Public sector job cuts might be necessary - Dennis Chung

Dennis Chung, Chief Executive Officer of the Private Sector Organisation of Jamaica, is suggesting that the government will have to seriously consider cutting jobs in the public sector in order to correct the imbalance in its fiscal budget.

Speaking on RJR's That's a Rap, on Sunday, Mr. Chung said the government should have cut jobs during the 2009 financial meltdown.

That was the approach adopted by the private sector, he said, arguing that “the private sector had to adjust for that productivity and lay off people.”

Finance Minister Dr Peter Phillips has stressed that the government has honoured its commitment not to cut public sector jobs and urged the unions to meet the government half-way in the current negotiations. But according to Dennis Chung, this refusal to cut jobs in government constituted bad policy.

He said the government erroneously refused to cut public sector staff, opting instead to “hold wages stable but not take the productivity issue into account… and because of that, what we’ve basically done is push the thing down the road, in relation to the public sector, while the private sector has done the adjustment, he argued.”

This point evoked a cynical observation by panel member, Ian Wilkinson, QC: “The government and the politicians will not fire people because it will not fire people because it will affect votes!”

Business Consultant Chris Stokes, another panelist on That’s a Rap, in support of Chung’s point, basing his point in established economic theory: “The Keynesian model of government spending… when that spending happens, productivity has to happen somewhere and that is the context within which the model works.”