TWO trade unionists on opposing ends are urging private sector employers to pay their workers what they can afford despite the Bank of Jamaica (BoJ) Governor Richard Byles’ warning that large salary increases could impact negatively on inflation.
Both Government Senator Kavan Gayle and Opposition Senator Lambert Brown believe that workers deserve reasonable salary increases in line with the country’s current market situation.
Gayle, who is also president of the Bustamante Industrial Trade Union (BITU) told the Jamaica Observer on Wednesday that while he understands the role of the BoJ in seeking to curtail inflation, he is disappointed with the governor’s suggestion encouraging employers not to pay high increases.
“I am saying why? First of all, let’s agree that employers should not yield to the temptation that has been professed by the governor of BoJ because employees have been working diligently, workers have been committed and they would be achieving growth and revenue generation with organisations that would have allowed for progressive profitability and there should be a return on that investment,” he said.
He argued that suggesting to employers to curtail themselves in that regard would be seeking to “create an albatross around the necks of workers at a time when they would have made sacrifices, especially during a period of pandemic, when they could not have gotten increases”.
Gayle notes, however, that he understands there are some employers that may not have the ability to pay, but he is also concerned that there are some employers who will abuse the call made by the governor, by simply saying, “the governor of the BoJ in warning against this.” He noted as well that in instances in which these employees don’t have a union to represent them, they are exposed to the will of a recommendation coming from the governor without a thorough explanation to support it.
The trade unionist further argued that while Byles has advised against substantial increases, he has not determined what an appropriate level ought to be or recommended a limit that would not create havoc in relation to inflation.
Meanwhile, Brown, a veteran trade unionist, is of the view that the BoJ governor should allow the market to determine wage levels.
“If the money is not paid in wages, where does it go? It seems to me that such money goes to profit rather than reduced prices. I think the governor got it wrong, especially in a low-wage environment as Jamaica. Workers need increased pay to meet the high cost of living and surviving in Jamaica,” he argued.
He also noted that it would be useful if the Governor would publish the levels of salary granted by the BoJ to the management cadre at the central bank.
In a press release on Wednesday afternoon, the BoJ sought to clarify statements made at press conferences in May and August on the potential impact of wage increase on inflation.
It reiterated that large future wage adjustments in the context of the tight domestic labour market “constitute one of the potential headwinds that could result in higher-than-projected inflation in the future”.
The release further stated that if large wage increases translate into increased prices, there will be a cost-push effect on inflation, but if wage increases are accompanied by commensurate increases in productivity, such wage increases will not impact the inflation rate.
