Public Service: The Difficult Equation of Salaries
8 October 2009
Read by 2093 persons
Les syndicats réclament encore une fois des augmentations.
In eight years, the state has injected an additional 30 billion DH into salaries, and in five years, the average salary in the public sector has increased by 23%.
After being reduced from 11.8% to 10.4% of GDP between 2004 and 2008, following the voluntary departure operation, the wage bill would represent 10.3% at the end of this year and would remain almost at the same level in 2010.
It's back to a new round of social dialogue. The government and unions resumed talks on Monday, October 26 as planned, but the meeting had to be "shortened" due to the Prime Minister's schedule. It was therefore rather "formal", according to the expression of a unionist. This meeting, which was attended by the UMT, the FDT, the UNMT and the UGT (the CDT being scheduled for the following day, October 27), was finally postponed to November 2. Given the demands of each party (see La Vie éco of October 23, 2009, www.lavieeco.com), the situation could be tense and the autumn rather hot! The unions prioritize the improvement of income (salaries and pensions) and will not change their minds. The government may well present figures demonstrating its efforts towards employees, but to no avail. The unions adhere to a seemingly simple equation: firstly, the improvements already granted are in fact a catch-up on what should have been done earlier, and secondly, the price increases, which they say are not reflected in the inflation rate, have already "cancelled" the effect of the decreed increases. Not to mention, they add, that the level of increases is not the same for everyone. "We are told about the reduction in income tax as an indirect increase in salaries. We forget that the bulk of the troops, those who receive low wages, are not concerned," fumes a unionist from the Democratic Federation of Labor (FDT).
Whether they like it or not, the issue of remuneration, almost consubstantial with the liberalization of the economy, will now be at the heart of social struggles. We will therefore have to deal with it, but the other question that arises simultaneously is to know what room for maneuver the government, and more generally the economy as a whole, still has to meet such a requirement.First, the government: can it do more than it has already done? Does it have the means? For the state public service alone, the wage bill will amount to 76.4 billion dirhams in 2009, it will increase to 80.5 billion in 2010, for nearly 800,000 civil servants (including the 23,000 recruitments planned for 2010).
After being reduced from 11.8% to 10.4% of GDP between 2004 and 2008, following the voluntary departure operation which allowed the reduction of the public sector workforce by 40,000 people, but above all to the increase in gross domestic product (GDP), the wage bill would represent 10.3% at the end of this year and would remain almost at the same level in 2010. This is still a lot, some will judge, sustainable others will estimate.
7,150 DH, this is the average salary in the administration, a director earns 23,500 DH
Another argument in favor of the state, according to the statistics of the General Treasury of the Kingdom (TGR) compiled at the end of 2008, the average salary in the public service increased by 23% in five years (2004-2008), going from 5,800 DH to 7,150 DH, i.e. an average annual increase of 4.6%. Presented in this way, this evolution is well above the inflation rate (an average of 2%). With the improvement resulting from the reduction in income tax (IR) in 2009 and then in 2010 and the second installment of the salary increase that took place in July 2009, the average remuneration is undoubtedly a little higher. With the two reductions in income tax and the increases that came into effect on July 1, 2008 and 2009 alone, approximately 11 billion dirhams are injected into salaries (public and private) in two years.
The problem is that reasoning by average gives a rather imperfect view of reality. And this is even more true in a context where salary differences, as in the public service, are significant (a ratio of 1 to 30 according to the unions, 1 to 26 according to the Ministry of Modernization of Public Sectors). For example, in the administration of justice, the average salary is 7,662 DH, 7,030 DH in agriculture, 6,330 DH in equipment, 4,516 DH at the DGSN and ... 3,527 in the Auxiliary Forces.
What is 3,000 DH today? Who can be content with that? How can a civil servant, whether in authority or not, live on such a low salary? Especially when we know that, in their vast majority (72%), civil servants head a household.It should be noted that in 2008, nearly 17% of civil servants received a net salary of 3,000 DH or less per month; 76% a net salary equal to or less than 6,000 DH and only 1.8% earn 15,000 DH and more (see table). In central administration - it is worse in local public service - there are civil servants who have not yet reached 15,000 DH per month after 30 years of service and despite holding an important position (head of division). A director at the Ministry of Equipment, for example, who manages a budget of 2 to 3 billion DH per year, earns 23,500 DH! With the responsibility that weighs on him, and in comparison with what the private sector can offer him, we cannot say that this senior civil servant is really pampered. Incidentally, during the preparation of the 2010 Finance Act, it had been considered to increase the salaries of directors and other secretaries general, but the idea was finally abandoned, according to union sources.
