EACH NEW PUBLIC EMPLOYEE COMPROMISES $ 40 MILLION

The national government issued a decree prohibiting family members of officials with ministerial or superior ranks of being appointed as employees in the national public sector. The measure has high symbolic value because in the Argentine political culture the use of public employment as a mechanism to distribute personal, familiar and political favors is quite common.

The norm does not solve the problems linked to the excess of personnel and low professionalism reigning in public employment. In the best of cases, it can be seen as a sign to break with rooted bad practices. But there is a risk that this will become a mere act of opportunism that diverts attention from an extremely important issue.

What is the state’s burden when a new employee is hired? Taking as an example a provincial public employee (66% of total public employment) who is employed with an initial category at 25 years old and assuming that the likelihood of resignation is low and dismissal almost impossible, the estimated cost is the following:

• During its active working life she will be payed AR$ 23 million at current prices for salaries, social contributions and gratuities.
• When she retires she will be paid AR$ 17 million more at current prices for retirement and the pension derived to her spouse when she dies.
• Thus, designating a public employee involves a total funds compromise of approximately AR$ 40 million.

These data are approximate but very illustrative of the magnitude of public resources compromised when a new employee enters the public employment. The main determinant of this high commitment is the rigid application of the labor stability in public employment. Although in the majority of cases the hires are under modalities that do not contemplate stability (internships, self-employment, term-contracts, etc.), once incorporated, the workers’ pressure to remain prevails. What starts as a transitory job, in fact becomes a lifetime state job.

This mismanagement in human resources shows the inconsistencies of the rules that govern the state. To make a purchase of a good or a service for an amount of that magnitude, a call for public bidding is required, applying legality and pertinence controls, transparent and competitive methods and an appeal procedure. Appointing an employee, instead, even if it involves larger amounts can be done by a mere individual and arbitrary decision, without transparency and even less with public competitive methods. The problem is aggravated because working conditions in public employment are much more advantageous than in the private sector, so it is very tempting to use public employment as a way to distribute favors.

To reverse the bad practices in the management of human resources an important step would be mechanisms of transparency in the designations. As with the goods and services provider, the hiring of public employees should be publicly justified. Another important issue would be to tend to close the huge wage and working conditions gap with the private sector. Otherwise, the peoples’ pressure to be hired by the state is irresistible. But the most important point is to revise the practices that have denatured the concept of stability in public employment.

A simple and effective mechanism would be to establish that stability applies only to essential state positions. In these cases, access should be by a strict process of selection and those who occupy them should be subjected to rigorous performance evaluations. The rest of the designations should be extinguished automatically when the official who made them leaves office. In this way, there would be a professionalized body of public servants and positions for employees of the occasional official who would not remain in the state agencies. This would prevent public employment from growing in an alluvial manner.