Think of lump sum payment
Ex-economist offers suggestion to civil servants
A former Government economist is advising civil servants to consider the implications of a one-time lump sum payment versus an increase on their monthly salaries.
His comments came in the wake of the National Union of Public Workers’ meeting held on Wednesday night, at which the membership rejected two scenarios presented by Government to give workers what the union has called a “coping mechanism” on a scale of between two and five per cent.
The economist, who requested anonymity, said analytics should play a major role in the overall decision making, noting that any sensible analyst would be looking at the total amount and follow with a discussion, while cross referencing that figure with the other amounts owed by the Government to the public.
“Each Barbadian needs to understand their purse, and be conscious of the decision being made. They need to ask is it better for me to take a one-time payment of $2 000, which means I probably would pay my bills on time this month, but I’ll spend the rest in leisure, or to get an additional monthly income of $150 which can be put toward something important.
“The one-time payment may hurt the country’s budget target, unless it can be offset with the sale of a major asset. All these things need to be taken into consideration, and the individual informed as opposed to how they feel. This is why analytics is important,” he said.
For the past two years, both the union and the Ministry of Civil Service have been locked in negotiations to give public servants a salary increase, the last of which was nine years ago and the union has put on the table the coping mechanism pay.
“That is a one-time payment, and if you’re saying to me now you’re finding ways to create a mechanism of another one-time payment that isn’t legally or constitutionally due, I, for argument sake, will want to put that whole thing into view and comparison. If you’re asking for more, then that is a problem,” he told the WEEKEND NATION.
Adding that each individual’s purse had different sizes, he said the Barbadian public needed to be concerned about their finances and how much they were spending.
“If nobody talks to you, and advises you to look at how your expenditure pie is created, you would take the lump sum payment. For argument’s sake, if the amount is $2 000, you will pay your bills for one month, and spend the rest in leisure. However, if you get an extra $150 per month, you can pay an extra bill or add it to something that is more meaningful.
“If someone will sit and talk to people, they would
realise what makes more sense. If we divided that $2 000 by 12, that’s just over $150 per month. Any level headed person if given a choice of a one-time payment of $2 000 or a monthly payment of $150, would go for the extra $150 a month as opposed to the one-time payment,” he explained.
Recent reports from the business community have shown that the general spend of citizens has been down for this year. And with the introduction of the National Social Responsibility Levy, citizens have not had extra disposable income to spend outside of their recurrent expenses.
“You want people to have an understanding, an inner standing and an outer standing. How they feel about it and an expression of that feeling is what must be recorded. That isn’t being recorded between the unions and the people. You need to connect with and get the pulse of the people,” he said, adding that knowing what he knows he would opt for the monthly increase as opposed to the one-time lump sum payment. ( RA)