Online Reporter
FROM being one of the less desirable employers, the Government has now moved into the higher ranks of league tables, and most importantly has ensured that all civil servants, from cleaners and people who make the tea upwards to permanent secretaries, earn above the poverty datum line.
This was a major achievement, yet to be matched by a large swathe of the private sector, and has a lasting effect, with the victory over inflation ensuring that civil servants, along with all other Zimbabweans, can keep what the earn rather than see it rapidly erode as prices rise.
As was discussed in the presentation in Parliament at the end of last year of the present national budget, part of the unallocated reserve in that budget is earmarked for funding any increases.
At the same time the warning was given that this reserve was a prudent measure to ensure that in an emergency, such as a health pandemic or a cyclone, immediate funds could be mobilised, so the reserve has to cover a lot more ground than just paying civil servants some more money.
Since then, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has been a little firmer, saying the increases that are probable in the next round of negotiations are likely to be on the lower side. At the same time, with no pressure for emergency measures on pay, the opportunity is being taken for a better job evaluation for State service.
With annual inflation below 5 percent and almost certain to remain in the lower and middle levels of single figures, almost any increment will be a real increase rather than just the cost-of-living adjustment civil servants, and for that matter those in the private sector, have become used to. This allows the Government to both increase real incomes, even if only modestly in some cases, and fund necessary grading changes following job evaluation. No one needs to be left behind.
The low annual inflation means that even a very modest rise in pay leads to an increased standard of living, rather than trying to catch up with inflation. Most Zimbabweans have never, at least as adults, lived in low inflation environment; even the older people have to cast their memories back about 30 years or more to remember what that entails.
It also means that all employers have to be careful that they do not make mistakes. Overpaying in one cost-of living adjustment in times of high inflation, that is paying more than an entity’s income inflows could afford without a complete operational overhaul, could be fixed by a lower increment in a few months. Now everyone in pay talks needs to be looking at income, value for money, what sort of overhaul is needed, and the other important ingredients of higher living standards, rather than having to work out how to survive seriously severe inflation.
There are some horrific private sector examples already in place, where an over-large and probably overpaid managerial team did not reassess their business models as inflation fell, even when the monthly figures gave quite a lot of warning of the need for change. If the Government makes the same mistake then we move, once again, to the cliff edge.
As real incomes rise, we move closer to the point where we reach that upper middle-income economy that is our next target. The progress is pretty well assured, but the pace needs to be set carefully so we do not blow the ship out of the water before we reach that particular port. Everyone is a bit impatient; that is to be expected. But we have to make sure we are moving in calmer waters.
Besides getting the bottom rung of the ladder above the poverty datum line, and that is a major example to the rest of the economy including the private sector, the Government continues to set another example of moderating the gap between what those on the bottom and those on the top step are paid.
Obviously the top ranks of the civil service earn more than those on the lower rungs, but even a permanent secretary does not earn that large a multiple of the pay of, say, a skilled worker. And the multiple is rational.
In parts of the private sector the multiple is a lot higher, at least over the last few decades, as damaging trends grown in parts of Europe and the US moved to the rest of the world.
Often hired managers argued that the pay for their job should be equal to what a really smart person setting up their own business and accepting all the contingent risks was earning after half a lifetime of growing that business, and dividends from profits seriously exceeding their managerial pay.
Job evaluations can fairly accurately measure just what a person contributes and so provide a basis for pay, but those, civil servants or others, who want to make what they see as “real money” can move out and set up their own business, in competition with some really hungry and very able young people clutching a good idea. Running a going concern successfully should earn a decent reward, but not sort of multiples some think is normal.
So the Government should be praised for lifting the bottom rung of its civil service ladder above the dark waters of the poverty datum line, and for rational and progressive improvements in pay as another rung is reached.
The objective is now to keep lifting that ladder bit by bit as the economy grows, possible with low inflation, so that civil servants are not left behind again.
