Iraqis Are Out of Jobs, but Payday Still Comes
By EDMUND L. ANDREWS
BAGHDAD, Iraq, June 8 ? It was payday on Saturday at Iraq's state-owned irrigation company. But there was not a hint of work in sight.
"Nobody has asked us to do anything in weeks," said Mahmoud Hameed, a geologist who had come only to pick up his pay. "We are all just waiting to see when the real work begins."
Two months after American forces seized control of Iraq, American officials now find themselves approving salaries for hundreds of thousands of no-show and no-work jobs.
With American blessings, the Iraqi government is paying full salaries to at least 200,000 employees at government ministries and the country's huge but moribund government-owned companies.
Mechanics linger listlessly around machines that do not run. Clerks and secretaries wait for assignments that never come. And many others do not show up at all, except on payday.
In the absence of other sources of jobs, American officials are reluctantly relying on the same kind of featherbedding invoked by moribund Communist-era conglomerates in Russia and Central Europe.
"This is going to continue for a good while," said one senior American official for the Coalition Provisional Authority, the United States-led administration in Iraq. "Nobody is going to quibble about paying a few more dinars into this economy to get things moving."
There are no job statistics in the confusion of postwar Iraq. But Iraqi and foreign experts alike estimate that at least one-third of the work force is either unemployed or underemployed.
When the United States Army offered to pay people about $5 a day to help haul garbage and repair schools, at least one job site last week was mobbed by more than a thousand laborers.
Job desperation is evident on the streets of any major city. Despite widespread warnings about hucksters who pose as job recruiters, thousands of Iraqis continue to pay 25 cents to $1 apiece just to fill out job applications from street vendors who claim to have contacts at American companies.
The joblessness is likely to worsen. At least 100,000 Iraqi soldiers and civilians, from battle-scarred lieutenants to mess-hall cooks, were thrown out of work last month when American administrators dissolved the Ministries of Defense and Information.
American officials estimate that as many as 250,000 people work for government-owned companies and civilian government ministries, and most of those jobs currently involve little or no work.
Most of Iraq's civilian ministries are still only minimally functional, damaged by bombing during the war and emptied by looters afterward.
Iraq's state-owned businesses employ 96,000 workers and produce goods ranging from electrical motors and plastics to packaged foods and clothing.
An additional 60,000 people worked for Iraq's military-industrial companies, which used to produce weapons, as well as commercial products like machine tools and iron-casting equipment.
Most of those companies, military and civilian alike, are producing nothing at all. The few that have resumed operations, according to both Americans and Iraqis, are producing at a small fraction of their full capacity.
The hidden unemployment poses a number of challenges for Americans trying to rebuild Iraq.
On one hand, the state-owned companies represent what many American officials see as the worst of an insular Socialist economy: antiquated, bloated, incapable of innovation and shielded from competition. To that end, American officials are mapping out a plan to sell off the state-owned companies to private investors as soon as possible.
At the same time, American officials are even more worried about aggravating Iraqi unemployment at a time when Iraqis are already seething with resentment about street violence and electricity shortages.
So at least for the moment, American officials are seeking peace through no-show jobs.
The strategy is on display at scores of different enterprises, from the State Company for Vegetable Oil and Soaps to the State Company for the Electrical Industry.
The vegetable oil company has restarted several lines of soaps, but it is now competing against a flood of new imports from Egypt, Iran and Europe.
Of 3,900 employees, the vegetable oil company is employing only 250 people at the moment. And even if the other factories all resume operation, company officials estimate they need only 40 percent of their current work force.
Iraq's hidden unemployment was particularly visible at the state electrical company, which makes lighting equipment and motors for air-cooling systems.
Of 3,100 employees at two major factory complexes, company officials say, about 10 percent are actually working right now.
On Saturday, the company reinstituted a six-day workweek at its main plant in Baghdad. But the official workday lasted only four hours, from 8 a.m. to noon, and many workers began leaving as soon as they had signed in.
Many of those who remained basked in the morning sun in the courtyard between factory buildings, in a scene that could have been mistaken for social gatherings at a downtown park.
"It's better to be here than just to stay at home," said Anees Ali, a maintenance engineer who was chatting with about a dozen other colleagues. "Where else is there to go? We don't have a choice."
Under a new salary plan hammered out with help from American advisers, wages at the electric company range from 100,000 dinars a month, or about $70, to 500,000 a month for the director general.
The technical manager for the electric company, Khalis al-Asadi, said it needed time before it could be competitive.
"If you rush into the private sector quickly, it would come as quite a shock," he said.
At other state-owned companies, most workers do not even bother to show up, because the factories have not yet recovered from the bombing and looting.
"I haven't even given it a thought," said Anwar Jamil, who has worked for two years at a government-owned plastics company and who recently picked up his salary of 200,000 dinars, about $140.
Employees at both the government-owned companies and at ministries routinely express confidence that everybody will keep their jobs and their salaries.
"They created the problem," said Mr. Jamil, referring to the Americans as he sipped tea on Friday at a cafe in Baghdad's book market. "They should solve it."
American and Iraqi officials quietly warn that employees like Mr. Jamil are in for a shock.
A senior American official who has been mapping strategy for Iraq's state-owned companies said on Saturday that the occupying authority was hoping to agree on a strategy for privatization within the next few weeks.
"Once it starts," the official added, "It could happen quickly."
It may already be starting. At the state-owned company for irrigation, where idle employees received their first pay in two months today, a top administrator said the officials at the Ministry of Irrigation had told him he had just two months to cover his costs.
"Any requests for water wells, any requests anywhere, we will do it," he said. "But we aren't getting any requests."
