With salary negotiations for public sector workers expected this year, Central Bank Governor Dr Kevin Greenidge says any increase in pay for them should be linked to economic growth.
He cautioned yesterday that higher wages and salaries for Government workers that were at a rate exceeding productivity could negatively impact inflation.
Greenidge was speaking at the Courtney Blackman Grande Salle where he presented the Central Bank’s review of the economy’s performance in 2024.
The report showed that Government spent $852.4 million on wages and salaries in the 2023/2024 fiscal year. It spent $652.7 million on this category of current expenditure in the first nine months of the current fiscal year ended December 31, compared with $641.5 million in the same period last year.
Greenidge said he preferred to give Government any advice the Central Bank had in relation to salary negotiations privately, but briefly outlined the thinking he believed a public sector pay hike should follow.
“This year is a new negotiation, I believe. I think that this is for Government to assess its ability to be able to provide what it can. I really wouldn’t like to opine upon it here, because that probably would be unfair to both sides. I prefer to give Government our advice in a more private setting,” he said.
“But the truth be told, we have to be able to link any increases to economic growth, and not just any amount [but]
economic growth beyond a certain amount. Because when increases are higher than productivity, as determined by the pace of economic growth, then you would get inflationary pressures.”
In March 2023 the Ministry of the Public Service announced that Government’s negotiating team and trade unions reached agreement in the public sector wages and salaries negotiations for the period 2022 to 2025.
The last wages and salaries negotiations, which started on October 18, 2022, and involved four rounds of talks, concluded nearly five months later with an agreement for a one-off, tax-free $1 500 lump sum payment for 2022/2023 for all people who at March 31, 2023 worked in the Public Service and in state-owned enterprises (SOEs) that were dependent on central Government for recurring financial support.
This was in addition to cumulative salary increases of three per cent in 2023/2024 and three per cent in 2024/2025 across the board for all those working in the public service and at specific SOEs.
There were also cumulative increases in allowances of ten per cent for 2022/2023, three per cent for 2023/2024 and three per cent for 2024/2025 for all public service workers receiving allowances and employees at some SOEs.
(SC)
