Senior Reporter
dareece.polo@guardian.co.tt
Public Services Association (PSA) members are being urged to accept the Government’s final wage offer, as economists weigh the country’s severe financial constraints against the declining value of money owed to workers after eight years of negotiations.
Chief Personnel Officer Dr Daryl Dindial has maintained the Government’s offer of 40 per cent in cash and 60 per cent in non-cash benefits for outstanding wage negotiations covering 2014 to 2019. The State has said the proposal is intended to provide a responsible settlement while protecting public-sector jobs.
But economist Dr Indera Sagewan said the country’s financial position means the PSA must consider more than the immediate interests of its members.
“If this union is part of the Government, then it needs to work with the Government. And it needs to understand that its role is a little bit more than simply looking after the best interest of its membership. Being part of Government means it has a responsibility now to look after the best interest of the country.”
Sagewan said the Government is dealing with a high level of indebtedness and argued that injecting a large amount of cash into the economy at once could create additional inflationary pressure.
She said spreading the cash component over time would give the economy greater room to absorb the payments, particularly if economic growth strengthens in the coming years.
Sagewan was particularly critical of the prospect of the union rejecting the offer at a time when she expects the Government to face significant fiscal pressure.
“It is absolutely that bad. Fiscal 2027 is not going to be a walk in the park.”
She said the Government would have to manage the economy carefully, month by month, with stronger energy-sector prospects providing more meaningful fiscal relief only over the medium to long term.
For economist Dr Jamelia Harris, however, the issue is not only what the Government can afford to pay now, but what the eventual payment will be worth when workers receive it.
“If we even break down what is being offered now, and because this has stretched on for so long, the 40 per cent, so essentially 40 per cent, that’s going to be the cash part of this, is now worth less than it was in 2025. And it’s certainly worth less than it was in 2024. The other consideration is the fact that there’s the suggestion that the payments could be made in monthly instalments. So again, if you get a monthly instalment, unless there’s some sort of interest compensation, that again is going to be worth less.”
Harris said the prolonged negotiations have already eroded the purchasing power of the money owed to public officers.
She said workers may, therefore, have to adjust their expectations of what the backpay will allow them to do, particularly if they had anticipated using a lump-sum payment for major expenses.
At the same time, Harris acknowledged that spreading the payments over several years could ease pressure on the Government’s finances.
“The Government budget is finite. There’s only so much resources that the Government has and the Government has to make allocation decisions. So if the allocation decision is to pay backpay, all of it or some of it, it means that they are not going to pay something else.”
She said the Government’s approach allows it to honour the wage settlement while limiting the immediate demand on its cash resources. The non-cash component also gives the State a way to settle its obligations without an equivalent cash outflow.
Both economists agree that paying the cash component gradually could help contain inflationary pressure.
Harris said a large lump-sum payment could produce a sudden increase in demand, while releasing the money gradually would have a more measured effect on the economy.
But she stressed that managing inflation does not eliminate the loss in purchasing power suffered by workers when payments are delayed.
Harris also questioned whether the original four per cent cash offer should have been accepted earlier, given the passage of time and rising living costs.
“This is how one could argue that the PSA may actually be worse off now because they did not accept four per cent in cash in 24, 25, the beginning of 26. And that money is now worth less because cost of living has gone up.”
The PSA has previously rejected the Government’s 40 per cent cash and 60 per cent non-cash proposal and sought a greater cash component of 60 per cent cash and 40 per cent non-cash.
The final decision now rests with the PSA and its membership, with the executive set to meet next week to determine its response.