By EDMUND L. ANDREWS
BAGHDAD, Iraq, June 8 ? It was payday on Saturday at Iraq's state-owned irrigation company. But there was not a hint of work in sight.
"Nobody has asked us to do anything in weeks," said Mahmoud Hameed, a geologist who had come only to pick up his pay. "We are all just waiting to see when the real work begins."
Two months after American forces seized control of Iraq, American officials now find themselves approving salaries for hundreds of thousands of no-show and no-work jobs.
With American blessings, the Iraqi government is paying full salaries to at least 200,000 employees at government ministries and the country's huge but moribund government-owned companies.
Mechanics linger listlessly around machines that do not run. Clerks and secretaries wait for assignments that never come. And many others do not show up at all, except on payday.
In the absence of other sources of jobs, American officials are reluctantly relying on the same kind of featherbedding invoked by moribund Communist-era conglomerates in Russia and Central Europe.
"This is going to continue for a good while," said one senior American official for the Coalition Provisional Authority, the United States-led administration in Iraq. "Nobody is going to quibble about paying a few more dinars into this economy to get things moving."
There are no job statistics in the confusion of postwar Iraq. But Iraqi and foreign experts alike estimate that at least one-third of the work force is either unemployed or underemployed.
When the United States Army offered to pay people about $5 a day to help haul garbage and repair schools, at least one job site last week was mobbed by more than a thousand laborers.
Job desperation is evident on the streets of any major city. Despite widespread warnings about hucksters who pose as job recruiters, thousands of Iraqis continue to pay 25 cents to $1 apiece just to fill out job applications from street vendors who claim to have contacts at American companies.
The joblessness is likely to worsen. At least 100,000 Iraqi soldiers and civilians, from battle-scarred lieutenants to mess-hall cooks, were thrown out of work last month when American administrators dissolved the Ministries of Defense and Information.
American officials estimate that as many as 250,000 people work for government-owned companies and civilian government ministries, and most of those jobs currently involve little or no work.
Most of Iraq's civilian ministries are still only minimally functional, damaged by bombing during the war and emptied by looters afterward.
Iraq's state-owned businesses employ 96,000 workers and produce goods ranging from electrical motors and plastics to packaged foods and clothing.
An additional 60,000 people worked for Iraq's military-industrial companies, which used to produce weapons, as well as commercial products like machine tools and iron-casting equipment.
Most of those companies, military and civilian alike, are producing nothing at all. The few that have resumed operations, according to both Americans and Iraqis, are producing at a small fraction of their full capacity.
The hidden unemployment poses a number of challenges for Americans trying to rebuild Iraq.
On one hand, the state-owned companies represent what many American officials see as the worst of an insular Socialist economy: antiquated, bloated, incapable of innovation and shielded from competition. To that end, American officials are mapping out a plan to sell off the state-owned companies to private investors as soon as possible.
At the same time, American officials are even more worried about aggravating Iraqi unemployment at a time when Iraqis are already seething with resentment about street violence and electricity shortages.
So at least for the moment, American officials are seeking peace through no-show jobs.
The strategy is on display at scores of different enterprises, from the State Company for Vegetable Oil and Soaps to the State Company for the Electrical Industry.
The vegetable oil company has restarted several lines of soaps, but it is now competing against a flood of new imports from Egypt, Iran and Europe.
Of 3,900 employees, the vegetable oil company is employing only 250 people at the moment. And even if the other factories all resume operation, company officials estimate they need only 40 percent of their current work force.
Iraq's hidden unemployment was particularly visible at the state electrical company, which makes lighting equipment and motors for air-cooling systems.
Of 3,100 employees at two major factory complexes, company officials say, about 10 percent are actually working right now.
On Saturday, the company reinstituted a six-day workweek at its main plant in Baghdad. But the official workday lasted only four hours, from 8 a.m. to noon, and many workers began leaving as soon as they had signed in.
Many of those who remained basked in the morning sun in the courtyard between factory buildings, in a scene that could have been mistaken for social gatherings at a downtown park.
"It's better to be here than just to stay at home," said Anees Ali, a maintenance engineer who was chatting with about a dozen other colleagues. "Where else is there to go? We don't have a choice."
Under a new salary plan hammered out with help from American advisers, wages at the electric company range from 100,000 dinars a month, or about $70, to 500,000 a month for the director general.
The technical manager for the electric company, Khalis al-Asadi, said it needed time before it could be competitive.
"If you rush into the private sector quickly, it would come as quite a shock," he said.
At other state-owned companies, most workers do not even bother to show up, because the factories have not yet recovered from the bombing and looting.
"I haven't even given it a thought," said Anwar Jamil, who has worked for two years at a government-owned plastics company and who recently picked up his salary of 200,000 dinars, about $140.
Employees at both the government-owned companies and at ministries routinely express confidence that everybody will keep their jobs and their salaries.
"They created the problem," said Mr. Jamil, referring to the Americans as he sipped tea on Friday at a cafe in Baghdad's book market. "They should solve it."
American and Iraqi officials quietly warn that employees like Mr. Jamil are in for a shock.
A senior American official who has been mapping strategy for Iraq's state-owned companies said on Saturday that the occupying authority was hoping to agree on a strategy for privatization within the next few weeks.
"Once it starts," the official added, "It could happen quickly."
It may already be starting. At the state-owned company for irrigation, where idle employees received their first pay in two months today, a top administrator said the officials at the Ministry of Irrigation had told him he had just two months to cover his costs.
"Any requests for water wells, any requests anywhere, we will do it," he said. "But we aren't getting any requests."
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