Rationalising wages

By Joseph Bossa

Equitably distributing the nation’s resources is a moral and political imperative for the government

In an on Sept. 16 on the Sunday Monitor, Henry Ssekaalo, the first Ugandan professor of Chemistry at Makerere University was perplexed that professors take home a maximum of Shs 3 million which is hardly 10% of what the Kampala Capital City Authority Executive Director earns, and 20% of the earning of a Ugandan MP. He noted that 10 years ago Vice Chancellors in the top Universities in UK were earning about 200,000 pounds a year when Tony Blair, their Prime minister then, was earning 184,000 pounds.

Well, the logic of wages the world over is not always easy to rationalise.

There are broadly three categories of wages and three categories of wage earners. Some wages are imposed, some are negotiated and others are self-determined. Some wage earners work in the public sector, and are paid out of public coffers, some are private sector workers, paid by individuals or private companies, and then there are those who are self-employed.

Imposed wages are like those of civil which fall under formal structures outside of which an individual employee cannot negotiate. Free contractors working on their account negotiate their wages. Self-determined wages are like those of people who are self-employed and, curiously, include Uganda’s members of Parliament.

Let’s begin by looking at public sector imposed wages. At one time in the civil service an accountant earned more than a book keeper, a civil engineer earned more than a road supervisor and a doctor took home in wages more than a dispenser. People with similar job descriptions earned the same wage and everybody knew it. Not anymore.

There are now such disparities in remuneration between and among those employed in the public sector or service. By public sector we include the traditional civil services at central and local government levels, the state corporations (also known parastatal companies), commissions, boards and bureaux. They are called so because their capital is entirely contributed to by the government and their profits, if any, go to the government.

In 1960s it was known that Uganda Development Corporation and Uganda Electricity Board paid better than the civil service. But the differences in wages were not so pronounced as is the case with today’s parastatals. Worse still, today even within the same ministry people at similar rank earn differently. There are even cases where those in lower ranks take home better packages than their supervisors above them.

What brought about this apparently chaotic situation and how does it affect overall performance in the ministries?

Several factors are at play. With regard to intra-ministry wage disparities, the 1990s saw the introduction of “projects” from the World Bank, World Health Organisation, and Sovereign States and other bodies outside government. Officers assigned to implement these projects earn special allowances from these projects which are higher than their normal wages in some instances and which put them, salary-wise, above their peers, if not their supervisors. During about the same period, the World Bank instituted a scheme to pay an allowance to Ugandan professionals in the diaspora to encourage them to return and serve back in Uganda. All these special allowance disrupted the wage structure in the civil service.

What this does or did to overall working morale and the machinations that go with it do not require a fertile mind to imagine. Later we shall suggest how these allowances should or could have been dealt with.

Broadly speaking, what are the factors which determine wages for different professions, trades and other callings in a modern economy, including Uganda’s?

Is it the period it takes to acquire the skill? Is it the available number of workers in the particular field? Is it the degree of hazards the performance of the task involves? Is it the immediate financial benefits which flow from the tasks one performs? Why, for instance, do some employees of Uganda Revenue Authority earn considerably higher wages than the professors at University who taught them?

In the private sector, why do domestic workers most of whom are on duty 24 hours a day 7 days a week and who often combine roles of house keeper, child minder, tutor and security guard earn such a pittance?

We will be presumptuous and attempt to answer some of those questions. The rest I will leave for others to answer. That there will always be differences in the sharing of benefits in this world is a given. Neither the communist formula of “To each according to his needs and from each according to his abilities” nor, thanks to Ananias and Sapphira his wife,  the attempt by the early Christians to pool all their property together and share everything in common, has ever worked out in the real world.

An inexplicable mix of factors determines the wage structure of a particular country. In the traditional civil service the length and complexity (quite subjective) of the course used to determine the scale and therefore the pay of the worker. Accordingly the professionals e.g.; doctors, lawyers and engineers had a different pay scale from the non-professionals e.g. social scientists. The downside was that as they progressed the social scientist had better chances of getting promoted in to the higher paying ranks of, say, commissioner and permanent secretary.

Availability of workers in the particular field, especially a new one, is an important factor. We remember a time when computers were coming to Uganda as a work tool and computer savvy employees earned a premium for that skill. Therefore, as we go about setting the wages in the public sector we need to recognise that Uganda is not a barricaded island. We cannot afford to set wages far below those of our neighboring countries for similar jobs. In other words, Ugandan wages have to be competitive or the workers will move elsewhere. This partly explains the cause of brain drain.

The degree of responsibility and high cost of mistakes are also factors. A pilot in control of a US$300 million aircraft with 350 lives on board must be adequately remunerated to reflect that responsibility.

Is it the skill of the job? Not really. It is said that few jobs require as much skill and dedication as making musical instruments. But the reality is semi-skilled workers on motor assembly lines earn far higher wages than music instruments workers. In the same spirit a musical instrument maker who cuts a hole in the wrong place ruins a piece of wood while a worker at an aircraft plant who plugged some wires into the wrong hole may lead to the loss of a multi-million aircraft and the loss of hundreds of lives.

Although it may not be possible to fully rationalise the wage structure that should not be reason enough for the government to abandon any attempt at harmonising pay; at least in the public sector.

Let’s begin with the small matter of allowances. These allowances should be treated like tips. Some high end restaurants have an interesting approach to tips. Normally, tips are given by customers to that waiter or waitress who served them in appreciation of the service. But a good meal takes more than a waiter. It includes the chefs and bar tenders who are out of view and never come into contact with the customers. The practice in those restaurants is to put all the money given as tips into a common pool and share out the money among all the workers, including the doorman, at the end of the day. Those project allowances should be shared out by the workers in the department on a proportionate basis.

With regard to the wages of workers in public corporations, we see the same disparities. But why should workers in various corporations differ substantially? Should the fact that some corporations like the Civil Aviation Authority generate income while others which are purely regulatory may not do so and barely earn enough to meet their running costs be justification for the wages differences?

We propose that a body, equivalent to the Public Service Commission, be established to handle matters concerning Public Corporations including pay for political leaders. This should also be responsible for setting and harmonising the terms and conditions of service of workers in these state corporations.

Presently, the government has abandoned the workers outside public service. They are on their own. The trade unions have been weakened or are severely controlled. The Industrial Court is no more. The employer is king and will determine workers’ wages on a take-it-or leave it basis.

We propose that a law be enacted to re-instate minimum wages to apply to each industry or sector and which should be reviewed periodically. The Industrial Court should also be rejuvenated to arbitrate in disputes between workers and their employers.

Ultimately the economic growth of the country depends on the quality, productivity and motivation of its workers.  The government cannot forever run away from its responsibility to forge a more equitable distribution of the nation’s resources. It is both a moral and political imperative.

Prof. Joseph Bossa is the Vice President of the Uganda Peoples Congress