Inflation Widens the Gap between Public and Private Sector Wages

Inflation Widens the Gap between Public and Private Sector Wages

Enab Baladi Enab Baladi
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Srija market in Damascus, 14 January (taken by a young man from Damascus)

Wages for private sector workers in Syria, whether in the formal or informal sectors (self-employed), have witnessed an increase over the last year. Private sector wages have now reached twice those in the public sector, where the average salary is 35,000 lira.

There are many reasons behind this big gap between the public, private and self-employed sectors in light of the sharp economic downturn Syria has faced in recent years, leading to rising inflation and prices.

Due to the inability of public sector employees to secure their basic needs, many of them have resorted to working in the private sector and to become self-employed in order to have an additional income that helps them cope with the wave of rising inflation.

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Fadi Assaf, an employee from Damascus, was not able to provide for the needs of his wife and three kids from his public sector salary, which does not exceed 35,000 lira a month. This forced him to take on an extra job working in a shop to obtain additional income.

Assaf told Enab Baladi that he worked in an oriental decoration shop after his ordinary work shift. In this job, he gets paid 250 lira per hour, which is 35,000 lira a month – the same as his governmental salary but working fewer hours. This was before he was forced to leave his public sector job when he had to choose between joining the “Fifth Division” that the Syrian regime decided to establish or resigning.

Mohammed Suleiman, a refugee living in Turkey, is thinking of returning to his old job in a shop in Barzeh in Damascus, where he used to earn 50,000 lira a month.

Suleiman, who is 37 years old, explained to Enab Baladi that beside the fact that he is not subject to any legal restrictions and has not been called up for military service, one of the reasons that led him to think of returning is that the shop owner has offered him a salary of 70,000 lira to manage the shop and its financial affairs.

As for large private companies, an employee in MABCO Damascus (who refused to reveal his name) told Enab Baladi that employees’ salaries in the company start at 50,000 lira for new employees and vary according to the nature of the work and the years spent at the company. Salaries can reach up to 75,000 lira, with the exception of managers.

Selection of Employees in the Private Sector

The reasons behind the wage gap between different sectors were explained by a journalist and economic expert in Damascus, who refused to disclose his name. He told Enab Baladi that the private sector is based on the principle of employee recruitment based on real qualifications and not through nepotism. The private sector is also based on the principle of productivity – unlike the public sector, the more productive the work, the higher the salaries.

Soqrat al-Ilou, an economic researcher, attributed the gap to the fact that “salaries are paid from one source in the public sector, which used to absorb all graduates. Thus, if the number of employees is higher, the same budget will be divided between a larger number, which means they salaries will be lower when employing a larger number. This is according to the concept of socialism.”

In an interview with Enab Baladi, al-Ilou said, “Salaries in the private sector are higher because the productivity of employees is higher, since they are specialized and experienced, which makes revenues higher. The private sector in Syria treats employees as resources – the better the resource, the higher the profits.”

Inflation and Shortage of Youth

Al-Ilou attributed the high salaries in the self-employed professions to the high rate of inflation, which reached 651% last year, according to the Central Bureau for Statistics. He added, “Employers who need specialized employees and shop owners have raised the wages and salaries of their employees since they increased their prices according to the same inflation rate”. Moreover, emigration by young people has led to a shortage of experienced workers.

The economic journalist from Damascus asserted that the shortage of youth has led to a decrease in the number of workers in factories and shops. This has encouraged workers, especially those who are exempt from compulsory and reserve services, to demand higher salaries, knowing that their employer needs them.

The journalist noted that workers’ salaries in the self-employed sector have increased remarkably recently, reaching more than 100,000 lira as a result of inflation, which has had a big impact.

“It is natural that wages are higher, due to the high revenues of businesses and the increase in revenues”, he added. “For example, one kilogram of potatoes used to cost 35 lira, now it costs 350 lira. Grocers make total daily sales ranging between 100,000 and 200,000 lira a day. Therefore, a salary of 70,000 lira is equivalent to 7000 lira before the revolution.”

In light of these differences between wages in the private and public sectors, the Syrian regime remains powerless to take any measures to improve the situation of its employees, increase salaries or raise the value of the Syrian lira against the dollar and decrease prices, especially with the ongoing brain drain and emigration of skilled Syrian youth abroad. This threatens to lead to real disruption and total paralysis of state institutions.

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