Pak Lah just announced this morning that civil servants will get pay rise. If you are a civil servant what will you do:
1. Invest in “new investment fund” found in the internet
2. Buy a new Kancil replacement model
3. Pay yourself first
4. Say thank you by voting Barisan Nasional in the incoming general election
5. None of the above. I’ve suffered enough since petrol, toll and now Astro hikes!
5 Comments
i doubt my salary will go high up much. ermm i pity those who has salary below 1 k. hopefully EVERYBODY at least get above 1K. They will be less poor .
Pakdi: Well… there is only one BIG reason for this pay rise me think
aku pilih no.4 lah.. hehehe..
IF i am a civil servant: i’ll do no. 6: All of the above except no. 3. That’s whats I’ll do IF i am a CIVIL SERVANT.
Pakdi: Ha Ha Ha …
salam…i choose no 5…mmg suffered…
Pakdi: Well…
tanda-tanda besar PRU semakin hampir…huhu..
Pakdi: Ye ke?
Wednesday, May 09, 2007
Let Praise When Praise is Due.
In good time and about time. As they say never too late.
Its not debated and passed through in Parliament yet, but hey, this is a good start. I praise Pak Lah for making the announcement, its good politics.
This is monetary and fiscal expansion, because Govt has to print more money to do this, its not likeky to be financed solely from the country’s revenue (tax) and fiscal because its increases Govt expenditure.
Classic Keynesian expansion.
The resulting economic growth effect wouldnt be felt, provided that the quantum of pay rise is significant enough, wouldnt be felt until 12 to 18 month in the future. So dont expect to see a rise in inflationary expectation yet.
Why?
The lower income civil servants, the bottom of the food chain, has such a low income that they have to supplement by working other jobs.
Lets assume that the Govt give a pay rise of 40% for the lowest income. (The lowest payscale is RM450 a month) This might change the work-leisure behaviour of the worker affected in the longer term. Yet in the short term, nothing changes. In the immediate short term, extra money from pay rise would most likeky be used to pay debts. After that, the immediate needs, like better food and clothing, motorbike etc.
Only then this pay rise has economic impact on the country’s economic activity.
What if the pay rise is insignificant? Like 10% or 20%?
The euphoria might turn into anger, and the civil servants might as well campaign for the opposition in the next election.
If the de facto opposition leader, Anwar Ibrahim read this, he better come up with a much better economic manifesto.
E.g:
1. Pay rise for Govt servant at least 100% for the lowest income. (hey, thats only RM900 per month for 42? hour week) And maybe 10,8,5% for those already above RM900 a month.
2. Minimum wage law for those in the private sector.
3. Fiscal responsibility law for the Govt so that Govt wont be able to spend money on useless things.
4. Freeing up financial markets.
and a few other things.
Ijok has set a precedent, VOTERS need to be BRIBED!
Pakdi: Yup. Me prefer too minimum income scheme to be implemented and thank you for your long comment