Dear Editor,
I feel compelled to respond to the article headlined 'Roberts continues push for incomes policy' published in yesterday's Jamaica Observer.
This is an approach which Danny Roberts has agonised over since the existing impasse arose. There have been many occasions when we have contemplated how to render assistance to the parties so as to create accommodation.
We are experienced in this regard since then Prime Minister Bruce Golding summoned us (Danny Roberts, Ward Mills, and me) in 2008 to try to end the then dispute over wages and fringe benefits. Our intervention was successful and we were able to present the prime minister with an agreement which he instructed the public service sector of the Ministry of Finance to implement.
Roberts' suggestion as an ideal approach to the present dispute is far from perfect, but as the old saying goes, "A drowning man will clutch at a straw."
Let me firstly outline my definition of an incomes policy. The English business dictionary states: "A voluntary or statutory regulation of the level of increases in prices and incomes."
This is a mechanism "through which a government attempts to control escalation in incomes (wages, salaries, dividends, rents) to restrain escalation in prices (inflation) without increasing unemployment".
Roberts makes the following pronouncements worthy of note:
1. The Administration's approach to the current public sector wage negotiations would bear no sustainable benefit if the parties to the negotiations — the Government and trade unions — do not seriously examine the development of an incomes policy as a tool to address the current crisis.
My response is one of agreement. I prefer, however, the American reference to wages and price control in preference to the European "incomes policy".
2. The policy would reflect constraints on both wages and prices, and it need not be extended to other forms of income.
This is perhaps questionable. The relevant question is: Should Government extend wage control to prices generally, dividends and rents?
3. Under an incomes policy, Government would be expected to regulate escalation in incomes to curb rise in prices (inflation) without increasing unemployment.
A number of questions arise here, the answers to all of which depend on whether we believe in the cost push inflation theory or the demand push inflation theory. "Believers in the cost push inflation theory are the greatest advocates of incomes policy, whereas believers in the demand push inflation theory regard it as a supplement to fiscal measures".
4. An incomes policy would prove a useful tool to support the Government's broad fiscal and monetary policies, adding that "an incomes policy can play an important role in macroeconomic management".
This I entirely agree with.
5. Such a policy would provide for real wage growth by coupling wages to productivity. This would involve full engagement of the Jamaica Productivity Centre in developing productivity programmes and measurements designed to achieve improvements in total factor productivity.
Lack of meaningful productivity increase has been the bane of Jamaica's competitiveness for many years.
It was Prime Minister Portia Simpson Miller who, in her capacity as minister of labour, sought the assistance of the International Labour Organisation to address productivity needs in Jamaica and the establishment of the Jamaica Productivity Centre.
This centre is a department of the Ministry of Labour and Social Security and is responsible for promoting and facilitating productivity enhancement at the national, sector, industry and enterprise levels. It is a tripartite organisation comprising the Government of Jamaica, the Jamaica Confederation of Trade Unions, and the Jamaica Employers' Federation.
Since its establishment, nothing significant has happened to the productivity rate.
The real purpose of my intervention is to invite responses from centres like the Department of Management Studies, as Roberts' proposals need greater discussion. Public sector wage negotiations need innovative approaches.
Dwight A Nelson
Former state minister for the public service and chairman, Jamaica Confederation of Trade Unions
Danny Roberts' proposals need greater discussion
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I feel compelled to respond to the article headlined 'Roberts continues push for incomes policy' published in yesterday's Jamaica Observer.
This is an approach which Danny Roberts has agonised over since the existing impasse arose. There have been many occasions when we have contemplated how to render assistance to the parties so as to create accommodation.
We are experienced in this regard since then Prime Minister Bruce Golding summoned us (Danny Roberts, Ward Mills, and me) in 2008 to try to end the then dispute over wages and fringe benefits. Our intervention was successful and we were able to present the prime minister with an agreement which he instructed the public service sector of the Ministry of Finance to implement.
Roberts' suggestion as an ideal approach to the present dispute is far from perfect, but as the old saying goes, "A drowning man will clutch at a straw."
Let me firstly outline my definition of an incomes policy. The English business dictionary states: "A voluntary or statutory regulation of the level of increases in prices and incomes."
This is a mechanism "through which a government attempts to control escalation in incomes (wages, salaries, dividends, rents) to restrain escalation in prices (inflation) without increasing unemployment".
Roberts makes the following pronouncements worthy of note:
1. The Administration's approach to the current public sector wage negotiations would bear no sustainable benefit if the parties to the negotiations — the Government and trade unions — do not seriously examine the development of an incomes policy as a tool to address the current crisis.
My response is one of agreement. I prefer, however, the American reference to wages and price control in preference to the European "incomes policy".
2. The policy would reflect constraints on both wages and prices, and it need not be extended to other forms of income.
This is perhaps questionable. The relevant question is: Should Government extend wage control to prices generally, dividends and rents?
3. Under an incomes policy, Government would be expected to regulate escalation in incomes to curb rise in prices (inflation) without increasing unemployment.
A number of questions arise here, the answers to all of which depend on whether we believe in the cost push inflation theory or the demand push inflation theory. "Believers in the cost push inflation theory are the greatest advocates of incomes policy, whereas believers in the demand push inflation theory regard it as a supplement to fiscal measures".
4. An incomes policy would prove a useful tool to support the Government's broad fiscal and monetary policies, adding that "an incomes policy can play an important role in macroeconomic management".
This I entirely agree with.
5. Such a policy would provide for real wage growth by coupling wages to productivity. This would involve full engagement of the Jamaica Productivity Centre in developing productivity programmes and measurements designed to achieve improvements in total factor productivity.
Lack of meaningful productivity increase has been the bane of Jamaica's competitiveness for many years.
It was Prime Minister Portia Simpson Miller who, in her capacity as minister of labour, sought the assistance of the International Labour Organisation to address productivity needs in Jamaica and the establishment of the Jamaica Productivity Centre.
This centre is a department of the Ministry of Labour and Social Security and is responsible for promoting and facilitating productivity enhancement at the national, sector, industry and enterprise levels. It is a tripartite organisation comprising the Government of Jamaica, the Jamaica Confederation of Trade Unions, and the Jamaica Employers' Federation.
Since its establishment, nothing significant has happened to the productivity rate.
The real purpose of my intervention is to invite responses from centres like the Department of Management Studies, as Roberts' proposals need greater discussion. Public sector wage negotiations need innovative approaches.
Dwight A Nelson
Former state minister for the public service and chairman, Jamaica Confederation of Trade Unions
Danny Roberts' proposals need greater discussion
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