Re-Thinking the Economic Growth Strategy Behind the IMF Agreement and Public Sector Wages

Social Progress Index 2014 done by Michael Porter shows Jamaica, despite having a PPP GDP per capita of US$7083, with a creditable index of 43 out of 132 countries examined.

 Public sector trade unions, represented by the umbrella body, the Jamaica Confederation of Trade Unions (JCTU) and the Government, through the Ministry of Finance and the Public Service, have not formally commenced wage negotiations on behalf of public sector workers although we are six months into the 2017/18 wage cycle.  And there are early indications from the responses by the Government to the teachers and the police that the public sector wage bill can only accommodate a six percent adjustment over a two year period.

Under the IMF agreement public sector wage bill as a percentage of GDP should be brought down from its present 9.6 percent to 9 percent by fiscal year 2018/19, that is next April, just about six months away.  More than that, the 9 percent wage bill has found its way into law, under the Fiscal Responsibility Framework, which effectively ties the hands of both parties and removes any notion that negotiations will be based on the principle of free collective bargaining.

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