With inflation continually rising, calls for wage increases in the public sector are expected, thus placing the Government of Jamaica under additional pressure during this time of COVID.

‘Last month, the Ministry of Finance signed off on a one-year agreement which would see about half of public sector employees get a four per cent increase in wages and allowances.

Inflation is currently running at 8.2 per cent year-on-year and has risen by one per cent over the last month.

The Ministry of Finance has given the undertaking to participate in a compensation review in April 2022.

The Government has the unenviable task of balancing lives and livelihoods during a global pandemic which has stifled the economy. With an uptick of inflation on a monthly basis, it will be besieged with calls to increase wages already cognisant that there is a wide disparity between private and public sector wages.

Last year the public sector wage bill was J$241 million more than the J$138.5 billion (April-November) the Government had planned to spend.

In 2017, the Transformation Implementation Unit, established to reform the civil service, drew attention to its complex compensational structure. What usually pertains is wage bill increases that have been more than programmed in the budget with the Government bargaining with multiple entities at the same time.

Minister of Finance Dr Nigel Clarke sought to allay fears, striking a conciliatory tone on the matter of public sector wages, saying: “We intend to work with our partners in a consultative manner to among other things, overhaul the compensation system resulting in a simpler compensation structure applied across the public sector in a consistent manner, reform the allowance structure in the public sector and develop a modern compensation policy and philosophy that guides the development and management of compensation in the public sector and serves to properly compensate employees, encourage performance and moderate the rate of growth of our total wage bill.”

The Government is making efforts to be equitable but finds itself having to attend to unplanned for pressing concerns due to COVID. Curbing the virus is its top priority while at the same time ensuring that the economy can register growth.

While the Government asks for forbearance, civil servants have to contend with galloping inflation which erodes wages.

The way the IMF sees it, giving in to wage demands will see the Government hard pressed to meet its other expenditure obligations. It has given a clear indication that Jamaica needs a smaller civil service and that resources can then be earmarked for other areas of the public sector.

In its Article IV report on Jamaica, released yesterday (November 17), the IMF declared: “Rises in the wage bill risk crowding out other expenditure. The new public sector compensation system that will come into effect in FY 2022-23 will make the wage structure more transparent, standardised, and equitable, and reduce the large differences in pay with the private sector. But it will also further add to the wage bill, which is already one of the highest in the region, reducing the room for other expenditure.

“A reassessment of the various roles and responsibilities of government, as well as increasing efficiency in the provision of public services, that would facilitate a reduction in the size of the public workforce, could help offset the costs of the new wage structure.”