trade Unions (JCTU).
In an interview with the Jamaica Observer regarding whether or not some members of the civil service, led by Parliamentarians, should also be feeling the pinch of wage cuts, Morrison said, “I don’t think anybody should be taking salary cuts in Jamaica at this time.”
“My union will not be agreeing to any wage cut whatsoever, whether in the public sector or within the private sector. We will not be doing that,” Morrison said.
The senior trade unionist added that a closer examination of salaries in Jamaica will indicate that wage cuts have a counter effect on economic growth.
“Certainly, when I look at the salaries of a permanent secretary right down, there is no room for salary cuts in the public sector. The wages were frozen in the public sector for a long period. In fact, if you go back to the 1970s coming right back with wage guidelines and wage freeze, public sector wages and wages in general in Jamaica have not moved significantly. It is one of the reasons for our low economic growth in Jamaica, [and] really shouldn’t be. The workers and the population in Jamaica don’t have that level of disposable income to spend to purchase goods and service, which is what is needed to ignite the spurt of serious economic growth. We are just coming out of a four-year wage agreement that in the first instance didn’t make sense. Going forward, I don’t think wage cuts is what is required or is the proper instrument to spur economic growth. If we are going into an economic recession, I don’t think we should be looking at wage cuts. All that is going to happen is that it is going to compound the situation,” Morrison suggested. “Cutting salaries at this time is one of those bad decisions that will create more problems for the economy. It will cause the economy to linger, it won’t spur the growth that is needed — and my position is we shouldn’t be thinking this.”
A better alternative, according to Morrison, is to look to the further development of the manufacturing and agriculture sectors.
“Our economy is so much an open economy – we rely 100 per cent on a lot of external factors. I am very impressed, for example, that the manufacturing sector has stood up in spite of the situation. Most of the companies that represent in the sector stood up very well. However, the manufacturers must get the support, the 110 per cent support that is needed for them to expand, for us to stop the importation and to see how items that we are importing into the economy can be manufactured in Jamaica to create more employment. The key issue here is going to be the issue of foreign exchange, and the Government must, right now, treat the manufacturing sector when it comes to foreign exchange allocation as an emergency sector. Just as how you want to get the mask and all the imported things to deal with the health sector to control COVID-19, you will have to put the manufacturing sector in that same category,” Morrison said.
Regarding the agriculture sector, Morrison added, “It is an opportunity for agriculture, a big opportunity for agriculture – not only domestic agriculture, but export agriculture. I will again want to believe that the proper incentives put in place for these two sectors – manufacturing and agriculture at this time – if the incentives are right and they get the support from the Government, I believe in the short to medium term we could see a tremendous strengthening of the economy and the revival of high economic activities across the country.”
For Davis Whyte, she believes that if pay cuts can be avoided, then they should be.
“At the end of the day each of us has a role to play in the economy and, to the extent that you have pay cuts, it means you are going to have spin-off effects in the wider economy. What you will have are situations where, as a result of a pay cut in one area, you end up with problems in another because persons are not able to purchase goods and services in the way they would have before. It’s almost a domino effect,” Davis Whyte said.
Like Morrison, Davis Whyte said the salaries of public sector workers are woefully low and subsequently, pay cuts would not be viable.
“In the midst of a pandemic, to cut their wages would certainly not be sending the right signal and would not be encouraging them to keep safe and minimise risk in order to be able to deliver particular services,” Davis Whyte said, noting that the bulk of the public sector workers are those who are needed and working in the pandemic.
Additionally, Davis Whyte said discussions have been had with the minister of finance regarding public sector wages and the way forward during and post-COVID-19.
“He has indicated that the Government does not find itself in that problem as it relates to public sector wages. However, he did indicate that if it got any worse he would likely have to be talking with us as unions again,” the JCTU president said.
Besides, Davis Whyte said pay cuts is not the only option available when there are issues with cash flow.
“We have had situations where workers, instead of taking a pay cut, they delay payments of particular benefits that are owed to them. They collect it at a later date when the company would be in a better position to pay. However, their basic pay is maintained. All sorts of options are available. Some companies may be able to deal with things from their reserves. Look at the options based on individual situations. Pay cuts and layoffs are the last resort,” Davis Whyte said.
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