A Crack in the Iron Rice Bowl?

Civil servants will have a pay raise.

The program to raise civil service pay, implemented starting July 1 of this year, is the largest adjustment in many years. It is 12% for middle- and lower-level civil servants, and higher levels can look forward to 15%.

Calculating from this basis, the salary of civil servants who have passed the higher exam will reach NT$20,000. Those at level 14, high ranking officials, will reach NT$60,000, and ministerial level pay will break NT$80,000.

Salaries have certainly been raised, but with news of rising prices, plus higher interest rates and a tightening of the money supply, this new gift has shrunk even before it has reached the purses of its intended recipients.

There are those who describe the level of civil service pay since the government came to Taiwan forty years ago as, "It is only enough for food and clothing, but not enough to satisfy the accomplishment motive." That is to say, although salaries are not small, they have not been a big enough incentive, especially for those living in the high-cost Taipei metropolitan area.

An ordinary high school graduate, having passed the standard exam, has a starting salary of NT$17,000. In fact, according to the Central Personnel Administration, salaries for those of level 1 to level 5 are higher than those in the private sector, with the latter 13% lower. But the higher the position, the larger the gap with the private sector. A college grad passing the high-level exam starts at NT$20,000, already lower than in the private sector. As seniority increases, the lag becomes larger and larger.

The CPA discovered that comparable private sector jobs pay 15% higher than those at civil service levels 6 to 9; they were 22% higher for levels 10 to 12. The Directorate General of Budget, Accounting and Statistics, in another report, found that at a level comparable to general or vice-general manager, civil service level 12 and above, the average salary was 33% lower.

From this you can tell that in public institutions, the higher the positions, the greater the responsibility; but returns are not correspondingly increased.

The government knows civil service pay is not reasonable and has made efforts to improve it. Since 1973, salaries have been adjusted 14 times. However, accoraing to an April report of the DGBAS, in the past 16 years, the salaries of military, civil, and educational personnel have been increased 4.55 times, but those in private manufacturing have gone up 6.69 times.

Why the low value on civil servants? Wu Ting, the dean of the Graduate School of Public Administration at National Chengchi University, says the key is that there are too many government workers: "Some people say that if you cut one-third of the current number, work can still be carried on as usual." Wu says that although this is to be taken humorously, you can tell how big the government machine is, and how heavy the burden that must be shouldered.

Given this 500,000 strong workforce, no major change would be easy. Wu Ting says that according to management principles for private enterprise, one should use a small number of people of high caliber and give them good conditions like a high salary to stimulate them to use their full potential. The problem is, many government institutions have redundant workers of inadequate productivity. Because of historical and political reasons, the government is unwilling to pare them away, in fear it will create a social problem. Once redundant employees create a burden on the treasury, there is no way to reduce it, and there is no room for the scope of salary adjustments to be very large. "It's like everyone eating out of a big pot of rice; it's only that everybody has to eat a little less."

Wu Ting's metaphor more or less describes the government predicament. It's not that no one thought to raise salaries before, but the idea was shelved in the interest of fairness. One official of the CPA points out that the most irrational place in the current salary structure is that the gap between high and low levels is too small. Yet the government generally believes if it only raises middle- and upper-level pay, this will affect the morale of the ordinary worker. But the government can't bear the financial burden of an across-the-board increase. Between a rock and a hard place, the problem of salaries can only be stretched out year after year.

Associate Professor Hsu Pin-sung of the Department of Public Administration at Chengchi University says part of the reason is economic. In the past, every time the government raised salaries, the private sector usually followed suit. Out of fear of stimulating private sector increases and thus inflationary pressure, the government deliberately plays down the priority of civil service salaries.

Add to this that the ROC has no regulations like the U.S. or U.K. stipulating that when the gap between civil service and private salaries reaches a certain level, the government must propose an adjustment. With no clear legal rules in the ROC as to who shall propose salary adjustments, there is no formal channel of appeal for civil servants. Thus, says Hsu, there have not been any standards as to when, how much, and according to what principles salaries may be adjusted.

To resolve the problem, the only way is to start by reducing manpower and establishing a legal framework. Wu says the Korean example deserves reference. Korean law provides that every government institution must cut personnel 5% a year, even if its personnel are inadequate. It is better to recruit new people through exams. Though it seems this method is uncompassionate, it is the best way to promote rejuvenation. As for laws, the government should propose an increase when the civil service salary structure is inadequate, as in the U.S.

Whatever the case, this year's increase is already fixed. But questions about next year are on people's minds. On May 11, Pu Ta-hai, Director of the CPA, in a report before the Central Standing Committee of the Kuomintang, said that salary adjustments hereafter will take into account salary levels in enterprises, average national income, the economic growth rate, price indicators, and the government's financial capacity, as well as specialty, skills, position, and geographic location.

Although in the view of DGBAS Director Ou Yu-cheng, the "concretization" of this report will take at least five years, "it seems there are already some standards," says a scholar. "We just have to see how much they can do."

A Comparison of Civil Service and Private Sector Salaries

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A Comparison of Civil Salaries Before and After the Most Recent Adjustment

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A Comparison of Civil Service and Private Sector Salaries.

A Comparison of Civil Salaries Before and After the Most Recent Adjustment.