Despite low wages, teachers appear to remain loyal to government

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April 22, 2016 18:39

On September 1st, teachers’ salaries increased by 25%, but working hours rose from 18 to 20 hours a week. Taking this into account, their salaries rose only by 3% on average.

The slow pace of teachers’ wage growth and increased working hours has raised discontent among teachers. However teachers are not prone to open conflicts with the authorities, and use other means, such as leaving, to demonstrate their discontent. Meanwhile, teachers are one of the most loyal social groups.

Despite teachers’ salary increases in 2013, they still make less than average. In August 2013 teachers were earning 60% of the average wage. However teachers’ protest moods have not visibly increased and their loyalty has not decreased.

All in all, teaching as a profession is not prestigious in Belarus. Small salaries and heavy workloads have prompted many to leave. Secondary school teachers are often either quite elderly or poorly qualified; many become teachers because they cannot compete on the labour market. The shortage of teachers results in a greater workload for the remaining ones, meaning that any salary increases are levelled.

Yet teachers have played an important political role in the government system since the mid-2000s, when ideology became dominant in education. In the midst of the 2011 currency crisis Lukashenko said, that ‘you [teachers] are the basis for the government policy, all political campaigns rely on you’. Meanwhile Lukashenko ordered purges in the education system to get rid of ‘oppositional’ teachers.

During election campaigns, teachers form the core staff of the district election committees. Commissions are usually chaired by education administrators, and polling stations are mostly located in educational institutions.

Teachers’ political loyalty stems from their high dependence on the state. As the welfare state shrinks, the government will cut down expenditure in areas where the risks of growing social tension and public discontent are lowest. Closer to the election campaign, the state will start buying teachers’ loyalty by pumping up their salaries.

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Growth in real wages may disrupt macroeconomic balance in Belarus
October 02, 2017 12:12
Фото: Дмитрий Брушко, TUT.BY

The rapid increase in wages has led to a decline in the ratio between labour productivity and real wages to one. Previously, the rule was that enterprises, in which the state owned more than 50% of shares in the founding capital, were not allowed increasing salaries if this ratio was equal to or less than one. The authorities are unlikely to be able to meet the wage growth requirement without long-term consequences for the economy. Hence, the government is likely to contain wage growth for the sake of economic growth.

According to Belstat, In January – August 2017, GDP growth was 1.6%. The economic revival has led to an increase in wages. In August, the average monthly wage was BYN 844.4 or USD 435, i.e. grew by 6.6% since early 2017, adjusted for inflation. This has reduced the ratio between labour productivity and real wages from 1.03 in January 2017 to 1 in the first seven months of 2017. This parameter should not be less than 1, otherwise, the economy starts accumulating imbalances.

The need for faster growth in labour productivity over wage growth was stated in Decree No 744 of July 31st, 2014. The decree enabled wages growth at state organizations and organizations with more than 50% of state-owned shares only if the ratio between growth in labour productivity and wages was higher than 1. Taking into account the state's share in the economy, this rule has had impact on most of the country's key enterprises. In 2013 -2014 wages grew rapidly, which resulted in devaluation in 2014-2015.

Faster wage growth as compared with growth in labour productivity carries a number of risks. Enterprises increase cost of wages, which subsequently leads to a decrease in the competitiveness of products on the domestic and foreign markets. In construction, wholesale, retail trade, and some other industries the growth rate of prime cost in 2017 outpaces the dynamics of revenue growth. This is likely to lead to a decrease in profits and a decrease in investments for further development. Amid wage growth, the population is likely to increase import consumption and reduce currency sales, which would reduce the National Bank's ability to repay foreign and domestic liabilities.

The Belarusian government is facing a dilemma – either to comply with the president’s requirement of a BYN 1000 monthly wage, which could lead to new economic imbalances and could further affect the national currency value, or to suspend the wage growth in order to retain the achieved economic results. That said, the first option bears a greater number of negative consequences for the nomenclature.

Overall, the rapid growth in wages no longer corresponds the pace of economic development. The government is likely to retain the economic growth and retrain further growth in wages. Staff reshuffles are unlikely to follow the failure to meet the wage growth requirement.