1998 pay rise

In 1998, three laws were approved to increase the salaries of public employees. The rise cost the government LBP 400 to LBP 450 billion, pushing the total cost of salaries to LBP 4200 billion.

2008 pay rise

Another increase estimated at LBP 250 billion was approved by virtue of Law No. 63 dated December 31, 2008. With the rise in the numbers of state employees, the total government spending on salaries and wages soared to LBP 5600 billion.

The 2012 draft budget, which was laid down before the most recent pay hike, estimated the cost of public salaries at LBP 6249 billion, including LBP 1350 billion for end-of-service indemnities. The budget revenues were set at roughly LBP 15 544 billion, of which 40% goes to cover public salaries.

Most recent salary scale

According to the Ministry of Finance, the new salary scale approved by the government is likely to increase public salaries by around LBP 1595.8 billion, excluding the pay rise in public institutions, municipalities, the Directorate General of Customs and the Directorate General of Telecommunications, which, if added, would drive the cost up to LBP 2200 billion at least. Thus, the total cost of public employees would stand at LBP 8500 billion, which constitutes 55% of the budget revenues.

The cost is distributed as follows:

• Serving and retired employees in public administrations: LBP 137.8 billion
• Teachers at the Ministry of Education and Higher Education: LBP 214.6 billion
• 6 exceptional steps for primary and intermediate teachers: LBP 137.7 billion
• 6 exceptional steps for secondary teachers: LBP 63 billion
• The military: LBP 518.2 billion
• Public authorities (President, ministers and MPs): LBP 8.3 billion
• Discharge indemnities: LBP 171.9 billion
• Increase in the salaries of the retired: LBP 344.1 billion

Parliament might ratify the salary scale or postpone its endorsement for a couple of months. Although the new hike seems inescapable, its approval without an adequate funding source would translate into further budget deficit and an increase in public debt. On the other hand, imposing new taxes to finance the salary scale would raise the prices, meaning the government would be receiving with the right hand what it had offered with the left, thrusting the Lebanese once again in a vicious circle of pay hikes and price increases.