Rightsizing Brazil’s Public-Sector Wage Bill
- ISBN-10
- 1484380444
- ISBN-13
- 9781484380444
- Category
- Business & Economics
- Pages
- 24
- Language
- English
- Published
- 2018-10-08
- Publisher
- International Monetary Fund
- Authors
- Mauricio Soto, Ms.Izabela Karpowicz
Description
Brazil’s public-sector wage bill is comparatively high. It grows inertially and competes with other spending. Rightsizing the wage bill could stimulate administrative efficiency and bring more equity into a system where public employees earn more than private in comparable professions. Most importantly, however, a reform is necessary to comply with the Federal government expenditure ceiling and the subnational fiscal responsibility rules. A reform should thus encompass all government levels, and all careers, and should aim to achieve a real decrease in salaries and lower employment. In the medium term, a review of the compensation structure should rationalize the multitude if wage grids, merge allowances into the base wage, and align public sector compensation to private wages in low-skilled professions.
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