A WAGE FREEZE in the public service would go a long way towards restoring fiscal equilibrium but it could also cause inefficiency.
This assessment came from Barbados Economics Society president Dr Winston Moore, who told BARBADOS BUSINESS AUTHORITY that reductions in public sector wages or wage freezes could discourage workers and therefore lead to apathy.
He said a motivated and professional public service should be the goal of any administration but achieving this depended on the availability of resources.
“In order to attract and keep highly motivated public servants, governments must be willing to offer adequate compensation for their services,” the economics lecturer at the University of the West Indies, Cave Hill Campus, said.
He noted that the public service played a key role in any service-based economy and public goods like education, health care and security are important determinants of business growth and development.
Still, the former Central Bank economist noted that Government’s wage and salary bill is “relatively large”, amounting to about 11 per cent of gross domestic product – two percentage points higher than the world average.
Meanwhile, Barbados Chamber of Commerce and Industry president Andy Armstrong said it was difficult to say “across the board” how the private sector would approach the issue of salary increases this year.
“Many companies have seen significant declines in profit and some are making losses. Negotiations with the labour unions will take all of that into account.
“A lot of companies are still in difficult positions and will find it hard to increase salaries,” he said.
