Government’s harmonization process has affected 66,538 employees from various ministries, agencies and local authorities.
Del-Francis Wreh, executive director for Macroeconomic Policy Analysis Center at the Ministry of Finance and Development Planning (MFDP), made the disclosure on Thursday, September 12, 2019 at the Ministry of Information regular press briefing in Monrovia.
Wreh told the gathering that about 56,538 of government employees, which constitute 85 percent, were protected from any reduction in their salary.
Harmonization, which the government recently introduced to the chagrin of the country’s workforce, is the process through which salaries of employees with the same position are fully or partially matched to minimize salary disparity.
With this definition in mind, Mr. Wreh said the government’s harmonization of employees’ pay is to create equality in the pay system across every sector by reducing or eliminating the huge salary disparity that currently exists, mainly as the result of discretionary assignments and payments of general allowances in every ministry and agency of government.
Wreh said that the harmonization pay grade is different from the previous Civil Servant Agency (CSA) grading system, because basic salaries and allowances were consolidated before determining the pay for each level of employment, and it provides grading for all employees of government, including presidential appointees, elected officials among them, teachers, health workers and security personnel.
As for the wage bill harmonization, Wreh said it is part of the government’s short, medium and long-term strategy to reduce the public sector wage bill to an affordable level of around 40 percent of domestic revenue and 5-6 percent of the country’s Gross Product Domestic (GPD).
Mr. Wreh said the process will generate savings from government’s payroll, and grade established for the position any of the employees currently occupied that can be used for two purposes; to partially top-up the pay of those, who are currently earning below their current pay grade and increase the government’s expenditure on goods and services, which are designed to increase services to the population.
He said a different pay scale was developed and used to properly and fairly grade all employees of government, adding that the new single payment will be denominated in the United States Dollars (USD), but there will be 65 percent payment raised in the USD component of every employee and 35 percent payment in Liberian Dollars.
According to Wreh, besides assigning pay grades to all employees, the harmonization exercise has reduced government’s wage bill from US$322 million at the end FY 2018/2019 to US$297 million.
“The government will use the savings for additional payroll cleanup measures, funding from extra revenue measures to systematically adjust employees’ earning below their assessed pay grade over two to four years,” he said.
He said during a general pay cut exercise, no one is protected, “unlike the targeted pay cut that provides exemptions based on a specific set of criteria.”
Wreh said 14,900 employees received an immediate pay rise in salaries to include teachers, nurses and security in addition to the central government ensuring full payment of the payroll for employees at the Liberia Broadcasting System and the National Transit Authority for FY 2019/2020.
He said 10,200 employees affected by downward salary adjustment represent 15 percent of the total graded employees and include presidential appointees.
Mr. Wreh said 27 percent of the protected employees will also get an immediate monthly pay increase beginning July 2019 to include personnel at the Liberia National Fire Service, Liberia Drugs Enforcement Agency, Liberia Immigration Service with US$50; Liberia National Police, US$36; the Armed Forces of Liberia, US$30; additional US$15 monthly for each Probation and Correction Officer; 3,500 teachers currently earning between US$40-75, while those on supplementary payroll will now earn US$100.
He added, “Under the current structure, the top 1 percent earned about 13.3 percent of the total wage bill with monthly median pay at US$3,571, while the bottom 20 percent earned only 4.6 percent with monthly median at just US$125. Under the harmonization system, the top 1 percent share of the wage bill will be reduced to 9.8 percent from 13.3 percent, while the bottom 20 percent increased from 4.6 percent to 8.1 percent with monthly median pay to increase from US$125 to US$225.”
“Through harmonization and downward adjustment beginning July 2019, the wage bill of the top 1 percent will reduce to US$12.7 percent from US$13.3 with median pay reduced to US$3,214 from US$3,571,” he said.