Problems with High Government Salaries

Government salaries are too high. On average. Thought not all are overpaid, top government officials are severely underpaid compared to their private sector peers. Such high salaries (on average) creates multiple problems, explains Karthik Muralidharan in Accelerating India’s Development.

 

A lot of people try to get a government job desperately. Such demand invites corruption in hiring. In addition, since the attraction of government jobs is so much (higher pay + job security + pension), a lot of people take any government job they can land. Regardless of their area of expertise or interest. Since many of these jobs have some minimum qualification, it leads to the sprouting of colleges to fulfil the need for a degree. The poor quality, and disconnect from employability of such colleges is of no concern even to the student because they view that degree as the minimum qualification to land a government job.

 

With the ratio of applicants to government jobs so low, very few make it. The rest now show up in the ranks of the “educated unemployed”. As seen above, a lot of them didn’t care which college they went to or what skills they learnt or what their job prospects would be in the private sector, so should we be surprised?

 

The fact that government employees can’t be fired is a measure to protect them from being fired for “disobedience” by their political bosses. But this also means many don’t work at all. Or don’t even show up to work.

 

Government employees get promoted based on experience, not performance. And they get pay hikes regardless of outcomes. How can anyone be motivated to work in such a setup? Personnel management is very weak in government jobs. Even when the option exists, upskilling doesn’t translate into better roles or promotions or pay, so why would anyone be bothered to learn new skills or perform better?

 

Investing in local folks might be a better option. Those from the area might have a greater incentive to try and improve things – after all, their families and friends live there. (Instead, state/nation-wide hires are sent to places they don’t care about.) Such attempts, esp. with women, have repeatedly produced good outcomes. In addition, it also increases women’s participation in the labour force in a country where families may not want women to work far from home.

 

One solution the author recommends is to train the lower ranks (the ones who didn’t clear the exam for government jobs) as backups and addons. They could be hired as needed but as contractors, not employees thus saving on some of the high costs of taking on more employees. The reluctance to hire (due to the high life-long costs) compounds the problem of understaffing in government jobs which in turn impacts the quality of government service.