Monday, March 24, 2008

The Cost of Currency Fluxuations on U.S. Diplomacy

The Skeptical Bureaucrat has a piece that is A News Story That is NOT About Obama's Passport!! The pay disparity in particular is not a new problem, but the falling dollar has exaccerbated it, and is precisely the reason why I would not bid on any western European posts at this point. I just can't afford it!

A News Story That is NOT About Obama's Passport!!

Let's hear it for The Washington Times! They ran a front page story Saturday about the mundane but very serious matter of unfavorable currency fluctuations and their impact on U.S. embassy operations. The dwindling purchasing power of the U.S. dollar is putting big stress on both facility and personnel costs overseas.

"The State Department is losing millions as a result of the free-falling dollar, forcing its overseas missions to lay off local staff, reduce energy consumption, put facility repairs on hold and cancel travel, officials said ... Several officials said the higher cost of maintaining existing facilities abroad reduces the funds available for renovations and new construction."

I can attest to the truth of that last sentence personally, since I'm grappling right now with an overseas construction project that will soon collapse - leaving about 50 State employees stuck in a highly vulnerable old building that we would love to vacate - unless someone can find a way to increase the project's budget by about one third to compensate our foreign contractor for the disappearing value of his dollar-denominated contract. (Of course, we can sue him if he defaults on his contract, but that won't get the new building finished.)

"Another major expense in foreign currency are the salaries of thousands of local employees at U.S. embassies and consulates. The first officer [interviewed] in Europe said that her salary is now lower than that of her assistant, who is a national of the host country. Still, the officer said that what the assistant makes is "below the salary level [it] should be to be competitive on the local market.”

That U.S.-vs-local salary disparity is not uncommon in the more costly countries, and not just with Foreign Service National employees (locally engaged staff), but also with contract security guards. A few years ago I visited a U.S. Foreign Commercial Service facility in a very expensive northern Italian city where it was pointed out to me that the highest-paid person there wasn't the senior Commercial Officer, but one of the security guards. That guard had a lot of seniority and worked his way up to the top pay grade, which, due to local living costs, was exorbitant by U.S. standards. I remember he was a very distinguished-looking gentleman who commuted to and from home in a custom suit that I'd guess cost in the $2,000 to $4,000 range, and changed into his guard uniform when he got to work.

1 comment:

Anonymous said...

Tell me about it. Not only am I feeling the pinch personally, but we've got the same issues here at post. It's darn hard finding anything in the dollar range that we're supposed to rent apartments for, especially when the dollar keeps going down.

Not to mention that State's budget this year is barely enough for basic operating costs...