Accepting the Government’s 4 per cent offer for some public servants is not an option, as they say the increasing inflation and economic climate will erode workers’ purchasing power.
In 2022, Finance Minister Colm Imbert offered 4 per cent wage settlement to the public sector trade unions for the period 2014-2019. Many of the public servants did not accept the offer, showing their rejection of it through protest, saying they deserved between 8 to 10 per cent.
The Amalgamated Workers’ Union was the first union to accept the Chief Personnel Officer’s (CPO’s) 4 per cent salary offer in 2022, and then other public sector unions followed.
The unions that have accepted are the Police Social and Welfare Association (PSWA), Prison Officer Association, Trinidad and Tobago Unified Teachers’ Association (TTUTA) and Fire Service Association.
The Public Services Association (PSA), National Union of Government and Federated Workers (NUGFW), and Contractors and General Workers Trade Union (CGWTU) stood their ground and are yet to accept the four per cent offer.|
The PSA which represents over 18,000 public servants has since taken the matter to court.
Responding to the union’s request for an increase in September 2022, Imbert stressed the additional annual recurrent cost of the Government’s offer was approximately $500 million, and if it was extended to the wider state sector, the extra cost would almost double to approximately $1 billion per year.
Fast track to 2024, with days to go before the 2025 budget is due to be presented on September 30, the Sunday Business Guardian spoke to five public servants on whether the offer should be accepted. Their names have been changed to protect their identity because public servants are not allowed to speak to the media.
*Michael Thomas from the Judiciary said the decision to accept the 4 per cent wage offer depends on a variety of factors, including the state of the economy, inflation, and the needs of the workers.
“Don’t get me wrong, although 4 per cent may seem reasonable in some contexts, it is crucial to evaluate whether this percentage adequately addresses the rising cost of living that workers and their families have faced over the past years.
“For instance, if inflation and other costs have risen at a higher rate than the proposed wage increase, the offer may not sufficiently protect workers’ purchasing power. In this context, the PSA should consider whether this offer aligns with the needs of its members and if the offer reflects an equitable distribution of government resources. If the offer is below inflation, workers may see a decline in their real income,” Thomas explained.
He noted that as a public servant, not having a wage increase in nine years has had a significant negative impact on his standard of living as well as those of his other friends and family.
Over that time, the costs of essential goods and services such as food, housing, healthcare and transportation have increased, Thomas said, reducing the purchasing power of his salary. Without periodic adjustments to account for inflation, workers essentially earn less in real terms each year, even if their nominal wage stays the same.
“To determine fairness, several factors should be considered: Firstly, a wage increase should at least match or exceed the inflation rate to ensure that workers’ purchasing power does not erode over time. Secondly, let us take into consideration the term “economic growth.” For example, if the economy is growing, the government may have the ability to offer a higher wage increase. However, if the economy is stagnant or contracting, there might be limitations,” Thomas added.
• Sarah Peterson from the Agricultural Development Bank categorically said PSA should not accept the 4 per cent offer and that a fair offer is ten per cent.
Asked about not receiving a wage increase in nine years, Peterson said this has impacted her standard of living by setting her back years financially. Since the last wage hike for public servants in 2015, she has not been able to purchase a house, a car, and even go on a foreign vacation.
• Paul Skinner of the Ministry of Trade and Industry believes that the representing union should accept the four per cent offer.
Skinner stressed that not having a wage increase has severely impacted on the quality of his life, seeing that a lot has had to be adjusted to afford a decent standard of living. It has led to a shift in priorities in terms of ability to afford basic necessities.
“The two hardest areas have been the cost of food and the cost of transportation. It has been a struggle to afford basic food items, compared to 2015, some items have quadrupled in price. Also, a tank of gas feels like it doesn’t take you as far as the price being paid now, so simple outings with the family have to be well planned in order to afford to move around, without incurring additional debt.
• Matthew Dass from the Ministry of Agriculture made it clear that he wanted the PSA to take the issue as far as they can, as the government has wiggle room but was focusing on other development that should have been put on hold. Dass believes a reasonable offer is between 6 and 8 per cent.
• Petal Thompson from the National Security Ministry also expressed similar sentiments on not wanting the union to accept the four per cent and said it’s only fair the union ensures workers are treated fairly.
Thompson identified that between 8 to 10 per cent is reasonable because anything less would be truly insignificant, akin to a drop in the bucket.
In quantifying what he could have afforded in 2015 compared to now, he said “For one, I cannot afford another child. I cannot even afford to go by the doctor and get a monthly birth control injection, so I joined the Family Planning Association. I can no longer buy new textbooks for my daughter, because back-to-school costs have skyrocketed. I cannot afford a car, because the cost of cars has doubled in some instances.”
The Sunday Business Guardian reached out to PSA president Leroy Baptiste, who said he is not budging from not accepting the four per cent offer.
“The Government is not even consolidating COLA (cost of living allowance) so that is not a fair offer. My position remains. The matter is before the courts and we await the ruling on the matter,” Baptiste emphasised.
Meanwhile, economist Dr Ronald Ramkissoon said the rate of inflation has been in double digits, over the last six or seven years and while the other unions who accepted the four per cent had some kind of mitigation, the other unions membership is in a worse off position.
“We have been a petroleum-based economy that operates in a way when there are some excellent times and then some terrible times. Therefore, any minister of finance finds themselves at times in boom times and then at times in the doldrums, if you like. Managing that is a challenge. What has been the tendency over successive years and governments is in fact to meet the shortfall by borrowing and or drawing on Heritage and Stabilisation Fund (HSF) or savings,” Ramkissoon added.