Chung supports proposal to cap public sector wages to percentage of GDP

 

Financial analyst Dennis Chung is in agreement with a controversial proposal by the Economic Programme Oversight Committee (EPOC) to cap public sector wages as a percentage of the country's gross domestic product (GDP).

 

Trade unions have rejected EPOC's recommendation, saying such a move would not be in the best interest of public sector workers, whose salary scales are still below that of other countries in the region.

 

But, EPOC Chairman Keith Duncan has sought to assure trade unionists that the proposal is not intended to limit wages but rather to ensure there is economic growth, which he argues will in turn enable the country to pay workers more.  

 

Mr. Chung says it is significant that public sector wages and salaries will increase to 12.8 per cent of GDP for the current fiscal year.

 

He adds that there is a need to bolster productivity to drive economic growth. 

 

"When the public sector wage increases were given the other day, one of the points that was made is that we need to tie all of that with productivity now, because if we don't do that, then you're going to find that it's going to cause an inflationary situation. And I think that a lot of inflation that you've seen recently is because of that. So what they're going to find, because of the inflation that's happened now, a lot of increases that you saw before, they're going to come right back to the real value of the wages before the increase," he sought to explain. 

 

In the meantime, Mr. Chung said the government should make greater use of technology to help boost efficiency and productivity in the public sector.