The Bank of Jamaica, BOJ, is cautioning businesses against excessive pay rises for employees as the country continues to grapple with inflation concerns.
Speaking earlier on Monday at a quarterly monetary policy briefing, BOJ Governor Richard Byles says sharp increases in salaries without an attendant increase in productivity will hurt the economy.
Chevon Campbell has that story.
As Jamaicans celebrate a historic low unemployment rate of 4-point-5 percent as registered in April this year, the Bank of Jamaica is sounding the alarm about the growth in wages.
The growing labour shortage in key areas in the economy could prompt significant increases in salaries.
The logic is that employers will pay more to retain existing staff and pay more to attract staff to fill key vacancies.
This, on the surface, seems like a good thing for workers.
But the BOJ Governor says this could cause a rise in inflation.
Jamaica’s point-to-point inflation rate, which is the greatest indicator of the cost of goods in the country stands at 6-point-6 percent.
This is slightly above the four to six percent target range set by the BOJ.
Governor Byles is cautioning business leaders to keep their pay rises modest.
He says the smart thing to do is keep wage rises in line with the inflation projection.
Under the government’s compensation restructuring exercise, the average public sector worker will see a 1-hundred-and-78-percent increase in their monthly wage come 2024.
This Mr. Byles says, has now been priced into the Jamaican economy.
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