One might understand arguments proffered by governments of the past that they have not had the means to pay a living wage to public sector workers.
After all, Guyana’s budget finances had been for decades in a parlous state with large deficits. Much of this can be attributed to being a post-colonial economy dependent on commodity production, and the mismanagement of the economy.
Also a big contributor has been the non-payment of taxes by the self employed and corporations along with lacklustre enforcement by various administrations to collect what is the obligation of every citizen who has an income and uses public services be they roads, hospitals and schools. A 2015 Global Financial Integrity Report showed that for the years 2008 to 2012 illicit financial flows, primarily in the form of under-invoicing of imports and other tax evasion practices, represented 511.2% of the country’s spending on education and 264% of the health sector budget.
That so many shirk this duty is an indication of how far we have strayed from a society based on common welfare to one that is little more than a hustler’s paradise.
The implementation of Value Added Tax in 2007 at a burdensome rate of 16% solved much of the budget deficit problem as revenues surged, despite then President Jagdeo’s promise VAT would be “revenue neutral”.
However it did not solve the enforcement failures by the GRA. Instead VAT simply turned businesses into agents of the state to collect taxes now paid by consumers. Given that poor people spend a larger amount of their income than the middle class, it is seen as a regressive tax. Fur-thermore some businesses, although registered to collect VAT, have not passed it on to the GRA and thus have enjoyed windfalls of 14% on top of individual sales. That is a crime but ask yourself when was the last time a case has come before the court?
A large portion of the extra revenues was spent not on improving the wages of public servants but on infrastructure. It supercharged corruption involving favoured contractors who in turn financed the politicians. The wastage has been and continues to be astonishing. At the same time many public sector workers have seen their real wages decline as they sink into the category of the working poor. For many the option was, and still is, to migrate for better wages overseas something the President has acknowledged when it comes to nurses for example. Apparently he cannot go further and acknowledge that it is a direct result of uncompetitive salaries in the health sector.
As for the migration of such skills, it is perhaps not useful to compare salaries for countries such as the United Kingdom or the United States although many Guyanese have gone there. A PAHO study noted that “salaries for registered nurses at Washington area hospitals range from about US$38,000 for new graduates to US$62,000 for 15-year veterans.” Early career teachers in the UK are receiving over 30,000 pounds sterling or G$7.5M.
It is more informative to look at the salaries of counterparts in the Caribbean where costs of living are similar. With the supposed free movement of labour under Article 46 of the Revised Treaty of Chaguaramas one might expect some levelling out of salaries between countries.
It is not so. A graduate teacher in Barbados for example gets between B$47,198 to B$66,192, that is the equivalent of G$4.9M to G$6.9M; a staff nurse between B$38,576 to B$53,431 – or $3.5M to $5M.
In Trinidad, according to a 2020 Guardian article, the basic monthly salary of a nurse in the South West Regional Health Authority is listed at “TT$6,117, while the incentive allowance is TT$1,500.” That is equivalent to G$236,000. An average teacher’s salary in Trinidad appears to be over 10,000 TT per month or G$300,000.
Clearly Guyanese workers are nowhere near these levels.
Now many on the government side may argue that it will take some time for Guyana to catch up. But the question should be what exactly is the impediment to this so-called catching up now that the government has the wherewithal to compensate its employees properly?
Instead the President, while shirking his constitutional duty to engage unions in collective bargaining, throws out all kinds of proposals such as duty free cars and cheap mortgages for teachers. Of course the latter is one way to keep them tied to the country. Then hilariously he called a press conference to announce that he was “reviewing the capacity at further advancing liquidity in your pockets…the tax threshold. This is another issue that I would say is on the front burner of consideration…We’re analysing the numbers and ensuring that whatever we come up with is in keeping with the sustainability of our economy because that is what is important.”
It’s farcical and we can see that the government is setting up for its familiar imposition of a wage increase on public sector workers weeks before Christmas. We have seen it all before.
The conclusion seems somewhat dismal: the PPP/C administration is no longer a party fighting for the interests of the working class. Instead it has climbed into bed with both big business and the petty bourgeoisie. No one can deny this. Finance Minister Ashni Singh was as explicit as he was obsequious at a Private Sector Commission dinner when he declared, “We see the government and private sector not as sitting on opposite sides of the table but on the same side because our objectives aligned.”
This sweaty symbiotic relationship could be seen most recently with the organisation’s failure to question how the country is now on the verge of running out of electricity.
Talk about Silence of the Lambs. Industries will now pay a 38% increase in tariffs during peak hours. So much for halving energy bills.
President Ali is himself on the record complaining about the cost of labour: at one press conference when talking about day rates for truck drivers he mentioned that it is “even worse” for machine operators.
The final argument against wage increases is that they result in sharp rises in prices. This is a fallacy both here and abroad. A recent Office for National Statistics (ONS) report indicated that rising salaries have not been contributing to UK inflation any more than usual. And there is no empirical evidence to prove it has had that effect in Guyana.
Following the public servants strike of 1998 the Armstrong Commission awarded increases of 31.6% for 1999 and a 26.7% increase for 2000. Inflation in the subsequent years was 5.9% in 2000, 6% in 2001 and 4.7% in 2002. Negligible and more to do with a declining currency. The Bharrat Jagdeo-imposed 16% VAT caused the biggest spike in inflation of 12.3% in 2007.
There is no way around it. The government can construct all the hospitals and schools it wants. Only through offering competitive wages will the country retain and attract the skills needed to build the world class health and education sectors all Guyanese deserve.
