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Raffique Shah


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Case for equity in salaries, perks

March 14, 2004
By Raffique Shah

THE industrial unrest that has erupted in just about every sector of the economy, but none so worrisome as that in the oil and gas industries, must be a source of grave concern to the Patrick Manning Government. Like a noose, it now appears now to be tightening around Government's neck, with NATUC threatening a "nationwide shutdown" that sounds ominous. To compound the Government's woes, the strikes and threats of industrial action seem to offer a window of opportunity for those who have sought to destabilise the country ever since Manning returned to power.

In the case of the workers involved in building Train IV of the Atlantic LNG plant, most people express the view, "Dey already getting high wages, what de hell dey want now?" There is no question that these workers are being paid higher than what can be considered the national average. But there are several other factors that must be considered if one must be fair to them. On the campaign trail, the PNM boldly proposed a higher minimum wage in the energy and heavy construction sectors should the party come to power. There must have been a rationale for making such a promise.

When these mega-plants are in the construction phase, they hire the most workers-as many as 3,000. Once the plants are commissioned, though, they employ as few as 300 full time employees. So the construction workers enjoy what may be seen as high wages, but only for limited periods. In other words, as the plant becomes operational, they become unemployed, at least until another similar plant is being built, where their skills are required. This holds good for all heavy construction (meaning big industrial plants). In ordinary construction, wages for skilled and unskilled workers are more or less standard.

Manning understood this. Now, sitting as Prime Minister, he appears to want to renege on that promise. He talks about Cabinet having an overall view of what such increases could mean for the economy, and based on the utterings of Labour Minister Larry Achong, one gets the impression that members of Cabinet are divided on the issue. In fact, Central Bank Governor Ewart Williams has spoken out against "sectoral increases" in so far as the minimum wage goes.

Williams is obviously looking at the workers' and unions in the oil and gas sectors through the eyes of the nation's chief economist, in a manner of speaking. He sees an imbalance that could lead to further unrest, and worse, inflationary trends that are triggered when more money is pumped into the economy by whatever means. Both Manning and Williams must know, however, that at best, some of these workers will enjoy a year, maybe two, in the jobs they are contracted to do. Beyond that, their future is uncertain (surely, we must be coming close to saturation point in the case of heavy industrial plants). Add to the short-term nature of their employment the fact that they have no entitlements to terminal benefits or pension plans, etc., and then one can grasp their true plight. If these plants were constructed in developed countries, workers there would be paid substantially higher wages than they are here.

There is yet another point. Because these heavy industries enjoy tax breaks in several forms even as they utilise our gas and oil and water and power, really, their only contribution to the economy in the first few years of operation are minimal royalties and taxes, in the latter case mainly what is paid by those employed the companies. The wages of these construction workers are subject to taxation, which enhances the national coffers. The workers also enjoy spending power, which stimulates business. And knowing the uncertainty of future employment, many would put aside something for the proverbial rainy day, which strengthens the financial sector.

Mr Manning understood all of this when he put the proposal for an increased minimum wage in the heavy construction sector in the PNM's elections package. So what's the problem now? Why is he backing off? More than likely he and most of his Cabinet colleagues probably feel that if they up the ante here, they will have to follow suit elsewhere. Already people are comparing the rates these construction workers are seeking with those of public servants and teachers. But I wonder how many of the latter will leave their offices or classrooms to enter the unstable, at times hostile, environment of a heavy construction site? And that without vacation leave, sick leave or terminal benefits? I rest my case for the construction workers.

Shifting gear, we see workers employed elsewhere, from T&TEC to UWI, are also making heavy demands on their employers. They are not happy with the standard 10-per-cent-over-three-years that Government's Inter-Ministerial Committee seems to be stuck at wherever Government has a stake. Besides the fact that this faceless body seems to wield inordinate power to create mischief, how can they justify increases of more than 30 per cent for government ministers and selected personnel under their control while they try to restrict other workers to piddling increases? Do these workers not have to face the same supermarkets as ministers or consultants? Do they not have children to educate, just like personnel who receive royalty-type salaries and perks?

I can tell you that in industries, those who pay "piddling" sums like $15,000 a month for engineers or technicians lose them to others who are prepared to pay $30,000 and upwards! In this environment of packages-gone-wild, how can Government justify denying daily-paid employees or monthly-paid staff at institutions like UWI decent salaries?

As for those who are threatening to "shut down de country", they more than likely have hidden agendas that workers need to beware of. MPATT, for example, does not have a case (I am sorry I don't have the space to tell them why). If they can prove they have the majority of doctors in their organisation before the relevant body of the Industrial Court, they will get recognition in due course. But to suggest the new legislation denies them their democratic rights is hogwash.

In the final analysis, though, Government cannot hide behind the fig leaf of inflation to deny workers their just rights. If that were a consideration, then all MPs and ministers and their well-paid consultants should hand back to the Central Bank whatever salary increases and perks they recently got. In determining wages, salaries and perks, especially in a time of plenty, Government must not only be fair, but it must be seen to be fair. In this regard the Inter-Ministerial Committee comes across like an ogre, not a godfather or good father.