Wages and salaries, both in the public and private sectors have not kept pace with the rise in inflation. Yet, the members of the legislature have been one sector that has recorded a positive growth in salaries.

While the masses are left to fend for themselves under the dire conditions experienced at present, the government members and legislators are once again gearing to increase their salaries.

This increase is allegedly being pushed along with the proposed salary increase to the judiciary.

The Supreme Court last week ordered the National Salaries and Cadre Commission to formulate a final proposal with regard to the increased salaries by June 3.

Parliamentarians, led by the Prime Minister, are moving to get their salaries increased in parallel to a pay hike for judges, according to reports.

The law had placed the salary of the prime minister on par with that of the chief justice and the speaker's salary with that of the Attorney General as Clause 68 (1) of the Constitution brought the salaries of judges and parliamentarians to the same level in 2005.

Parliamentarians to benefit

Therefore, along with the pay hike to judicial officers, parliamentarians too are to benefit from the move, as their salaries have been placed on par with those of judicial officials depending on the position they hold.

Effective from January 1, 2007, the Prime Minister draws a monthly salary of Rs. 71,500 in keeping with the new law and the Speaker Rs. 68,500.

Cabinet and non-cabinet ministers have their salaries on par with that of Supreme Court judges (Rs. 65,000).

Deputy ministers, the deputy speaker and the deputy chairman of committees draw a salary of Rs. 63,500, which is on par with that of Appeal Court judges.    

Other parliamentarians and High Court judges get paid the same remuneration (Rs. 54,285).

However, the pay rises received by employees, both in the public and private sectors, so far have been lower than the rate of inflation, which means that the income of employees have declined in real terms over time.

Central Bank statistics have revealed that the salaries drawn by a majority of the country's workforce have recorded a negative growth since 2005.

Private and public sector salaries

While only 16% of the country's labour force was employed in the public sector, 63% was engaged by the private sector.

Statistics reveal that the salaries of the public sector employees have seen a positive increase while the private sector employees' wages have seen a negative growth.

According to the Labour Department, the real percentage change in private sector salaries has seen a negative growth of - 4.8% in 2004 to - 9.9% in 2006. The real percentage change in the public sector worker's salary has been quite the opposite as it has recorded an increase from 14.0% in 2004 to 15.1% in 2006.

The statistics clearly reveal that the majority of the labour force in the country was drawing a salary that obviously was not commensurate with the expenditure, given the rising cost of living.

JVP parliamentarian and trade union wing leader, K.D. Lalkantha has said that the country has recorded the highest increase in the cost of living index between 2005 and 2007 - since President Mahinda Rajapakse assumed office.

Cost of living

He says that the cost of living has increased to such a level that a minimum Rs. 30,885 a month is required to maintain a five-member family.

"The index has gone up by 2000 points since the Rajapakse regime came to power. If Rs. 2.20 was given to each point the salaries of public servants should be increased by Rs. 5,000 a month," he has said.

Lalkantha has warned that the JVP would mobilise the masses to win this demand. (See box)

Even the income of the Samurdhi recipients, the poorest of the poor, has seen a decline.

The government admitted to the decline in the income of Samurdhi recipients in parliament responding to an oral question raised by UNP Parliamentarian Ravi Karunanayake.

Responding to an oral question on Samurdhi beneficiaries, comparing the Rs. 1000 in 2004 with its value in 2007, the government responded by saying that the present value stood at Rs. 560.

Economists as well as donor agencies have been highlighting the disparities in the country's economy from region to region.

Per capita income

Be that as it may, the government has now taken to using per capita income, which is said to stand at US$ 1,600, to paint a rosy picture of the country's economy and the people's living standard.

Analysts point out that one could basically take the total income   -  where say, 10 persons  get US $10  million  per person while the balance  get only  US $2 per person - and use the average as the per capita income, which  would work out to US $ 1600.

"What US $1600  per capita means is that you are receiving roughly Rs. 15,000  per month. Just how many workers get that? So where is this per capita distribution?" they question

These analysts say that the per capita income used by the government is misleading, since it has been worked out at current market prices.

Principal Researcher, Point Pedro Institute of Development, Dr. Muttukrishna Sarvananthan says that the per capita income worked out from the national income accounts is deceptive because it includes income of institutions as well (government, non-government, private, etc), which may not necessarily filter down to the household incomes, which is in contrast to the  Household Income and Expenditure Survey (HIES).

Household expenditure

The HIES captures the income and expenditure of households, which is the real disposable income of households and by extension, individuals. Thus, a significant part of the per capita income derived from national income accounts is ghost income as far as individuals are concerned, which is reflected in the significant discrepancy between per capita income derived from the two sources, viz. HIES and national income accounts.

According to the latest Household Income and Expenditure Survey  undertaken by the Department of Census and Statistics (DCS) during 2006/2007 the mean per capita income per month was only Rs.6,463 (i.e. the average income per person per month) and the median per capita income was only Rs. 4,043 (i.e. 50% of the population in Sri Lanka receive less than Rs.4,043 per person per month). 

"All the foregoing figures pertain to the country as a whole. There are of course district-wise variations in the above figures. The HIES was conducted among a representative sample of households in 19 out of 25 districts in the country. All five districts in the north and Trincomalee District in the east were not covered by this survey. Therefore, it does not cover the entire country. Sri Lanka's national income accounts also do not fully cover the LTTE controlled areas in the north," Dr. Sarvananthan explained.