The secret is out, the end has been reached and made known for all to see. What we are witnessing is the massive salary increases which the Government of Jamaica has given to the members of the executive and members of parliament. The increases show a massive jump, effective April 1, 2022, and then increments of an average of 10% over the next two years. For example, in the case of the Prime Minister, his salary will increase by about 143% effective April 1, 2022, moving from about $9M per annum to about $22M per annum and then to roughly $25M in April 2023, and approximately $28m in April 2024.
In an ideal situation, paying a Prime Minister the equivalent of about USD $160,000 per annum is not excessive, but two factors must, in my view, be considered when assessing the current situation. These are:
- The context of compensation, earnings of the country, and comparative increases to public sector workers during the same period, and
- The duty of the government to lead and serve by example.
While some public sector workers have seen reasonable, and in other cases substantial increases in their compensation, none have seen the level of increases, in percentage terms, that members of the executive and legislature have seen. Taken in its bald frame, the actual jump the Prime Minister will see in his June 2023 salary, assuming the new rates are implemented then, is a 177% increase over the current salary, with the entire year 2022 being retroactive payments which will amount to about $13M before taxes. If the figure for 2024 is considered, the increase amounts to 211%!!
The economy has just returned to near pre-covid levels of Gross Domestic Product (GDP) output, but in the last two years prior to covid-19 was seeing a decline in growth and earnings. In the Fiscal Year 2018/19, the economy grew by 1.6%, and in 2019/20 by negative 2.1%. The “growth” for each fiscal quarter showed:
April to June 2019: 0.3%
July to September 2019: -0.2%
October to December 2019: -0.5%
January to March 2020: -1.7%
Jamaica’s total output in goods and services (GDP) over the last seven years is shown in the table below.
Jamaica’s GDP 2016 – 2022
|YEAR||GDP USD (Billion)||% CHANGE OVER PREVIOUS YEAR|
The data reveal three stark facts, namely:
- If we minus the pandemic year of 2020, the average GDP growth over the period is a mere 2.7%.
- In 2021 and 2022, the total output was about that of 2016 and 2017.
- The data refute the government’s oft repeated claim that the economy is back to pre-pandemic levels. The best gauge of pre-pandemic is 2019 or 2018 when output was about $15.5B, average across both years. Both 2021 and 2022 are below that $15.5B mark.
The duty and purpose of the government is the lead the process of productive output, through the creation of the conditions for growth and increase earnings. Earnings are the sources from which salaries are paid. Thus, the big question is: if earnings are down, how on earth can the government be granting itself increases of the levels shown above?
The related question is: if the mass of public sector workers were given an increase of an average of 20% over three years, how can the Prime Minister give himself a 211% increase over the same period?
The inescapable conclusion is that the government has acted irrationally, selfishly, and without regard for the realities of the country it is leading.
Duty to lead and serve by example
Governments tend to use a disingenuous argument when defending massive increases in wages to themselves, while seeking to justify smaller increases to the masses of public sector workers. The argument is that because they are few (in Jamaica’s case an executive of about 20 and an additional 43 Members of Parliament) a massive increase to them will not have a deleterious impact on the economy.
While this is so, there is a higher principle to which the government must hold itself and that is the principle of equity. It is manifestly unconscionable and insensitive for the Prime Minister to give himself an increase which is over ten times the rate given to those he serves. While acknowledging that Members of Parliament and Ministers of Government deserve an increase, such an increase ought not to have been so out of line with the country’s actual earnings nor the rate that public sector workers were pressured into accepting.
The way forward
I propose three actions on the way forward:
- That the government reverses itself. This level of increase over three years is clearly unconscionable. The reversal could take one of three forms. Either a reduction in the percentage increase over the three years, or a spreading of the increase over five years, or, imposing a red circle such that it does not take a further increase until 2027.
- That in the absence of (i), the government revisits the package for public sector workers and ensures that greater equity is created between the rank and file and the elected officials.
- That the Opposition formally opposes the increase and take such steps as it is able to ensure greater equity and recognition of the economic realities Jamaica faces as shown in the GDP data.
Professor Canute Thompson is Professor of Educational Policy, Planning, and Leadership at the School of Education, The University of the West Indies, Mona Campus, and Head of the Caribbean Centre for Educational Planning. He is author of two award-winning books and articles, among his collection of eight books and over a dozen journal articles, and the operator of leadershipreimagination.com website.