Wages and Reality

Almost as if on remote cue, the recently released International Labour Organization’s (ILO) Global Wage Report 2024-2025 strikes some amazingly familiar chords when cross-referenced against the ongoing Salaries Review Commission (SRC) issue and accompanying discussions surrounding what is essentially a question of wage inequality among T&T workers.

I had originally thought about directly engaging the SRC matter, including the Prime Minister’s astounding manner, but noted the contribution of fellow GML columnist, Helen Drayton on Sunday. In my view, she has inserted the clearest, most principled considerations into the discourse – sullied as the ongoing debate is by political partisanship, outright malice, and gross ignorance.

There is no simple summary of the former Independent Senator’s missive, so if you have a serious interest in the subject, please get your hands/eyes on a copy and read every word.

In (totally inadequate) brief, Ms Drayton gets into the methodology employed by the SRC – the Hay Job Evaluation System - proposes a “judicious” review of its recommendations, urges consideration of specific features of the public service, and suggests a parallel starting point of 4% for everybody (my summary).

She also explores in lesser but important detail, the vexing question of government involvement in wage negotiations in institutions of the state.

In my view the ILO Wage Report addresses such issues from the broader perspective of whether, in any economy, equity prevails as a norm in assessing remuneration within and across sectors. This includes the informal economy which constitutes an important, growing element of our macro-economic landscape.

There is, according to the Report, a decline in global wage inequality – the relationship between low and high wage earners. The statistics provided are not sufficiently disaggregated to represent our own reality, but there is a sense that this might not entirely be the case here. The Ministry of Labour should tell us what is known about T&T trends, as the unions appear hopeless on matters of research.

It is correspondingly insufficient to point to the egalitarian nature of high turnouts at entertainment centres, street food stalls, and “Black Friday” sales to conclude that things aren’t as bad as being portrayed by some.

Protesters occupying public spaces appear well-fed and dressed, and parking spaces at such events are hard to find. So, should we ask where are the “suffering masses?”

One respected senior journalist turned to me at a recent business function and asked: “Does this look like we are in serious financial trouble in this country?”

The quick resort to anecdote over careful perusal of data and research appears to be the preferred option. Yet consumers jumping on each other’s backs at five in the morning at a sale does not signify that all is okay. Neither does an absence of chronic, vociferous public protest nor the long lines at the doubles, gyro, and empanada stalls.

These things do, however, tell us something about the elasticity/inelasticity of public opinion and behaviour.

Both the beleaguered labour unions, which represent an increasingly small minority – less than 25% of the working population - and employers in the formal sector (those in the know can insert their own statistic here) however appear to be missing some important points.

Additionally, wage inequality in the informal sector typically represents a worst-case scenario with women experiencing the messiest end of the stick alongside employees in selected sectors together with migrant and under-age workers.

Under such scenarios, even otherwise indispensable “social dialogue” does not often capture the realities. Neither the labour unions nor employers typically include adequate consideration of these cohorts. It is worse now that tripartism appears to have disappeared as a feature of the labour environment and is being replaced by “gambage” and political extortion.

Dysfunctional collective bargaining arrangements are also degrading the prospects for an organised, rational approach to wage setting and other incentives. Additionally, for too long now, and in important spaces, negotiations lag sluggishly behind work contract timelines.

In the same way there is a justifiable focus on the nature of the evaluation leading to the SRC recommendations (based on the perception that these senior state employees are otherwise well-off) there is an absence of the assessment of needs in the organised labour sector.

What, indeed, is a “starvation wage?” Placards do not have the space to explain, and the main spokespersons appear unwilling or incapable of accepting the brief. Between the ILO Report and Helen Drayton’s submission, there are important clues. The chatter occupying the political and labour spaces is not particularly helpful.