In the private sector, a young executive starts with a minimum of 5,000 DH
In fact, the level of remuneration in the public service does not seem to correspond - or very little - to the statutory situation of civil servants: in 2008, the management rate (scale 10 and above) in the state administration was 55%, compared to 45% in 2004 (see table). However, only 21% receive salaries of 7,000 DH and more.
Very clearly, the public service is not, or no longer, attractive. In the private sector, a young executive starts with a minimum of 5,000 DH, and even more in some sectors; and very quickly, he can double if not triple his salary, while a civil servant must wait years or even decades to hope to improve his situation.This problem, each time it is raised, raises the question of performance and the productivity of the administration. But how to measure it? The Ministry of Modernization of Public Sectors (MMSP) has implemented a reform in this direction, with the development of a rating system, but this does not seem to be unanimous. The unions, in particular, highlight the subjectivism of the hierarchical superior who, they say, risks altering its meaning!
But beyond the considerations linked to the productivity of civil servants, the problem that arises first, and which is already diagnosed, is that of the "obsolescence" of the general status of the public service and the specific statutes governing the remuneration of civil servants. As a result, on the one hand, a continuous increase in the wage bill (+23% between 2004 and 2008), and on the other hand, the eternal dissatisfaction of civil servants, whose salaries, particularly those at the lower levels, are quickly overtaken by inflation. "The losses of purchasing power are real and affect low-ranking civil servants more than their colleagues at higher levels, which exacerbates inequalities," writes the World Bank in a report on the subject. It estimates the loss of purchasing power at 1% for the high levels and 2.7% for the low levels.
The wage bill still represents 59% of operating expenditure in 2010
And yet! Between 2000 and 2007, 30 billion dirhams were injected in the form of salary increases, according to the count made by the MMSP: 16.4 billion in the form of generalized increases, 12 billion dedicated to exceptional promotions and 800 million dirhams for the reduction in income tax that took place in 2007.
Adding the 1.7 billion dirhams of direct increases (in two installments), which took place on July 1, 2008 and 2009, this makes nearly 32 billion dirhams, not including the repercussions of the reduction in income tax in 2009 (more than 1 billion for the public service out of a total of 4.9 billion) and those to come on January 1, 2010.
In total and in view of the statistical data, the public service is not as badly off as one might tend to believe: the wage bill for 2010, for example, up 5.3% compared to 2009, still represents 58.7% of the operating expenditure of the general budget (excluding debt, of course), 65% of goods and services expenditure, 40.2% of total expenditure of the general budget and 10.3% of GDP.The problem, clearly, lies elsewhere: it lies in the distribution of this significant envelope. The MMSP is obviously aware of this since it plans to put in place a new remuneration system that is "motivating, equitable and transparent", according to the terms of reference of the study it is currently having carried out on the subject. "The objective of the new system is to achieve salaries that remunerate the job actually held, taking into account the performance of civil servants in achieving the objectives defined beforehand," explains the MMSP. In the meantime, it's time for the unions' demands...
Focus: It's worse in the private sector..., according to the CNSS
If salaries in the public service are generally considered mediocre, in the private sector it is not much better - it is even worse for certain categories of workers. This is in any case what the figures from the National Social Security Fund (CNSS) suggest: 40% of declared salaries in the private sector are in the range of 1 to 1,845 DH per month; 76% in the range of 1 to 3,000 DH; 90% reach or are below 6,000 DH. In other words, only 10% of declared workers receive salaries above 6,000 DH. The average salary is 3,784 DH; almost half the average salary in the state administration. Of course, due to the under-declaration practiced by some employers, these figures should probably be nuanced. But whatever correction can be made, these statistics nevertheless underline, if not a reality, at least a fairly widespread trend. It is no coincidence that most employees, including in the public service, engage in parallel activities, as is practiced in Egypt where the daytime civil servant transforms into a taxi driver at night...
