Public administration employee press conference. (Credit: Richard Salameh)
BEIRUT — Employees in the public administrations are continuing their months-long strike, union head Nawal Nasser said in a press conference Thursday.
Pharmacists may also join the strike, according to their union leader Joe Salloum who, speaking at the same conference, called on all unions to “declare an open and general strike until the election of a president and the formation of a national rescue government.”
At the same time, Khalil al-Habr, of the Coordinating Council for Public Sector Retirees, said that his members would give the politicians “a month” to “pack their things and go away.”
Union members gathered in a contentious meeting at the pharmacists’ union hall Thursday, where the efficacy of ongoing strike actions was hotly debated.
Bechara al-Asmar, head of the General Confederation of Lebanese Workers said strike tactics have been unsuccessful given the lack of a functioning executive authority with which to negotiate.
“We need to start by going to court to know where the money went,” he said, calling also for elections in response to a growing chorus of discontent from union members in the audience.
“You employees in the public administrations have been striking for eight months and where have you gotten to, with what result?” Asmar challenged the conference audience.
Nasser disputed Asmar’s analysis.
“The strike is not without results. Everything we’ve achieved would not have happened without mobilization. For us, the strike is foundational. Very foundational,” Nasser told L’Orient Today after the conference. She added that other tactics, including lawsuits, may be considered in the future if the earnings crisis for public sector workers continues.
Strikes have been widespread in Lebanon recently, including, notably, a teacher's strike that started in December. Many schools reportedly remain on strike, although some teachers returned to work last week following a decision to suspend the strike from unions of primary, secondary, and technical school teachers.
An endless fight against continuous depreciation
Public sector workers, paid exclusively in Lebanese lira — with the exception of teachers who may soon receive some partial dollar payments according to public elementary school teachers’ union member Manal Hdaife — have seen their salaries depreciate in tandem with the currency.
Hdaife told L’Orient Today that the education ministry has agreed to give the teachers an additional $100 fresh per month for the last three months of 2022 and $125 fresh monthly for four months of 2023, in addition to five liters of gasoline per day. Hdaife says the 2022 months are funded by the World Bank and the following four are funded by the government.
The education ministry did not immediately respond to a request to confirm this information.
Stopgap measures such as the 2022 budget’s tripling of base salaries — although these higher salaries are not used for end-of-service calculations, another point of contention between the government and workers — have fallen far short of making up even a fraction of the lost purchasing power of lira-compensated employees, given massive depreciation that grows day by day.
Similarly, recent government attempts to partially adjust private sector minimum pay to offset depreciation have been quickly washed out by further depreciation before even coming into effect.
An agreement struck in December between business and labor representatives to increase the minimum wage to LL4.5 million, finalized in January, has yet to become law. From mid-December until today, the lira has lost more than half its value, dropping from around LL43,000 per dollar to LL106,000 per dollar.
If the new minimum wage were to come into effect today, its value would be less than $43 per month.
Asmar recently told L’Orient Today that the confederation was returning to the negotiating table to further increase the minimum wage in light of this depreciation.
Is dollarization coming?
Nasser’s union is trying to get out ahead of depreciation by partially dollarizing.
“We’re demanding dollars. All the private sector, even down to the small shops, are giving part of their salaries in dollars,” she said. “The state is more capable than others of doing so. We see the Sayrafa dollars are being given daily to the rich and the exchangers. They have a lot of lira and buy cheap dollars at the Sayrafa rate from banks, and those dollars are coming to the banks from Banque du Liban.”
Since the state is unable to pay employees in foreign currency, Nasser says the mechanism for achieving this would be to let employees convert half of their lira salary into dollars at a fixed exchange rate, such as the government’s official LL15,000 exchange rate, that is more advantageous than the market rate.
Potential legal precedent for this maneuver was created earlier this year when Banque du Liban issued a decision, in coordination with the finance ministry, to temporarily lock the Sayrafa exchange rate in place for public sector salaries, briefly shielding public sector workers from depreciation in the Sayrafa rate.
For instance, per BDL’s instructions to banks, March public sector salaries are to be converted to dollars at March first’s Sayrafa rate of LL45,400, not the Sayrafa rate of subsequent days which has reached LL75,800.
This maneuver has been used twice, a finance ministry official not authorized to talk to the press told L’Orient Today, and will not automatically continue. The official denied the media’s characterization of this as a “special rate” for the public sector and was skeptical his bank would allow him to withdraw more dollars than the Sayrafa amount of his lira salary.
Despite calls from the International Monetary Fund for Lebanon to unify its exchange rate and avoid setting fiscal policy via the creation of multiple exchange rates, it remains a preferred crisis-response tool of the Lebanese government.
There are different exchange rates in effect for income taxes, customs and electricity bills. Exchange rate changes have consequently become a key demand for various groups, from used car importers to teachers at technical schools.
Citizens can expect public administrations, although not necessarily public establishments, to be closed over the coming few weeks, Nasser said, unless the government accedes to union demands. She expressed sympathy for frustrated citizens who are unable to complete important transactions with the government.
“People are hurting, we’re hurting too. Our procedures are also held up, just like them. We’re citizens like them,” said Nasser.
“But at the same time I hope they stand with us because the administration is theirs, the public sector is theirs and if the public sector and its employees are damaged, they are damaged in the end.”