Wages under fire

By Muna Al-Fuzai

The COVID-19 crisis has revealed to us how governments and companies around the world are handling the issue of salaries. This subject is not only a local concern, but a global one. I believe it can be resolved with some compromises. There are several successful models of companies as well as bad examples, but the dilemma can be resolved.

I know this issue is very sensitive and the first victim is often the junior employee. I think if salaries have to be cut, let it be from the top of the ladder, starting with big executives whose monthly salaries and annual bonuses exceed the wages of all employees, and this is my personal opinion. Unfortunately, there are those who believe that the junior employee is the weakest link and the solution to any problem is made at the expense of this poor person.

I recently read about a great model in dealing with employees – a decision made by a Gulf company, which I think is best in managing the problem professionally and humanely. This company announced the reduction of salaries of its workers, while directing employees to work remotely from their homes.

This procedure seems fair, because it included reduction of the salary of the chairman himself by 100 percent, salaries of senior management by 50 percent, middle management by 40 percent, and junior employees by 30 percent. I think this is a win-win solution. The salaries of employees continuing to work fulltime in supportive jobs were excluded. The allowances of housing and medical insurance were retained.

But not all companies are alike, as some have rushed to end the services of their employees or reduce wages by around half, or asked their employees to take open-ended leave. Personally, I understand the issue of reducing salaries, but I am concerned more about terminating service, because this abrupt ending will be a great shock and cause harm, since the head of the family or anyone cannot deal with the matter in light of the high prices of goods.

A government report issued by the macroeconomic department of the Cabinet revealed that the government faces a monthly bill estimated at $3.5 billion in the event of a continued holiday granted by the state to citizens and expats in the public sector due to the outbreak of the coronavirus.

Personally, I am against completely shutting down work, and I see that it is necessary to reopen some businesses and activate the economy, as many European countries have taken the decision to resume work while adhering to the rules of hygiene and social distancing, which is a sound and required step to cope with the virus.

Large sectors of the private sector have been affected by the decision to close, such as cafes, salons, recreational complexes, car maintenance workshops and clothing stores that employ expatriate workers and are owned by citizens. The owners have obligations with banks as well, so the problem is widespread and the repercussions of the crisis will be on the Kuwaiti economy and all workers.

I trust it is time to look at the impact of low oil prices on the state’s general budget and the best way out is to activate the economy and bring work back. This crisis is no longer a health issue, but a financial one too. I think government intervention is needed now to save the private sector and everyone’s incomes – not only of business owners, but of all workers, expats and citizens.

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