Salah Agueniou
Published on November 2, 2009
Posted online on November 5, 2009
lavieeco.com
In eight years, the state has injected an additional 30 billion DH into salaries, and in five years, the average salary in the public sector has increased by 23%.
After being reduced from 11.8% to 10.4% of GDP between 2004 and 2008, following the voluntary departure operation, the wage bill would represent 10.3% at the end of this year and would remain almost at the same level in 2010.
It's back to a new round of social dialogue. The government and unions resumed talks on Monday, October 26 as planned, but the meeting had to be "shortened" due to the Prime Minister's schedule. It was therefore rather "formal", according to the expression of a unionist. This meeting, which was attended by the UMT, the FDT, the UNMT and the UGT (the CDT being scheduled for the following day, October 27), was finally postponed to November 2. Given the demands of each party (see La Vie éco of October 23, 2009, www.lavieeco.com), the situation could be tense and the autumn rather hot! The unions prioritize the improvement of income (salaries and pensions) and will not change their minds. The government may well present figures demonstrating its efforts towards employees, but to no avail. The unions adhere to a seemingly simple equation: firstly, the improvements already granted are in fact a catch-up on what should have been done earlier, and secondly, the price increases, which they say are not reflected in the inflation rate, have already "cancelled" the effect of the decreed increases. Not to mention, they add, that the level of increases is not the same for everyone. "We are told about the reduction in income tax as an indirect increase in salaries. We forget that the bulk of the troops, those who receive low wages, are not concerned," fumes a unionist from the Democratic Federation of Labor (FDT).
Whether they like it or not, the issue of remuneration, almost consubstantial with the liberalization of the economy, will now be at the heart of social struggles. We will therefore have to deal with it, but the other question that arises simultaneously is to know what room for maneuver the government, and more generally the economy as a whole, still has to meet such a requirement.First, the government: can it do more than it has already done? Does it have the means? For the state public service alone, the wage bill will amount to 76.4 billion dirhams in 2009, it will increase to 80.5 billion in 2010, for nearly 800,000 civil servants (including the 23,000 recruitments planned for 2010).
After being reduced from 11.8% to 10.4% of GDP between 2004 and 2008, following the voluntary departure operation which allowed the reduction of the public sector workforce by 40,000 people, but above all to the increase in gross domestic product (GDP), the wage bill would represent 10.3% at the end of this year and would remain almost at the same level in 2010. This is still a lot, some will judge, sustainable others will estimate.
7,150 DH, this is the average salary in the administration, a director earns 23,500 DH
Another argument in favor of the state, according to the statistics of the General Treasury of the Kingdom (TGR) compiled at the end of 2008, the average salary in the public service increased by 23% in five years (2004-2008), going from 5,800 DH to 7,150 DH, i.e. an average annual increase of 4.6%. Presented in this way, this evolution is well above the inflation rate (an average of 2%). With the improvement resulting from the reduction in income tax (IR) in 2009 and then in 2010 and the second installment of the salary increase that took place in July 2009, the average remuneration is undoubtedly a little higher. With the two reductions in income tax and the increases that came into effect on July 1, 2008 and 2009 alone, approximately 11 billion dirhams are injected into salaries (public and private) in two years.
The problem is that reasoning by average gives a rather imperfect view of reality. And this is even more true in a context where salary differences, as in the public service, are significant (a ratio of 1 to 30 according to the unions, 1 to 26 according to the Ministry of Modernization of Public Sectors). For example, in the administration of justice, the average salary is 7,662 DH, 7,030 DH in agriculture, 6,330 DH in equipment, 4,516 DH at the DGSN and ... 3,527 in the Auxiliary Forces.
What is 3,000 DH today? Who can be content with that? How can a civil servant, whether in authority or not, live on such a low salary? Especially when we know that, in their vast majority (72%), civil servants head a household.It should be noted that in 2008, nearly 17% of civil servants received a net salary of 3,000 DH or less per month; 76% a net salary equal to or less than 6,000 DH and only 1.8% earn 15,000 DH and more (see table). In central administration - it is worse in local public service - there are civil servants who have not yet reached 15,000 DH per month after 30 years of service and despite holding an important position (head of division). A director at the Ministry of Equipment, for example, who manages a budget of 2 to 3 billion DH per year, earns 23,500 DH! With the responsibility that weighs on him, and in comparison with what the private sector can offer him, we cannot say that this senior civil servant is really pampered. Incidentally, during the preparation of the 2010 Finance Act, it had been considered to increase the salaries of directors and other secretaries general, but the idea was finally abandoned, according to union sources.
