2024-04-11 16:00:53
Cutting collective contracts, eliminating non-essential positions and outsourcing administration are more efficient measures than the fight against “golden salaries.” The Attorney General should earn less with the Government’s measure.
He Government of Daniel Noboa has announced an “all-out fight” against the so-called “golden salaries.” The Minister of Labor, Ivonne Núñez, issued a statement two weeks ago ministerial agreement to ensure that no public official earns more than the President of the Republic’s $5,072 per month.
Rodrigo López, teacher and member of the School of Economics of the University San Francisco de Quito (USFQ), considered that the government announcement should be read in an electoral key.
“Political scientists refer to the concept of empty signifier, which is basically an advertisement with impact; but without real effects. If what the minister says were strictly applied, the salaries of officials like the fiscal general, who earns $5,500; to the generalwho earn up to $5,300 and judges, in the middle of the internal armed conflict”, he pointed out.
The Minister of Labor even said that they have determined that some 50,000 public workers They earn more than the president and that, by putting a limit on this (that is, lowering certain salaries), they could save $20 million a month or more than $200 million a year.
“It is very difficult to achieve these savings. Politically and electorally it sounds good that no one wins more than the president. There is a clamor for the State to reduce expenses; but, at the same time, you are condemning the public administration to the fact that, in positions of high responsibility, the best professionals do not arrive,” López said.
It is true that public salaries cost more than $10 billion a year, according to the Budget State General (PGE) from 2024; but beyond the crusade against thegolden salaries”, the underlying solutions to optimize this expense go through other means.
Reduce non-essential positions
Almost a month and a half ago, the USFQ determined that 30% of the public payroll can be reduced in non-essential positions, through eliminating items, buying resignations, separating occasional contractsdeclare some institutions in restructuring and dispense with the provisional appointments.
All this would generate savings of $442.7 million per year without affecting police, military, educators, doctors, nurses and health professionals.
The problem is that the country is immersed in an electoral cycle that makes these measures, which always have a political costleave them in the freezer.
However, with optimization of this type, many more resources can be obtained than with measures such as salary reductions.
Abuses in collective contracts
Before “golden salaries”, efforts must be directed towards an in-depth analysis of the costs and conditions of workers. collective contractsespecially in public companies, but also in ministries.
Through these contracts, benefits have been established in the public sector that no private sector worker has, explained Carlos Andrade, economist and business consultant.
While the real implications of collective contracts are made transparent and analyzed, measures should be taken to avoid further damages to the State.
Firstly, establish a moratorium on the negotiation of collective contracts, that is, not sign a single more collective contract in the public administration until it is defined what is going to happen with this type of mechanism.
Secondly, the incorporation of new staff to existing collective contracts.
The country must be clear about how much collective contracts really cost it and from there take corrective measures and even think about its disappearance from the public sector.
López stressed that collective contracts are based on an error of concept in the Ecuadorian public sector.
“Collective contracts arise as a defense for the worker when the employer wants to abuse. But, in the public sector, the negotiation is with a State that guarantees rights that is not going to go to the detriment of its own workers and does not seek capital gains, but social gains,” explained the USFQ economist.
Currently, we see collective contracts such as those of Petroecuador o Whole (Corporación Eléctrica del Ecuador), where job stability of between 5 to 7 years is assured, among other benefits such as excessive bonuses, which go against all economic efficiency.
Delegate administration
Another measure, which would be more effective than the fight against “golden salaries”, would be the outsourcing o administration concession of public companies and other dependencies, such as Ecuadorian Institute of Social Security (IESS).
The State has demonstrated that it is a poor administrator of public resources, so it can be delegated to private companies to manage, without reaching privatization, which is constitutionally vetoed in the so-called strategic sectors.
Thus, for example, in the oil sector, the Minister of Energy can continue to dictate macro policies; but a private person would be in charge of the operational, strategic and commercial part of a company like Petroecuador; including the establishment of competitive salaries.
At the same time, the elimination of bureaucratic processes and procedures that, in many cases, only exist to justify the presence of public officials must be carried out.
If these two measures are taken together, it would be possible to have companies with real incentives to generate profits and less burden for the public sector. (J.S.)
Gaps in the public sector
-The collective contract for 5,300 employees of the National Electricity Corporation (CNEL) left a equity gap of $821 million in this institution. This is one of the examples of the negative impact of excessive collective contracts.
– In 2023, in response to questions about the profile of the last managers appointed to Petroecuador, the former Minister of Energy, Fernando Santos Alvite, said that the salary of Petroecuador manager is not enough “not even for cigarettes”, so no person with extensive professional experience wants to accept this position.
This is in relation to the fact that the $6,210 per month paid does not justify the responsibilities of managing a company with more than $20,000 million in assets.
-In the public sector there are several labor regimes: The Labor Code (those who earn the least); Organic Law of Public Service; public companies law; Even local governments have their own rules.