The salary increase is skewed towards high earners; it was stated that the over 80% raise in the reform was for high earners.
The government's civil servant salary reform is generating diverse opinions.
Our finance expert, Mr. Fasil Tasew, who provided a professional explanation on the matter, stated that they view the implementation of the reform positively, but they also expressed their concerns.
They stated that if the goal was to support low earners, the up-to-80% increase in the reform should have been for the low earners.
The expert, who says the opposite has happened, explained that based on his calculations using the government's published figures, while the low earner's salary increased by 26%, the high earner's increased by 85%. He holds the opinion that this situation is not fair.
He points out that for a government employee whose cost of living has become unbearably high and for whom eating three times a day has become a challenge, the increase made by the government is commendable to prevent them from falling into deeper hardship. However, he raises that it must be considered that the tax-free amount should be based on the amount equivalent to or below the lowest salary.
For example, he said that if the lowest salary in this reform is 6,000 Birr, then the tax-free amount should have been 6,000 Birr. "If we do not make the lowest salary tax-free, we cannot free the low earner from economic pressure; this must be considered," he stated.
Regarding the 160 billion Birr additional money that will enter the economy starting from the coming Meskerem for the implementation of the salary reform, finance expert Mr. Fasil says that while some experts opine it could exacerbate inflation, he does not share this view. He argues that since the money is being paid to productive employees, it will increase productivity further, but it does not, by itself, cause inflation. However, he adds that if it creates an economic imbalance, the feared outcome is inevitable, and control is needed for this.
The expert advised that private sector employees, who are not covered by this salary adjustment, should consider making a salary adjustment that matches their capacity in order to improve their productivity and to cope with the intense competition they face in the job market.
