The Salary Increase Fiasco Explained

To the layperson like me, watching the news about the planned wage hikes and the resulting back-and-forth between concerned parties would make you confused and come to the conclusion that either the minister is being childish, the employers are scheming and the workers don’t know what’s best for them.

Today, I had the chance to sit with one of the 12 members of the General Labor Union council (Ittihad 3ommalli 3am), and its representative in the Lebanese Labor Court (ma7akem el 3amal) and discuss this issue in-depth with people immediately concerned with this whole matter. Here’s what I managed to get

What was the problem exactly?

In 1995, labor unions demanded reimbursement for transportation (badal el na2el) seeing how affordable public transportation was practically non-existent in Lebanon. Back then, a measly 2,000 LBP was sanctioned by the cabinet for every day you showed up at work. This means that this reimbursement wasn’t given when you missed work or off, and was not included in your retirement salary’s plan.

Minister of Labor Charble Nahhas considers this work-around as illegal, and wants to include transportation fees and scholarship fees into the bulk of the salary. This would amount to 200,000 LBP added to each salary. Which means that employers would pay 200,000 LBP + 21.5% for welfare and retirement funds. Meaning more than 242,000 LBP in extra fees (apart from a wage hike).

This is of course massive news for workers, and given Charbel Nahhas’ Communist background, his unwavering, yet illogical clinging to his stance is understandable. However, looking at things objectively makes us realize that a wage hike + the 242,000LBP would mean that businesses would have to fire people to cope, since the economy isn’t at it’s finest. That is why, some might be puzzled at this, but the workers were against including the 242,000 LBP into their salaries. A tough, but pragmatic compromise I think.

Another problem was the 200,000 LBP lumpsum increase in 2008 by PM Fouad Siniora’s government back then. Technically, it was illegal. So, a legal work-around was created to compensate for it, and here’s what it looks like:

Let’s suppose your salary is 800,000 LBP, here’s what happens with the passed cabinet bill

100% increase for the first 400,000 LBP plus a 9% increase for the second 400,000 LBP, minus the 200,000 LBP of 2008 = Your New Salary

(800K + 400K + 36K) – 200K = 1,036,000 LBP

 So, this silly example of mathematical gymnastics makes things legal and was passed by the cabinet and approved by the Shoora Council.

Why did the Shoora Council intervene?

We rarely hear of the Shoora Council intervening. That’s because its opinion is non-binding when concernend parties are in agreement. However, when concerned parties are at odds, the Shoora Council verdict becomes legally binding.

What happened to the transportation reimbursement?

It will remain at 8,000 LBP per working day you show up. What’s unfair is that it is not according to how far you live. So, while one might live within walking distance of his/her place of employment and takes the 8,000 LBP as extra revenue, someone who lives three “services” away will be paying from their salary to be able to get to work. This is another problem with the badal na2el which would be cool to solve.

Why didn’t they just subsidize fuel instead?

That was something I asked myself, and apparently the labor unions demanded this instead of the wage hike. Even though this might solve the whole problem, and include all the Lebanese instead of just the 40% on the payroll (not self-employed or part-timers, ie the ones this law affects).

The reason is a sinister one, but unfortunately true. Fuel is a lot of money, and direct money for the government. By direct, it means you pay, you get. Unlike electricity for example, which you could use up and not pay for. Everyone in Lebanon pays for fuel too, so compromising this vital lifeline for the government’s coffers is unthinkable, unfortunately for us.

Why did prices inflate 4 times and the salary just once?

Because the oligopolies that control so many products and services are unfair and mafia-like. The way to fix this is via the Ministry of Economy’s customer protection agency (7imayat al mustahlek). Unfortunately, the corruptness and under-funding of this sector makes it virtually useless. But, if you’re a business and buy in bulk, call them up and complain… Who knows, perhaps it will fall on ears that listen and act!

Also, interesting fact: the municipality and its police officers have the authority to inspect food quality and prices in their jurisdiction, and take the necessary measures which could be anything from a fine to closing down the guilty establishment and legal prosecution.

Conclusion?

This is just too messed up.

Comments

  1. Roger says

    Interesting that this post was made before the one about Beirut having a comedy club, and the latter got a good number of readers’ feedback and comments whereas this post got nothing so far! Looks like most of us Lebanese actually prefer escape (through laughter and other fun means) and run away from dealing with serious matters.

    Thanks for the post

  2. says

    no matter what they do, as long as there are selfish people in the government, not paying attention to the increase in prices, lebanon will never become a decent self respected country. let its own people respect their country first!

  3. says

    Hi, First time i discover your blog, nice job. However, a small correction if i may. Charbel Nahas does not have a communist background, unless it is the same propaganda in lebanon labeling people using shortcuts. Nahas, like my case, lived in paris, researched in paris, and is influenced by european politics. Principles of New Public Management (NPM for some) are far from communist ideologies, and are adopted by the world’s most liberal countries in the world (USA, Sweden, Germany…). We have to get used to speaking about the public sector, without being labeled a marxist. Second point, it is fundamentally illegal to dissociate the transportation costs from the bulk of the salary, easy, ILO international law, in an international court, Lebanon will be indicted and really really bad. Keep on the good work

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