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The government failed to fulfill its commitment to provide a decent salary for public sector employees, especially retired army personnel, who once again took to the streets on Tuesday to express their outrage.
The decline in purchasing power of wages and pensions of military personnel, veterans and public sector employees is not a new issue. Since the onset of the multidimensional crisis in 2019, all public employees have faced severe hardship. The average monthly salary for an active public sector worker is around $300, while retirees receive just $150. End-of-service benefits are minimal, averaging about $4,000 after 27 years of service.
Public sector salaries were first affected by the removal of the fixed exchange rate between the Lebanese pound and the dollar, then by the devaluation of the national currency, the “dollarization” of the economy, and ultimately by the rising inflation of both domestic and imported goods. This inflation has a direct impact on consumption, savings and investment.
No salary adjustments
Retired military personnel have been disappointed by the government’s failure to keep its promise of a salary adjustment last June. Their anger on Tuesday was fueled by the absence of allocated funds for a salary increase in the 2025 draft budget. Meanwhile, taxes on low-income individuals have been raised by approximately 30%. The projected VAT revenue in the draft budget stands at 140 trillion Lebanese pounds, an increase of 40 trillion pounds from 2024.
This substantial figure raises doubts, particularly given the country’s recession and the lack of expected growth in imports or exports.
In this context, why is the government, which claims to aim for a balanced budget in 2025, not exploring options like settling maritime areas to boost revenue, instead of taxing employees’ salaries?
Inequality
The protesters are not asking for anything unreasonable. They are merely seeking fairness and the correction of inequalities in the distribution of social benefits as outlined by the government. Currently, these benefits are nearly fifteen times the salary of public sector workers deemed “productive” in 2019, while retirees receive only four additional salaries. As a result, the protesters will not be content with a salary adjustment of less than 40% of their 2019 earnings.
Gradual adjustment
In this context, the Civil Service Council has devised a plan for a phased adjustment of salaries and pensions over the next four years, along with reforms to the retirement system, end-of-service benefits and an increase in the retirement age, among other measures.
However, the implementation of this plan depends on the approval of a law by Parliament following a government proposal. According to the plan, public sector employees will initially receive around 20 times their 2019 salary, with an annual increase of eight salaries, reaching 46 times their 2019 salary in four years. The plan is set to be implemented on January 1, 2026, when state revenues are expected to integrate all additional compensations within salaries.
From that point on, it will be up to the government to manage the finances.
