Wages in Lebanon have suffered a decline exceeding 35% since the onset of the financial and economic crisis in October 2019, leaving citizens unable to afford the most basic necessities of life. Bechara Asmar, president of the General Labor Union, points out that the fate of salaries in both the public and private sectors will be addressed in light of the increase in the exchange rate of the dollar to 15,000 lira at the beginning of February. He emphasizes that an agreement was reached with economic organizations to raise wages, transportation allowances, school grants, and family compensations when the dollar was at 36,000 lira, and today it has exceeded 52,000 lira. There is a need to revisit wage realities concerning the rising dollar exchange rate, in addition to the customs dollar which is set at 15,000 lira, impacting prices and goods, although the Ministry of Finance claims that essential food commodities are exempt.
Asmar continues in an interview with MTV, stating that the rising costs affect everything, including fuel, medicine, and import fees. He expresses the need to reassess wages in the private sector based on two principles: the increased dollar exchange rate and the customs dollar increase, and the same applies to the public sector. He mentions that there was an agreement with caretaker Prime Minister Najib Mikati and Finance Minister Youssef Khalil to adopt two basic salaries for every single salary. This agreement was established when the dollar was around 32,000 or 33,000 lira; however, with the current rate around 52,000 lira, a reassessment of salaries in the public sector and military sectors is also required.
He adds that this reality has been discussed with Mikati in the government palace regarding the need to reconsider wages and transportation in both sectors and to integrate what is known as social assistance into the salary base. The Prime Minister was positive, awaiting the Finance and Labor Ministers to hold an expanded meeting with relevant parties in the public sector to reassess wages and issue the necessary decrees for the private sector based on agreements made in the index committee expeditiously, allowing the 450,000 employees registered with social security in the private sector to benefit from these increases. There have been agreements with economic organizations to resume meetings between the union, organizations, and the Ministry of Labor starting February 1 to reevaluate the economic reality amid the continuous rise in the dollar exchange rate.
Regarding increases in transportation allowances and minimum wages, Asmar notes that "without a fixed exchange rate for the dollar, all increases will amount to nothing, and we are racing against time. With the ongoing rise in the dollar's value, the increases we decide on are diminishing day by day." He mentions that they set the transportation allowance based on the price of a fuel barrel equating to 700,000 lira, proposing an allowance of 125,000 lira, while currently, a barrel costs about 900,000 lira, questioning how employees are expected to travel to work. One of the proposals discussed with Mikati includes giving a transportation allowance for military sectors, which has been set at 1,800,000 lira monthly, with a suggestion to raise it to 2,500,000 lira for each military personnel.
On possible solutions to the crisis, he states that there can be no resolution for the salaries or their supplements amid the ongoing rise of the dollar. Day by day, salaries and employees' purchasing power continue to erode. The solution can only come from stabilizing the dollar exchange rate, which cannot happen amid the intense political struggles the country is experiencing. He calls for a political respite to pave the way for economic calm and to generate short, medium, and long-term plans of the size of an economic recovery plan, insisting that the existing reform plans in the Parliament need to be implemented. Furthermore, restructuring banks, studying financial conditions, capital controls, fighting corruption, and other proposed laws must be executed in cooperation with international bodies and donor countries to begin overcoming the significant crisis they face.
He concludes by expressing hope for the beginning of a solution and emphasizes that the starting point is the constitutional entitlement of electing a president, which is seen as a pathway to forming a new government and executive authority capable of handling major responsibilities during this challenging period. He advocates for a coalition to produce and pass the reform laws, along with dialogues with international entities, the World Bank, the International Monetary Fund, donor entities, and restoring relations with Arab countries and Gulf states.
Finally, he warns that "there are no limits to the collapse if we continue on this path of negligence in taking responsibility over the three years since the crisis began."
