A 2021 salary review for the Government of Montserrat Public Service says that 40% of civil servants are “working poor”, with the majority of them being women who are head of households.
The review, commissioned by the Office of the Deputy Governor arose primarily as a result of grading anomalies within the Public Service and its effect on the retention, recruitment and motivation of staff. It noted that as at November 12, 2021 there were a total of 978 officers which is approximately 35% of Montserrat’s labour force.
“The recent price hikes will see public officers experiencing an even greater reduction in their real income to that realized by the 21.6% cumulative inflationary impact for the period 2006-2020. This will lead to many public servants not having sufficient income to meet their basic needs, moreso for discretionary purposes such as savings and investment. More public sector workers are now likely to approach social welfare for assistance in the form of medical support and book grants and school lunch for their children,” it read.
“The annual increase in the wage bill has been marginal as Public Servants have not had any meaningful increase in salaries over the past 15 years. The majority of the allowances which forms part of the remuneration for some 250 civil servants has also been kept constant for the past 10 years,” the report stated.
During the 2023/24 Budget Speech, Premier and Minister of Finance Joseph Farrell announced an across the board three percent increase in salaries and the abolishment of the R scales below 1700XCD per month.
In 2022, the Montserrat Civil Service Association (MCSA) picketed government offices in an attempt to call attention to the need for a salary increase. They requested a seven percent increase which was in line with the recommendations laid out in the report.
However, Nyota Mulcare, President of the MCSA says a lot has changed since that report was conducted. She does not believe the recently announced three percent will have an impact on the workers as cost of living has continued to escalate on Montserrat, along with increases to the Social Security contributions now in place.
The report compared Montserrat’s public sector salaries along with the cost of living to other member states in the Eastern Caribbean Currency Union.
“… the total cost of staple products such as milk, rice, eggs and bananas is much higher, on average by 50%, in Montserrat than all the other six territories. Importantly also is the fact that, the average monthly net salary for Montserrat is considerably much lower in Montserrat than the other states, with the exception of Grenada.”
According to the review, “some 715 or 73% of public officers are between the ages of 30-59. It means that 73% of the workforce are most likely heads of household and/or have dependents which carries additional financial obligations. It is noticeable that some 60% of government employees is earning less than $4,000.00, and only about 25% of public servants are earning in excess of $5,000.00. In effect almost 75% of Public Servants are taking home $3,640 or much less, this is because an Officer earning $5,000.00 ends up with a take home pay/net salary of $3,640 (£984) after $1,200 is deducted in Personal Income Tax plus a $160 deduction for Social Security payment. In comparison an Officer earning $4,000 takes home $$3,248 (£877) following deductions of $600 and $154 for income tax and social security respectively.
“Based on the ODG Compensation report (2020) and data from the Statistic Department, the estimated cost of living in Montserrat is currently $2485 per month for a single person. The current average monthly salary within government is $4,047 before tax. … Clerical Officers are earning well below a livable wage and as already explained, are currently noted to be “working poor”. While the Executive Officers fare slightly better, what needs to be stressed is that these approximate costs are based on a single person and 2020 prices. In reality, many public officers have dependents on and off-island who they are required to support. While Executive Officers may be able to barely manage the basic necessities with their income, they would not be able to do so with a dependent,” stated the report.
The report also noted that according to the Estimated Cost of Living of $2485, approximately 40% of those employed within the government do not earn enough to cover the basic cost of living. Therefore, around 40% of workers currently do not earn a livable wage. Women are also over-represented within this percentage of workers as they account for 60% of those who do not earn a livable wage.”
Premier Farrell told Discover Montserrat the three percent is how much the government could have afforded this year. “The decision from the cabinet was to pay seven percent incrementally. While the general increase is three percent, when the adjustments are made to the salary scales for nurses and teachers and the lower R scales are abolished, these adjustments plus the three percent will increase the budget vote this year by over four million. The intention is for a seven percent increase, and government will keep its promise. How much is paid in another financial year will be determined after aid discussions, but this is a priority.”
The MCSA president said she is hoping to meet with the premier on his return from the JMC to discuss the salary adjustments made to the general civil service and also specifically what has been done to fix the anomalies for nurses. She added that the union had been expecting to receive proper documentation from the government on the changes so as to inform their membership. Mulcare said workers will have to wait until the end of May to see how the three percent is reflected on their pay slips.
The deficiency in human capital on island was highlighted as one of the reasons that the government has had to engage technical consultants to provide services in a number of areas throughout the Public Service. “To date, governments has contracted just about thirty (30) Technical Co-operation Officers (TCs) along with eleven (11) ongoing consultancies. The current Technical Co-operation Budget is approximately $7.5 million.”
The review stated that for “the majority of the posts, Montserrat public officers are paid less than their counterparts in BVI, St. Lucia and Antigua but are paid slightly higher than their counterparts in Grenada and Nevis. Montserrat citizens are subjected to the highest level of taxes of the ECCU Member States both direct taxes and indirect taxes. Further, although Montserrat Government employee salaries compare favourable with a few ECCU member states, the cost of living or price of basic goods and services in Montserrat is much higher than the member states. Montserrat public servants are at a disadvantage as it relates to financial sustainability when compared with their counterparts of the other ECCU territories and BVI. The foregoing are some of the main factors why Montserrat is viewed as being unattractive for persons to live and work; and have partly accounted for the challenges experienced in attracting and retaining skilled employees within the Public Sector, as evinced in key sectors like teaching and nursing.
“Montserrat has experienced an accumulated inflation rate of 21.6% over the fifteen-year period. This has caused a serious erosion in the spending power of public servants.
“What this, in effect means is that the basket of goods that public servants was able to get in 2006 with their income, that level of income can only buy 80% of those goods. Put differently, an item which cost $1,000.00 in 2006 a public officer now has to $1,216.00 for that same item. This severe erosion in the pending power has caused increased hardship for most officers. Economic activity is also being impacted by the sustained reduction in real income workers limited level of disposable income which has led to low levels of consumption and demand.
“Already for 2021, Montserrat consumers are experiencing sharp (in excess of 10%) increases on basic commodity prices in the supermarkets. This we expect to continue well into 2023 according to the economic prognosis. Public servants are therefore now realizing even greater erosion in their spending power than the cumulative 21.6% mentioned earlier up to 2020.”
The review recommended a “seven percent salary increase for all public servants to take effect April 01, 2022. The nominal cost to GoM for awarding this increase salary is $2.8 million. The effective cost to GOM will however be $2.24 million as approximately 20% of the $2.8 million will directly return to GoM in personal income tax. There will be additional benefits to the economy and to GoM from offering a salary increase as an increase in public servants’ disposable income will increased domestic consumption which will in turn result in increased consumption taxes for GoM.”
Government’s 2023/24 annual bill for salaries, wages and allowances represents about 37.7% of the government’s recurrent budget of $150.5 million. His Majesty’s Government (HMG) finances 65% of Montserrat’s recurrent operations with the balance funded from local revenues.