POLITICS-ARGENTINA: Govt Tackles Public Sectors Huge Wage Gaps

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, May 23 2000 (IPS) - û The cash-starved government put the public payroll under the magnifying glass after the systems disparities were recently revealed in a legislators public declaration of income, which showed 10,000 dollars in monthly earnings for serving in Parliament and just 300 for teaching as a university professor.

The president and vice-president receive less than 5,000 dollars per month, but government ministers take in nearly 10,000, and there are enormous differences in the paychecks of senators and deputies û at both the national and provincial levels. There are some who earn 3,000 dollars per month, while others get 27,000, even in provinces where half the population lives in extreme poverty.

According to an Economy Ministry report, Argentinas legislators earn an average of 655,000 dollars per year, compared to the 360,000 of their counterparts in the United States. The picture is even more outrageous when considering that a legislator in Formosa, one of the nations poorest provinces, takes home as much as 1.9 million dollars annually.

Each legislator in Formosa receives a 15-dollar per diem, plus 30,000 monthly to pay advisers salaries, but they are not required to account for their expenditures.

These funds, also granted to city councillors, amount to incredible salary bonuses. A Buenos Aires provincial senator, for example, earns 11,000 dollars per month, but will see a total of 27,000, managed as he or she sees fit.

In Argentina, where unemployment currently stands at 13.4 percent, the minimum monthly salary is 500 dollars, though many wage earners take home even less. There are also hundreds of thousands among the ranks of the unemployed who are asking for the extension of paltry monthly subsidies of 130 to 200 dollars.

Salaries in the public sphere mushroomed 74 percent in the 1990s. Each government employee in 1999 cost the State an average of 2,000 dollars per m onth, while in the private sector, workers earned an average of 1,161 dollars and worked longer hours, says a study by the North-South Foundation, headed by economist Orlando Ferreres.

The Fernando de la Rúa government, which took office last December, attempted to introduce a plan this week to reduce disparity in public salaries, but the initiative has met with resistance from political leaders, even those from De la Rúas own political coalition, who do not want to give up the resources that pay for their political activities.

But, when faced with the threat of making legislators incomes public, Humberto Roggero, who heads the opposition Justicialista Party in the Chamber of Deputies, acknowledged there should be limits.

There should be no legislator or official who earns more than the president, Roggero observed.

Vice-president Carlos Alvarez said Tuesday it is a disgrace that small town councillors are earning 7,000 dollars per month, and provincial legislators are receiving as much as 14,000, much more than the president.

National deputy and university professor Guillermo Arguellos income statement could be that of any legislator, according to the non- governmental organisation Citizen Power, which publicises politicians incomes before every election.

But the scandalous part of Arguellos declaration is the gap between his monthly income as a legislator (10,000 dollars) and what he earns as a professor at a public university (300), two completely legal incomes that are somehow compatible and coexist within the same economy, the same public sphere and the same person.

This case, and the publics anger after the salary revelations were made, prompted the governing coalitions legislators to present a bill in the Chamber of Deputies that attempts to put an end to such gross disproportion.

According to opinion polls, the De la Rúa administration has been able to reduce the publics concern about political corruption from 72 to 46 percent in the six months since he took office. Corruption is the second greatest worry for Argentines, after unemployment, say the surveys.

De la Rúas public image as an honest, austere man who is concerned about leading a transparent and fair government carried him to electoral victory last October, standing in stark contrast to the reputation of his predecessor, Carlos Menem, whose 10-year administration was continuously fending off allegations of corruption.

But De la Rúas political capital as an honest man could be quickly exhausted. The president currently faces several important challenges: reducing the fiscal deficit, attracting foreign investment, increasing employment, and above all, complying with his promise to distribute the benefits of economic development among those most in need.

In this sense, the government faces difficulties on almost a daily basis.

The first is the public deficit, the highest in 10 years. In an attempt to deal with it, the government implemented a controversial tax increase, labour reforms that met with strong protest from the powerful union movement, and spending reductions for public administration.

The Economy Ministry reported that the administration needs to cut another 600 million dollars, and take a close look at the salaries of legislators and public officials, especially in the provinces, where the gap between government budgets and the income of the general population is greatest. The ministry also recommends scrutinising the payroll for public employees, which suffered a series of cuts during the 1990s.

The government hopes to save 200 million dollars by adjusting politicians salaries, though it would be forced to negotiate because federal authorities cannot impose wage policy on the provinces. Another 400 million dollars would come from cuts in public employee salaries and voluntary early retirement.

De la Rúas fiscal reforms increased tax revenue by just two percent in April. Meanwhile, the persistence of the recession and unemployment and the outbreak of protests in the interior against cuts in unemployment benefits all make up a scenario that proves the new presidents honeymoon with the electorate is over, say analysts.

Making matters worse for the Argentine economy, the US Federal Reserve (Central Bank) bumped up short term interest rates last week by a half point, which translates here to another 60 million dollars tacked onto the foreign debt.

One sector of the General Labour Confederation is organising a May 31 march through Buenos Aires to protest the presence in Argentina of an International Monetary Fund (IMF) delegation and pressures on the De la Rúa administration to meet IMF-imposed fiscal goals.

In an unprecedented declaration, the Catholic Church in Argentina, through the Council of Bishops Social Pastoral Commission, expressed its solidarity with the union protest, saying the labour movement is upholding Pope John Paul IIs call for the IMF and the world banking community to implement reforms that benefit the poor.

The big picture puts the governing Alianza coalition at the crossroads. It will either continue to cut expenditures and increase taxes, even at the risk of greater social instability, or take a stand before international creditors to renegotiate the terms of the foreign debt û a possibility that De la Rúa and his allies have ruled out for now.