Government's salary calculation for Lebanon's public sector: A raise today or a crisis tomorrow?

Report by Petra Abou Haidar, English adaptation by Yasmine Jaroudi

Public sector employees in Lebanon, including military personnel and civilian workers, say years of service to the state have left them facing a harsh reality: salaries that no longer provide a dignified living amid the country's prolonged economic crisis.

The situation reflects the broader hardship endured by most Lebanese since the 2019 financial collapse, which dealt a severe social blow to public sector workers in particular. While the state acknowledges the legitimacy of its demands, it says its fragile financial position prevents it from meeting them immediately.

Lebanon's public sector employs an estimated 330,000 people, including members of the armed forces, public school teachers, and civil servants. Any across-the-board salary adjustment for such a large workforce would require substantial funding.

According to rough estimates, a monthly increase of $100 per employee would cost the state nearly $400 million annually. Doubling that increase to $200 would raise the annual cost to around $800 million, excluding retirees' pensions.

Government officials and economic experts stress that the size of these figures does not mean salary increases are unjustified or impossible, but that they require time and careful planning. They point to past policy mistakes, notably the salary scale adjustment adopted before the crisis, which placed a heavy strain on the economy.

Poorly designed wage corrections could pose serious risks, including funding increases through broad-based taxes that would effectively offset employees' gains, eroding purchasing power rather than protecting it. Other concerns include renewed pressure on the exchange rate and rising inflation.

For this reason, the government has opted to delay immediate action rather than adopt what it sees as short-term fixes, arguing that caution is necessary to protect an economy still struggling to stabilize.

Officials insist the delay does not negate the legitimacy of public sector demands or rule out future increases. Instead, they say the goal is to introduce sustainable wage adjustments that will not be wiped out within months by inflation or renewed financial turmoil.

Economists argue that the state's responsibility now lies in identifying funding sources that do not disproportionately burden low-income earners. Proposed options include improving tax collection, introducing progressive wealth taxes, and addressing long-standing sources of waste and mismanagement.

The government has requested additional time until the end of February to present a clear plan for salary adjustments, hoping to strike a balance between protecting public sector workers and avoiding another economic shock for the country.