_crop.jpg)
BOJ Governor Richard Byles - file photo
.png)
Employers are being cautioned against implementing massive wage increases.
Richard Byles, Governor at the Bank of Jamaica (BOJ), says a large jump in salaries could have a negative effect on inflation.
"If we do get large wage increases and those translate into increased prices, then we are going to have a new cash push effect on inflation. If those wage increases are A) not that substantial, or B) accompanied by increased productivity, then the impact on price increases should be nominal and not so much of a threat," Mr. Byles explained.
He said employers should consider the current rate of price increases when they look to adjust wages.
If the wage increases are within the current rate of inflation of about 7 per cent, the impact will not be as significant. "But once it goes significantly above the inflation rate currently and is not accompanied by increased productivity, it will have an effect," he warned.
The warning from the BOJ governor comes after the government programmed a multi-billion dollar increase in wage allocations for public sector workers, as part of the public sector compensation review programme.
Parliamentarians also received significant wage increases.
comments powered by Disqus
.jpg)
All feeds
