State Minister Spells out Wage Bill Issues to IDB in Mexico

Minister of State in the Ministry of Finance and the Public Service, Senator Arthur Williams, outlined measures being taken to deal with the macroeconomic challenge of an oversized public sector wage bill, to an investment seminar in Cancun, Mexico on Sunday (March 21).
Senator Williams spoke at an investment seminar hosted by international investment firm, JP Morgan, during the Annual Meeting of the Governors of the Inter-American Development Bank (IDB).
He highlighted Jamaica’s longstanding challenges, with high levels of indebtedness and a high public sector wage bill, relative to country averages across the world.
“Jamaica’s wage bill for financial year 2009/10 was 11.75% of its Gross Domestic Product (GDP), while the global average was 9% to 9.5% of GDP. Over the last year, the Government of Jamaica paid 117,000 public sector workers some J$126 billion in wages and salaries, plus a further $32 billion in other costs of running Government,” he explained.
Underscoring the unsustainability of the high wage bill and the constraints it places on the fiscal budget, Senator Williams referred to the policy interventions of successive political administrations in response to the wage issue, notably the three Memoranda of Understanding (MOU) between Government and the trade unions, beginning in 2004.
He observed that the wage situation was exacerbated by the recent global economic crisis, which led the administration to implement a wage freeze, which will now extend over a further two years.
He also noted that, as part of Jamaica’s economic programme supported by the IMF, the Government is obliged to pay all outstanding wage obligations over the next four years.
“Other measures being taken by the Government to treat with the public sector wage bill issue include measures covered under the Fiscal Responsibility Framework, as well as the work of the Public Sector Transformation Unit,” he added.
Senator Williams is accompanied on his trip by Dr. Wayne Henry, Chief Technical Advisor in the Ministry of Finance and the Public Service. They are representing the Government of Jamaica at the IDB Annual Meeting, which takes place March 19-23.
While in Cancun, Senator Williams will also hold discussions with senior officials from the U.S. Treasury, as well as with representatives of several international financial institutions, including the OPEC Fund for International Development (OFID), Citibank, Bank of America, Merrill Lynch, Morgan Stanley and Deutsche Bank. He returns home on Wednesday (March 24).