The maths of public-sector wage negotiations

CPO Dr Daryl Dindial -
CPO Dr Daryl Dindial -

Once upon a time, long ago and far away, as the story goes, girls were thought by the men who developed curricula not to be good at math. That was before Kristalina Georgieva rose from being the CEO of the World Bank to becoming the MD of the IMF, succeeding Christine Legarde, who managed to be both head of the IMF and the EGB.

Girls were encouraged to do “domestic or household science,” or in some cases, Latin or Greek in secondary school, rather than mathematics, algebra , geometry, or calculus.

And don’t even mention non-Euclidean geometry. That would have been like going past Newtonian physics into string theory, which hadn’t even been developed.

The curriculum designers were apparently oblivious to the fact that household management was redolent with arithmetical imperatives such as budgeting, sourcing preferential consumer variables, cost control, as well as sociology, conflict and household management, supply chain processes and, as one teacher wryly put it “how to make a dollar stretch a mile.”

In this file photo public servants head to work at the Inland Revenue Division, Port of Spain. -

So when I spent all those years in the Senate I decided to focus on issues of most concern to women. You know: crime, cost of living, equity in employment, education reform and domestic and other kinds of violence such as that that enters into wage negotiations. Basic survival issues.

So it is not surprising that, despite my at-times arithmetical shortcomings, I am fascinated by the announcement on April 1 this year from the office of the CPO stating that on the instructions of the Minister of Finance, the Honourable Colm Imbert, the CPO, a former military commander, would begin negotiations this week for approximately 90,000 government workers.

The word “approximately” is used, because the Industrial Relations Act does not include, under the definition of “worker” – Section 4 (a), (b),(c) and (d) if you want to check, people who work for the police, fire services, prison, regiment, municipalities, estate and rural constables, teachers and employees of the Central Bank. They are covered by their own rules and regulations, as government employees always seem to be, but the CPO may be negotiating for some of them as well. At any rate, the government still has to find cash to pay them, so he might as well. If he doesn’t, Mr Imbert will have to.

Government employees are what is known as “cost-centric” employees. They cost their employer (the government) but do not bring in income other than stamp duties, licensing fees, etc. They are not “income-centric,” bringing in enough money to pay for their own salaries and wages, the rental and maintenance of the buildings and vehicles they work in, utilities such as water telephones, insurance, stationery materials and equipment, internet and electricity and so on and on.

Do not forget, out of the 1.4 million people in this country, according to the NIB only a little fewer than 405,000 are working. Self-employed people are not covered.

So of those 405,000, 90,000, or one out of every five people, is working for the government.

And if I am correct, in Tobago the figures are higher. Recent estimates published estimated that 76 per cent of people employed in Tobago work for the THA, up from 20 per cent around Independence. Which, if correct, means the THA is responsible for some 12,000 employed people out of the 17,537 listed by the CSO. (Do not count on the accuracy of CSO figures: they last upgraded them 11 years ago.) I do not know if the THA employees are included in the negotiations.

“Consultants” and contract workers or those who work on commission are not included in these negotiations.

Finance Minister Colm Imbert -

But the CPO does not just have wages and salaries to negotiate. There are also the costs for permanent workers of pensions and medical benefits for current and thousands of retired employees, widows, orphans and dependent parents of deceased civil servants' benefits and for the current employees, full pay for pandemic leave, vacation leave, study leave, leave for union business, disability leave, casual leave and other leaves that will have to be taken into consideration – and still stay within the limits of Mr Imbert’s budget.

These workers in the main are not "income-centric," so it is beyond my admittedly limited mathematical ability to figure out where the money will come from. Last year the minister had to borrow money to pay salaries.

My household science teacher would have torn his hair out, if he had had any left. He taught that budgeting rules were inviolate. Rule number one was: over-budget and under-spend. Rule number two was: never, never, never borrow money for recurrent expenditure, only for building up assets that will bring in income to pay off all monies borrowed within a measurable timeline. Rule number three was save at least 10-15 per cent of income so that you will always have at least six months' income put by for emergencies, because emergencies
always come in life. Of course, that was for domestic budgeting. Maybe when it is on a government level the rules change?

It would help if we could be told what rules the Honourable Minister imposes on his chief negotiator so we could see what percentage of our corporate and income taxes are going to be used for paying the 90,000 government employees.

There is a system called “productivity bargaining” used in the private sector to make sure that increases in wages, salaries and benefits are commensurate with what is known as ROI or return on investment. Nuff said.


"The maths of public-sector wage negotiations"

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