Government proposes raising S/23 per month to the state

Despite the ideological divorce between President Dina Boluarte and her predecessor, Pedro Castillo, the head of State continues with the collective bargaining plan to improve the income received by public sector workers, which materialized—after almost four decades of wait—in the mandate of the Cajamarcan professor who is today in preventive detention for the self-coup perpetrated in December 2022.

For the collective bargaining process, to be sealed no later than June 30, 2024 – to apply from 2025 -, The fiscal space for all levels amounts to S/300 million, according to the Ministry of Economy and Finance. However, the MEF’s bet would barely mean an average increase of S/23 per month—or S/282 per year.

How many workers will it reach? How much will they receive?

Let’s go in parts. In total, it is estimated that the remuneration increase will reach 1 million 64,015 public employees. It is necessary to remember that there are three levels of collective bargaining: centralized, decentralized by sector and decentralized by public entity.

In the centralized system, there are workers from regimes 276, 728 (those in the private scheme in the State), civil service and workers in special penitentiary and diplomatic careers, as well as the CAS. Here, the MEF proposes a fiscal space of S/188 million 529,614 for 436,252 people. On average, each of the workers, dispersed among the three levels of Government, would receive a remuneration improvement of S/432 in annual terms – or S/36 monthly.

In the decentralized sector, it is made up exclusively of health and education professionals: that is, doctors, technologists, nurses, and university and school teachers. There will be 627,763 beneficiaries with resources reaching S/74 million 99,585: an average of S/9.83 per month —or S/118 per year.

While at the decentralized level by public entity we find the workers of the centralized one, but with economic or complementary benefits specific to their entity. The MEF for this group proposes S/37 million 370,800: S/100 per year – or S/8.3 per month.

It is worth noting that workers in public companies are outside this fiscal space, and they negotiate under private rules in the budget framework of the Fonafe.

General discontent

According to a source close to La República, these S/300 million in total are the starting point, and it will most likely grow. For example, in 2022, the MEF proposed a similar figure and ended up close to S/900 million. It will depend on the negotiating capacity of the unions to achieve improvements. It cannot be interpreted as a limit, he adds, but public sector workers are already expressing their rejection of the first shelving.

The National Confederation of State Workers of Peru (Confetep) maintains that the fiscal space approved by the portfolio led by José Arista Arbildo is insufficient, and that is why they will hold a sit-in tomorrow, June 10, outside the MEF to express their voice of rejection.

And from the Unified National Federation of Health Sector Workers (Fenutssa) they maintain that the Government of Dina Boluarte is mocking the state workers and they will prepare “a forceful response”: 48-hour national strike on June 12 and 13, since, for example, the CAS will have an increase of S/36 per month and the DL administrative workers 276, S/34 monthly in its new single consolidated amount (MUC).

“The proposed increase of between S/23 and S/33 per worker is laughable. It’s a slap in the face. They say (about the Government) that we are in crisis, but we have not created that crisis, but rather them with their inability,” José Sandoval, spokesperson for the Peruvian State Workers Front (FTEP), told La República.

According to the union leader, whenever there was an economic boom, the governments never wanted to establish increases in the public sector and only with Law 31188 did they manage to force them to have a fiscal space to negotiate. Sanvodal comments that a real increase of S/230 per month is key to recovering purchasing power.

Fiscal impact of collective bargaining

In 2022, for example, An increase of S/130.8 per month was established in the MUC for DL ​​276 workers with an additional 13% pensionable; as well as S/840 for the servers of DL 728, CAS, Servir, penitentiary and diplomatic, in addition to an exceptional bonus of S/550. For 2023, an increase of S/100 per month was agreed for workers at the centralized level and a bonus of S/600.

Both agreements generated a fiscal impact of S/514 million and S/809 million, respectively, and by 2025 it is estimated that the expense would generate a fiscal impact of S/1,102 million.

The great contradiction of Boluarte management

For public sector workers, President Dina Boluarte proposes a very small increase – according to the complaints recorded in this report – but in the list of legislative powers sent to Congress she seeks to spend up to S/375 million annually for the transition to the Service regime Civil of public managers in the entities of the Executive BranchThere is a differential cost of up to S/2,523 million annually to finance the transit of career civil servants and complementary activities.

“This transit has not been done in 14 years and now they want to do it in 6 months. They want to put their people there. In the questioning to Minister Arista we will ask that this point be addressed,” questioned Sandoval.

A historical review

Approach. Fernando Cuadros Luque, former vice minister of Employment Promotion

The state collective bargaining law was approved in 2021 and was regulated during Pedro Francke’s management in the MEF, hand in hand with the state union confederations. This will be the third year of general collective bargaining on economic matters in the State. Before, it only occurred in practice for private public companies and for teachers and doctors due to the relevance they have, but the vast majority of workers were left aside, whose improvements were obstructed.

In 2022 and 2023, collective agreements were achieved with general remuneration and economic improvements for state workers. It should not be lost sight of that the MEF establishes fiscal space that can grow during collective bargaining. Likewise, budget viability must be respected, since it is not about affecting the capacity of the fiscal fund with unfulfillable increases. In the centralized space, the increase that we will see this year will be complemented at the decentralized level by entity: if a salary increase plus a bonus is given, at the decentralized level by entity the same will not be agreed, but rather other improvements such as a bonus for productivity or performance.

This negotiation can last as long as necessary, but, according to the law, so that what was agreed on economic matters begins to apply from January 1, 2025, The centralized agreement must be closed by June 30 of this year and the decentralized ones a few days later. After that date, if there is no economic agreement, the improvement, if any, would apply from 2026.