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Kenya is sliding towards a recurrent costs crisis and taxpayers will suffer

Tuesday September 25 2012



I don’t agree with those who view the recent strikes as reflecting a return of worker militancy in the public sector.

Yes, union leaders still belted out their anthem, Solidarity Forever. But if you looked at their faces and studied their demeanour, what you saw and heard was not militancy per se.

It was a wail of frustration — a plea for sympathy by public sector workers who strongly feel that the government has been discriminating against them for a long time.

These strikes are more about inequalities and disparities in public sector wages than anything else.

The front page story by the Sunday Nation two weeks ago which exploded, bang in the middle of the strike, was spot-on. It highlighted the factors underlying the upsurge of strikes in the public sector.

Indeed, the stand taken by the government revealed a story of contradictions. In one breath, it told the teachers and lecturers that it had no cash, and in the other, it committed itself to paying permanent secretaries huge salaries and allowances.

It was ironic, indeed, that the newspaper report came even as the government had resorted to employing hostile tactics — declaring that the demands by the union were unreasonable, threatening to sack teachers, and rushing to court to have the strikes declared illegal.

Clearly, grievances over inequalities in public sector wages and salaries run deep. The grievances are fed every other day by newspaper articles on frequent raises in salaries and allowances for MPs, big perks for members of constitutional commissions, and even huger salaries to PSs and judges.

The disclosures about corruption in government, tenderpreneurship and wasteful spending by ministries have served to entrench these feelings of discrimination and alienation within the civil service.

That is why, when you tell teachers, lecturers, and doctors that you have no money to pay them, they won’t believe you.

 As a start, the government should announce a moratorium on salary increases in the upper echelons of the civil service bureaucracy. And, going forward, we should align the period for wage negotiation within the budget cycle.

In that way, the Treasury will not approach negotiations with the inflexibility it has displayed during the just-concluded negotiations. Ideally, future negotiations should include a commitment to enhanced and measurable productivity.

In this situation, the teachers and lecturers left with the attitude that what they are being paid is a God-given entitlement, for they were not made to sign a commitment to better productivity.

I have a suggestion for the unions. You need to invest in capacity that will allow you to engage the government on broader policy issues, beyond narrow workplace grievances.

The unions need to realise that the biggest threat to their influence is not whether or not they succeed in negotiating better salaries. It is unemployment and the rapidly expanding informal sector.

As a union, you have no future when your numbers keep dwindling due to the dearth of formal sector jobs. In future, what is going to matter most is your ability to understand and influence broader policy issues.

I want to see these public sector unions coming up with pro-growth strategies. I want to see well-researched position papers on improving social protection for households.

I want unions with the capacity to understand and appreciate the macro-economic effects of high public sector wages, for the truth is that we are entering dangerous territory as regards wage bill size.

Consider the following statistics. Even before the new salary awards, we were at a point where the wage bill for the core civil service averaged around 10 per cent of the GDP.

In simple terms, 10 per cent of the value of all the wealth produced is spent on consumption, not on development. Kenya is slowly sliding towards a crippling recurrent costs financing crisis.

According to the current economic survey, public sector wages have converged or even overtaken those in the private sector. We must confront these issues.