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Tuesday, 21 April 2009
Cut public sector yes, but not now
Topic: Government Policies
The Editor, Sir:

With regard to your editorial titled 'Beware of the treadmill, Mr Golding' in The Sunday Gleaner of April 19, I agree that the MOU between the former government and the public-sector unions for wage freezes and salary caps was, as you put it, "mere short-term palliatives". However, I disagree that freezing wages at this time, instead of cutting 22,000 jobs, is a palliative. It is short-term but a prudent move.

The current worldwide recession presents corporations with poor economic prospects and over-extended markets. Particularly in the latter, the corporate strategy of choice is retrenchment with its associated variations of rationalisation, downsizing and redundancies. Government cannot follow suit. Its role, as stated by Dennis Morrison in the article 'A crisis requiring compromise', is "to keep economic activity going as households and businesses are forced to cut back their purchases".

Discretionary income

Effecting wide-scale redundancies at this time would remove discretionary income of those affected from the economy leading to further reduction in the purchasing of consumer goods and services, such as newspapers.

Dennis Morrison also stated that "cutting the public-sector wage bill is no easy task. Teachers, nurses, the security forces and other essential workers make up the vast majority of the establishment" and there are instances of under-staffing in critical areas. So, this would not be a short-term exercise, as your editorial seems to suggest. Although gross wages and salaries of the public-sector account to over 46 per cent of the Budget, their net wages and salaries are less so; and, this is further reduced by GCT, gas cess, property taxes, etc.

I am, however, in agreement with my brother Robert Wynter that the Government needs to cut significantly the 'public-sector employment to deal with the stifling fiscal pressures' it faces. But, not now: when economic prospects are improving and affected persons will not become burdens to the state, their wider families, and exasperate an already bad state of criminality. I close with a quote from the book of Ecclesiastes: To everything there is a season, a time for every purpose under heaven. The time for cutting the public-sector wage bill is not now.

I am, etc.,


Managing Partner

PAUL HAY Capital Projects

Posted by phcjam at 7:49 PM EDT

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