Solving the riddle of public employment

Unemployed graduates are a thorn in the side of every Government. The security of a public sector job is loved by many but others insist tax payer sponsored education is enough of a handout and graduates need to find their own space in the private sector to build their lives. The National Government is taking a novel approach to solve an age old problem. 

Decades of handing out jobs to gain votes have left a bloated public sector as a burden to society. Recurrent expenditure has become the top priority of the Budget and one that is becoming increasingly difficult to finance given the drop in tax revenue. Bankrolling pensions will also become tougher for the Government as debt repayment responsibilities rise over the next few years. Already pension programs started for fishermen and farmers have been stunted due to lack of resources and the situation will only get worse unless the Government can increase its revenue through investment. 

Foreign investment, which is the dream of this Government, is ironically hampered by the same public sector it spends most of its money on maintaining. As pointed out by Prime Minister Ranil Wickremesinghe himself this week, increased recruitment to the public sector over the past ten years has resulted in calcified layers of bureaucracy that are hindering foreign investment opportunities into Sri Lanka.  

Many Governments have tinkered with the problem but have found no way to avoid it as Government employment is one of the key expectations of electorates. Most ministers on accepting their portfolios promptly set about recruitment, sometimes for jobs that do not exist. Employees, once they have gained a foothold, unionise and promptly begin demanding more salaries and other perks. Refusal to acquiesce to these demands usually result in strikes that also impact the economy, especially if they are in key sectors such as transport, power and healthcare. These rounds of agitation by unions usually ease during election time since both the main parties know that they are going to get a leg up if they promise salary hikes to the 1.3 million public workers of Sri Lanka. This usually sets off a bidding war with both the Sri Lanka Freedom Party (SLFP) and United National Party (UNP) attempting to outdo each other in promises to Government workers. This bargaining power in turn creates more Budgetary pressures as the promised increases in salaries not only raise expenditure but also push up inflation. Salary increases over the past two years are credited with boosting Sri Lanka’s growth numbers though at an unsustainable level. Consumption based perks such as car permits also lose the Government millions of revenue and do not bring inclusive growth.    

The system has worked well for so long there is little incentive to change it. But the Government has plans to beat the devil at its own game by employing graduates in the private sector but paying their salaries. Those chosen for this program will also be funneled into Government media organisations where they will be trained and, if they chose to remain in the profession, will be transferred to media departments of ministries. Each graduate will be sponsored for four years and after that time could chose to continue working in the private sector. But such a step would have to be widened to the provinces and sustainably applied to change those obsessed with a Government job, whether it will stop the protests only time will tell.