Central Bank Governor disturbs me

Firstly, the seeds of my doubt about the governor were sown when in the immediate past he remained silent on increases taking place on the items that affected us and spoke only about a kind of inflation (actually I think he spoke of two types and I am sure he has more to draw on) that was moving at four percent or thereabouts. Simple cost of living increases that affected you and I was not a factor in his world. It was only recently he admitted to the fact that food prices, a significant factor in determining the cost of living, was moving at 24 percent per annum or thereabouts. Mind you, interestingly, neither he nor anyone else seem to speak about a cost of living index that deals with the reality of the daily existence of citizens.

Both himself and Enill however have continued to argue that the significant increases in food prices arrived at by them and which are probably understated, are not enough to justify increases in wages. If economists are not performing the basic functions of monitoring prices/incomes and our revenues from energy based industries — which is all we are about in TT when you think of it, what could they all be doing?

Enlightened economists in civilised countries argue that wages are pushed by inflation and not the other way around as Enill and the governor seem to believe.

A little thinking on this would reveal that for them to be right, workers would need to have control of the workplace, industry and even the economy, which of course they don’t — even when there is full employment.

Government and business usually work together to keep a damper on wages (it makes their jobs easier) and in wage disputes workers are usually forced to settle out of frustration and loss (only workers lose in disputes, the salaries of the CPO, Ministers and executives keep coming and the increase to firms in the private sector can be recouped through retrenchment and/or price increases, improved management, “structural adjustments,” increased productivity, etc).

These facts are evident in the percentage wage increases given to major groups of workers over the last few years which when compared to the cost of living increases that have taken place over the same period, would indicate that workers have gotten poorer and wage adjustments to compensate for cost of living increases usually lag by one year or more if agreements are for longer.

Eugene A Reynald,

Port of Spain