Co-chair of the Economic Programme Oversight Committee Keith Duncan told journalists that it is possible for the Government to give public sector workers a 16 per cent increase over the next four years without affecting Jamaica’s agreement with the IMF. (Photo: Collin Reid)
Economic Programme Oversight Committee Co-Chairman Keith Duncan on Friday reasoned that the government must be strategic in its proposed 16 per cent wage increase to public sector workers to avoid eroding targets set by the International Monetary Fund.
Duncan, in highlighting that the public sector wage negotiations with government remain a risk for the Economic Programme, said he hopes that the agreement will be concluded with all stakeholders in keeping with Jamaica’s legislated nine per cent wage-to-GDP fiscal rule for 2018/19.
The government had previously offered a six per cent increase over two years, with three per cent in year one and another three per cent in year two. However, the offer was rejected. The government now wants to extend the contract period from the usual two to four years to facilitate the 16 per cent increase.
“It depends on how they break out that 16 per cent, since it is over a four-year period how much of it do you pay out this year up to year four. That will drive that nine per cent wage-to-GDP 2018/19 target. So therefore you may have heard different formulas along the way; pay six per cent now, pay four per cent in three, all accumulating to 16 per cent.
“Sixteen per cent over four years is a reasonable adjustment and we are hoping that the public sector negotiations will take us in that direction for us to be able to meet the fiscal target. It is possible for 16 per cent over four years — just depends on how you spread it,” he continued.
The current offer was presented in two options, the first option being a six per cent increase in year one, no increase in the second year, five per cent in year three and another five per cent increase in year four. The second option is for a five per cent increase in year one, two per cent in year two, four per cent increase in year three and five per cent in year four.
The increase will be applied to base salary, meal allowance, emergency duty and incentive in lieu of emergency duty. During the four years of the contract, no new allowances will be introduced.
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