The Bhutanese Leading the way.
As the Prime Minister recently announced the Seventh Pay Commission, the news was greeted happily by civil servants, but there was a sinking feeling among the private sector.
The sinking feeling is not jealousy that civil servants are getting a pay increase, but the realisation that the private sector is in no condition to catch up and will therefore suffer from the consequent inflation, including rent hikes and increased prices of goods and services.
The larger private sector has not really recovered from the pandemic. One of the largest employers in the private sector, the tourism sector, is still in the dumps despite increasing numbers of tourists due to excessive numbers of hotels, narrower profit margins and shorter stays.
Another major sector, trading and retail, along with a host of service sectors such as restaurants, karaoke bars, cafes, etc., has not been doing well due to the huge migration of youth abroad. This is visible, with even prime commercial spaces going vacant.
The manufacturing sector has also not been doing very well due to international and domestic factors.
There is only a small slice of the well-to-do who are doing better, and their affluence and visible lifestyle are often mistaken for that of the larger private sector.
There are 25,000 MW in power projects planned until 2040, and there is already a growing perception that the private sector has nothing to gain from them, as the benefits are all booked for civil service pay hikes and the expansion of the government.
There is already a major pay gap between the private and public sectors following the 50% hike given in 2023, and now the gap will get even bigger.
To retain employees, private companies may well give a hike they can barely afford, but this will take away valuable capital that could have been used to invest in their own businesses.
The private sector cannot expect a government pay hike, but it is time to consider how national resources can be shared more fairly.
“Equality of opportunity is the essence of social justice.”–Tony Honoré
