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by Usvatte-aratchi
(
September 29, 2012, Colombo, Sri Lanka Guardian) In 2011, there were 1441 employees in the
Central Bank and they were paid Rs. 2, 250, 029,000 as shown in the published
accounts of the Bank. Then on average an employee was paid Rs. 1,560,000 per
year, an average monthly pay of Rs. 130,000. Of all employees 11% were Minor Employees:
drivers, peons and others. Those not minor employees fell into two
categories: Staff Class and Non-staff Class, roughly equivalent to professional
and general service categories. There
were 646 employees in the Non-staff Class
and 629 in the Staff Class. There were 4 employees on fixed term contracts, who
were not classified. That makes up the 1441.
Of
all employees in the Staff Class, 17 percent [109 out of 629] had no post
secondary education, whatever. Of them 83 were in Grade I, 23 in Grade II and 3
in Grade III and none in the highest grade, Grade IV. They are generally those
promoted from the Non-staff Class on account of outstanding work in that class and
promise of good work at higher level s of responsibility. Of all employees in
the Staff Class, 28 [4 percent] had professional qualifications, without a
first degree. Then 137 out of 629 [22 %] had no first degree. 248 [40 percent
of 629] had only a first degree; 80 [13 percent] had a university degree and
professional qualifications; 124 [20 %] had a post-graduate degree; and 32
[about 5 %] had a post-graduate degree and professional qualifications. Those
in Staff Class who had qualifications beyond a university first degree comprised
38 percent of all in that class. Those with only a first a degree constituted 44
percent of the total, considering those with a professional qualification and
no university degree as having obtained a university degree. Then 61 percent of
the staff in the Staff Class had no education beyond a first degree from a
university.
Let us try to establish the average wage paid
to an employee in the Staff Class in the Bank. We know that the average wage of
all employees was Rs.130,000 a month [2, 250, 029,000 (1/12, 1/1441). Let us ASSUME that minor employees were paid
on average Rs.30,000 a month. Their total monthly wage bill would be
Rs.4,860,000. Let us also ASSUME that the average wage of an employee in the
Non-staff Class was Rs.75,000, 2.5 times
the average wage of a minor employee. They would be paid Rs.48,450,000 a month.
That leaves Rs.144, 192,500 to be paid to 629 employees in the Staff Class,
giving them an average wage of Rs.229,000 per month. That works out to three
times the average wage paid to an employee in the Non-staff Class and about
eight times the average wage of an employee in a the Minor Employee category.
These multiples do not look grossly unlikely.
It
is necessary to emphasize repeatedly that these wage rates are what I have
ASSUMED that staff in the Bank are paid. I have used only figures available to
anyone from published sources [Central Bank Annual Report 2011, page Part
II-62] and I have not spoken to my friends presently in the Central Bank employ
or were so employed at any time past. These figures are consistent with
published accounts of the Central Bank for 2011.What is meant by consistent is
that when any two wage rates are assumed, the third is determined for you with the
residual obtained from figures publish by the Bank. There are three sets of
staff, Minor Employees, Non-staff and Staff. Let us call their wage rates M, N
and S. If you assume wage rates for M and N as I have done, S is determined for
you. If you assume wage rates N and S, the wage rate M is determined. And if
you assume wage rates N and S then the rate M is determined for you. It follows
that if I have assumed too low a wage rate for minor employees [Rs.30,000 a
month] , then the average wage for Staff Class is over estimated. If I have assumed
too low a wage rate for Non-staff class, then too, the resultant wage rate for
the Staff class is too high. The
argument can be extended with different assumptions, almost ad infinitum.
Consistency
in that manner I have shown is no demonstration that the figures I have assumed
are right. I think they are not far wrong. Of course, the Central Bank can
advise the public the correct figures, much to the latter’s enlightenment.
After all, it is their money and they have a right to know how they are spent.
To
get back to the comparisons. The relevant category for comparison with
university teachers is the Staff Class. All university teachers have at least a
university degree, First Class or Second Class Upper Division and most have
some post-graduate education. In the
Central Bank, 78 percent of employees in Staff Class have at least a university
degree and 40 percent of them have had some post graduate education. A
reasonable guess I have presented is that employees in the Staff Class receive
about Rs.225,000 per month. This is also the average wage rate, which is paid
to the 60 percent of employees who have
no more than a first degree and some less. We have learnt from Professor Amal
Kumarage of Moratuwa that from October 2012, a Senior Professor, the highest
level of employment as an academic in a university, will be paid about
Rs.150,000 per month. A senior professor has one or more higher degrees, often
including a Ph.D. degree, which is not true for staff in the Central Bank. That
difference in wages does not seem fair and certainly seem wrong incentive-wise.
An assistant lecturer in a university,
often with no more than a good first degree, will receive, Professor
Kumarage assured us, close to
Rs. 50,000 a month, a far cry from what a new recruit to the Central
Bank must be receiving. A bright
academic with a good first degree and a Ph.D. from a good Faculty has every
incentive to take the first plain out of Katunayake. At the same time there is
no clear evidence that there has been any large scale culling of staff at the
Central Bank as they age, for whatever reason, including the search for higher
wages. In 2011 no more than 11 [of 1441] staff members resigned from the Bank.
If their current wages were too low, then there should have been a much higher
turnover of staff. These wages are not essential to keep them employed at the
Bank. The average age of employees in Staff Class Grade IV and III is 51 years
and those in Grades II and I, 41 years. The latter category includes 106
persons [out of 472] who were probably promoted from the Non-staff Class and
therefore older. If there were high turnover, we must see a much younger age
profile for staff in this category. The argument concerning incentives will
need more justification to hold water. Work
in the Central Bank is not fraught with unpleasantness greater risk to permit a
higher risk allowance, to justify the higher wages.
The
comparison between wages earned by employees in the Staff Class in the Central
Bank and university academic staff make convinces me that university academic
staff deserve relatively higher wages. The inability of universities to recruit
some 3,000 [?] staff to its cadre year after year is evidence of poor wage
incentives, among other things.
I
have a more intimate knowledge of work in the Central Bank than in
universities, although I am not completely unfamiliar with work in
universities, either here or overseas or indeed, the history of universities
anywhere over the last 800 years. I spent my first 3 years as an economist at
the Central Bank of Ceylon and the Central Bank very generously provided for my
education in Cambridge. I Iearnt the first letters of the economics alphabet in
Peradeniya. I have always found universities very civilized places, havens in
the midst of all the storms of noise and clutter outside. Walk through the tall
gates of Columbia College in Upper
Manhattan, drive into Yale College in New Haven or walk into Colombo University
and you know you are in a place of
civilization. Best of all are university towns. Drive into Swarthmore College
about 15 miles out of Philadelphia, a huge city, Princeton in Princeton, New
Jersey, through the great gates of King’s, Trinity or St.John’s in Cambridge and many another to realize the validity of
what I say. So my loyalties are evenly
divided between Central Banks and universities and this note bears witness to
that tension. However, the comparison between wages received by employees in
the Central Bank and in Universities makes me convinced of the case for higher
wages to academic staff in Universities now. ]