How to cut wage bill without cutting salaries or employees
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
02 April 2017
Peter Kagwi is wondering: “[by] how much should each government
employees cut [their] salary in order for Kenya to realize a 20% cut on
overall wage bill? Does wage bill include other expenses like the
notorious travel, hospitality and entertainment by these people?”
The last question is the easiest to answer: yes, the wage bill includes
those allowances. My first job was at a public university and, when I
started, my basic pay was Sh4,500 while the house allowance was Sh5,000.
One allowance was 11 per cent higher than the basic salary. At the entry
level, I did not qualify for many other allowances: I later learned that
the more senior officers at the institution hardly ever utilised their
salaries.
With that experience that lasted for 12 years, I am convinced that
cutting basic salaries of government employees will not have any
significant effect on the public wage bill. The biggest problem lies in
allowances.
I think we should have a policy saying that no public servant should
ever be paid allowances that are higher than their annual basic salary
in any one year. I suspect that this would cut the wage bill by more
than half. In addition, and perhaps more beneficial, the habit of
workers going on unnecessary trips and attending irrelevant seminars and
conferences would come to an end.
So, my answer to Peter’s first question is this: we don’t need to cut
anybody’s basic salary at all to achieve a significant reduction in the
public wage bill! All that is need is a cap on allowances payable.
***
Robert Muiruri writes to say that he has observed oil tankers “and
notice they come in different shapes mostly asymmetrical”. So he asks:
“How do the fabricators determine the volume?”
He adds: “[Since] the tankers appear to be slanted towards the rear,
substantial weight is directed to the last rear axle. Wouldn't this
disqualify them at the weigh bridge assuming the scale measures every
axle?”
Even though the complete tank may look asymmetrical; a more careful
observation will reveal that it is made of several symmetrical sections.
Thus the manufacturer can calculate the different volumes and add them
up. But it is important to note that the desired answer doesn’t have to
be exact! As the following story demonstrates, the important value is
the amount of liquid that is loaded:
Thomas Edison (inventor of the electric light bulb) once asked a young
mathematician to determine the volume of a bulb. Determined to prove his
worth, the young fellow applied sophisticated formulae and did the
calculation. The following day, he presented the result to Edison.
Edison went to his office and came out after just a few minutes saying:
“You’re off by 30 per cent”. The mathematician was shocked at how
quickly the boss did the check. Then Edison replied: “I just filled it
with water and measured the volume of the water!”
I guess the story answers Robert’s second question as well!
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