In the private sector, a young executive starts with a minimum of 5,000 DH
In fact, the level of remuneration in the public service does not seem to correspond - or very little - to the statutory situation of civil servants: in 2008, the management rate (scale 10 and above) in the state administration was 55%, compared to 45% in 2004 (see table). However, only 21% receive salaries of 7,000 DH and more.
Very clearly, the public service is not, or no longer, attractive. In the private sector, a young executive starts with a minimum of 5,000 DH, and even more in some sectors; and very quickly, he can double if not triple his salary, while a civil servant must wait years or even decades to hope to improve his situation.This problem, each time it is raised, raises the question of performance and the productivity of the administration. But how to measure it? The Ministry of Modernization of Public Sectors (MMSP) has implemented a reform in this direction, with the development of a rating system, but this does not seem to be unanimous. The unions, in particular, highlight the subjectivism of the hierarchical superior who, they say, risks altering its meaning!
But beyond the considerations linked to the productivity of civil servants, the problem that arises first, and which is already diagnosed, is that of the "obsolescence" of the general status of the public service and the specific statutes governing the remuneration of civil servants. As a result, on the one hand, a continuous increase in the wage bill (+23% between 2004 and 2008), and on the other hand, the eternal dissatisfaction of civil servants, whose salaries, particularly those at the lower levels, are quickly overtaken by inflation. "The losses of purchasing power are real and affect low-ranking civil servants more than their colleagues at higher levels, which exacerbates inequalities," writes the World Bank in a report on the subject. It estimates the loss of purchasing power at 1% for the high levels and 2.7% for the low levels.
The wage bill still represents 59% of operating expenditure in 2010
And yet! Between 2000 and 2007, 30 billion dirhams were injected in the form of salary increases, according to the count made by the MMSP: 16.4 billion in the form of generalized increases, 12 billion dedicated to exceptional promotions and 800 million dirhams for the reduction in income tax that took place in 2007.
Adding the 1.7 billion dirhams of direct increases (in two installments), which took place on July 1, 2008 and 2009, this makes nearly 32 billion dirhams, not including the repercussions of the reduction in income tax in 2009 (more than 1 billion for the public service out of a total of 4.9 billion) and those to come on January 1, 2010.
In total and in view of the statistical data, the public service is not as badly off as one might tend to believe: the wage bill for 2010, for example, up 5.3% compared to 2009, still represents 58.7% of the operating expenditure of the general budget (excluding debt, of course), 65% of goods and services expenditure, 40.2% of total expenditure of the general budget and 10.3% of GDP.The problem, clearly, lies elsewhere: it lies in the distribution of this significant envelope. The MMSP is obviously aware of this since it plans to put in place a new remuneration system that is "motivating, equitable and transparent", according to the terms of reference of the study it is currently having carried out on the subject. "The objective of the new system is to achieve salaries that remunerate the job actually held, taking into account the performance of civil servants in achieving the objectives defined beforehand," explains the MMSP. In the meantime, it's time for the unions' demands...
Focus: It's worse in the private sector..., according to the CNSS
If salaries in the public service are generally considered mediocre, in the private sector it is not much better - it is even worse for certain categories of workers. This is in any case what the figures from the National Social Security Fund (CNSS) suggest: 40% of declared salaries in the private sector are in the range of 1 to 1,845 DH per month; 76% in the range of 1 to 3,000 DH; 90% reach or are below 6,000 DH. In other words, only 10% of declared workers receive salaries above 6,000 DH. The average salary is 3,784 DH; almost half the average salary in the state administration. Of course, due to the under-declaration practiced by some employers, these figures should probably be nuanced. But whatever correction can be made, these statistics nevertheless underline, if not a reality, at least a fairly widespread trend. It is no coincidence that most employees, including in the public service, engage in parallel activities, as is practiced in Egypt where the daytime civil servant transforms into a taxi driver at night...
Salah Agueniou
Published on November 2, 2009
Posted online on November 5, 2009
lavieeco.com
