Public sector workers have recently faced considerable criticism regarding their mounting debts, particularly involving credit cards and hire-purchase agreements, which often exceed one-third of their salary.
This situation diminishes their take-home pay, potentially leaving them with inadequate funds to cope with the ever-rising cost of living. Consequently, many public servants may resort to moonlighting, leading to reduced productivity and efficiency in the workplace.
More alarmingly, this financial strain may tempt some into corrupt practices, contributing to the staggering RM277 billion of corruption recorded over the last five years.
Various proposals have emerged to address this issue. Some advocate for strict controls on borrowing, ensuring that take-home pay amounts to at least sixty per cent of total income after deducting debt payments.
Others suggest increasing salaries to match market rates, a measure the government is contemplating by year-end.
While implementing controls on public servants' take-home pay may seem prudent, it's not the optimal approach. The government's primary responsibility, like any other employer, is not to regulate employees' spending but to ensure their ability to deliver expected goods and services effectively.
Similarly, merely raising salaries won't suffice if financial literacy and prudent financial management aren't promoted among public workers. Without addressing these root causes, debt issues will persist.
So, what's the solution? It's essential to ensure that all workers, regardless of sector, receive fair market wages.
However, given the public sector's tradition of offering lower salaries compensated by robust retirement plans and benefits, adjusting wages poses a significant financial burden.
With around 1.3 million public workers (excluding the police and armed forces), aligning salaries with market rates could cost the government billions annually.
In the long term, as the 20th-century economist Keynes famously remarked, "In the long run, everything is possible."
Thus, we must contemplate reducing the public sector workforce and enhancing efficiency through AI, IoT, and automation. This approach would enable the government to pay market-value wages while mitigating financial strain.
Moreover, embracing AI and automation can revolutionize sectors like education, reducing workloads and enhancing productivity. For instance, adopting online learning platforms in the education sector can significantly reduce the need for personnel.
Additionally, it's worth noting that approximately 600,000 public workers are employed in the education sector, encompassing both primary and secondary education as well as higher education institutions.
This sizable workforce underscores the potential for significant impact through the adoption of AI and automation to streamline educational processes and reduce staffing requirements.
Similarly, automating processes for services such as passport issuance and driving license applications can streamline operations with minimal human intervention.
An illustrative example can be found in the banking industry, where the majority of transactions are now conducted online and through machines, leading to the redundancy of many banking personnel.
And, granting government ministries autonomy in staffing decisions, based on allocated budgets and revenue generation targets, mirrors practices in many developed nations and developed nations.
Absolutely, addressing the issue of low take-home income among public workers necessitates a holistic approach and robust political will.
While increasing wages or imposing borrowing restrictions may provide short-term relief, long-term solutions entail reducing the workforce through automation and enhancing efficiency through autonomy.
This ensures that all public workers receive market wages commensurate with their productivity and efficiency.
The writer is a professor at the Arshad Ayub Graduate Business School, Universiti Teknologi Mara (UiTM). He can be reached at tanpe325@uitm.edu.my