Problem

Excessive salaries of international civil servants

Other Names:
High costs of staff in intergovernmental organizations
Disproportionate privileges for staff of intergovernmental organizations
Official perks in intergovernmental organizations
Nature:

Secretariats of some intergovernmental organizations and their agencies offer higher salaries than in equivalent private or public sector positions. For expatriates, in addition, there may be excessive cost-of-living differential allowances, paid tuition for children's private schooling, excessive home leave and holidays, and income tax advantages not offset by salary adjustments downwards. Typically staff will have access to subsidized catering and subsidized stores, whilst at the same time benefiting from special discounts in public stores. These or other perquisites and benefits add to the deficits that have to be made up by membership contributions.

Incidence:

The salaries and privileges in individual organizations, whether the United Nations or regional organizations, are the subject of comparative studies by the respective staff unions. This results in a constant upward pressure on benefits. This is most evident whenever the salaries of a new intergovernmental institution are negotiated.

In the mid-1980s, according to the United Nations Staff Union in New York, and the USA International Civil Service Commission, UN Secretariat base salaries alone were higher by 22% than private comparable scales in the USA. Also since civil service pay in the USA is 18% lower than the private sector, UN base pay was 40% higher than the civil service in the USA. Taking the 22% figure, to this may be added benefits of the type indicated. The UN New York pattern ranged from at least 25% higher in salary and benefits than the private sector and as much as 50% higher, in some instances, than the average national USA civil servant scales. Within the UN system a practice known as "double dipping" allows officials, especially at the highest level, to retire on a pension and then to be re-employed at generous consultancy rates to supplement their pensions.

The World Bank group has an annual administrative budget of US$1.6 billion. This exceeds new financial aid given annually by the World Bank to developing countries such as Sudan, Cameroon and Senegal. Tax free salaries and benefits for nearly 10,000 economists and officials account for an estimated two thirds of administrative expenditure which increased by 15% for 1993. Top executives have salaries of US$190,000, with 19 vice-presidents earning US$165,000. Benefits include free return flights to families holidaying in their home countries with supplements of US$1,070 or more; annual grants of up to US$3,500 for spouses and US$600 for each child; payment of up to 75% of school fees, including boarding; relocation allowances equivalent to one month's salary, repeated on departure. Until recently bank staff all travelled first class; in 1993 4O% of IMF staff continued to do so.

The EEC/EU secretariat salaries in Brussels, including similar benefits for expatriates as noted above, were also in the range of 50% higher than comparable private sector salaries, as for example, on the secretariat level. A German report on staff costs of the EEC/EU European Monetary Institute established in 1994 reviewed the range of privileges. For example the salary of a courier at the European Patent Office in Munich was 91% higher than one at the national German Patent Office next door. EEC/EU employees are guaranteed non-termination and retirement benefits not available in private industry. Household supplements of 5% on basic salaries (with a minimum of BF 6,180, approx. US$200) were given to every head of household, irrespective of the nature of the household. This was the case for 13,331 EEC/EU officials sharing an apartment with someone. For each child or person for whose upkeep the official is responsible, the EEC/EU pays BF 7,959 per month (approx. US$250), which as a child allowance extends to the age of 26. An educational supplement of BF 7,113 (approx. US$225) per month is given for any child regularly attending a full-time educational establishment, with no requirement of proof of costs (in the interests of more efficient administration). If the child studies at a university more than 50KM away from the work place of the official, this is doubled. There is a further supplement of 16% on basic salary (with a minimum of FB 14,219, approx. US$450) for disadvantages associated with changing domicile in starting service in an EEC/EU office, namely most of those employed. However this relocation allowance continues until retirement. Families are entitled to reimbursement for home-leave once a year without proof of the actual costs or whether travel took place. This covers business class travel by plane, or first class travel by train. Two trips are permitted per year if the distance is greater than 725 km. The 16,017 officials claiming this allowance in 1992 were reimbursed for 60,593 trips. In 1992 the EEC/EU devoted 10% of its administrative budget to salary supplements and special payments. There have been many comments on the the extent to which EEC/EU officials are obliged to seek early retirement for health reasons. In 1992, 1941 employees some way from pensionable age retired from service and and were immediately entitled to a pension as though they had worked until 65. The number of genuine pensioners in 1992 was only 2,564.

Claim:

It is incongruous that those concerned with the societal development issues raised in the agendas of such international bodies should take such inflated salaries and benefits.

Counter Claim:

Workers overseas are always paid higher whether embassy guards, construction labourers, diplomats or businessmen. It is partly incentive and partly just compensation for the separation from homeland, friends, family and institutions.

Problem Type:
E: Emanations of other problems
Date of last update
16.01.2018 – 18:26 CET