Wednesday 23 June 2021

President Solis Argues Public Sector Wage Reforms Would Take Effect Within18 Years

Photo from La Nacion
Photo Marcela Bertozzi, La Nacion

(qCOSTARICA) It would take between 15 and 18 years, maybe even 20, to feel the impact of any reforms in public salaries, says President Luis Guillermo Solis in addressing the current issue of “gross” salaries paid to  employees at many of the state institutions like ICE, RECOPE and the UCR (University of Costa Rica).

“These issues of wages have no immediate impact on the current fiscal situation, but a subsequent impact, say between 15 and 18 years, and even talk of 20 (…),” Solis said to the press.

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The president admitted that the Executive Branch (government) has withdrawn from the legislative agenda session that starts August 1, discussion of legislators on state wage reforms.

Solis said that short-term projects that generate income to meet growing expenses, combatting tax fraud and smuggling, reducing exorbitant pensions and the Value Added Tax (VAT) and income tax, are all pending issues.

The issue of the “gross” wages that have been in the limelight the past several weeks is not new,  reflected in the 2014 national budget, a public debt representing 40% of the gross domestic product and worsening. The Ministry of Finance (Ministerio de Hacienda) is projecting the debt could reach 67% of production by 2019.

Figures show that public sector salaries and bonuses came to ¢3.7 billion colones in 2014, more than 55% of the national budget. In fact, bonuses outweight basic salaries. Numbers also show that 99% of public sector employees are paid a bonus for good performance.

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The contradiction. While President Solis says there is “an urgent need” to submit the issue of wages to a public debate, his Ministro de Hacienda, Helio Fallas, and Ministro de la Presidencia (Chief of Staff), Sergio Alfaro, both consider this is not the time to enter the debate.

Legislator Otto Guevara, who of late made a public spectacle of the gross salaries, that led to a public demonstration on Monday by public sector workers, says President Solis proves not to be a statesman, thinking only in the short-term and not the long-term benefit.

Solis, meanwhile, believes, “we must find the right time, it is not a simple discussion, it not only requires law, but negotiations with the social sectors and clarification of acquired labour rights, which cannot be undermined”.


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