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Despite the failure of a government-sponsored coup in FEDAP

Professionals excluded from CSS talks

by Joel Inwood and Eric Jackson

With just over one month remaining for the Social Security dialogue, several participants are calling for an extension. Among those with whom The Panama News was able to speak was Luis Chen González, the representative of the Federation of Professional Associations (FEDAP) who recently was denied his place at the dialogue table after an unsuccessful government-inspired coup.

On June 29 Chen was elected as the FEDAP representative for the dialogue. In a “letter to the country” by FEDAP president Angela Yanis, she said that Chen was chosen over rival Julio Zúñiga due to the latter’s participation in talks despite the decision by FEDAP not to do so until Law 17 was suspended.

As the dialogue proceeded Chen was aligned more closely with the National Front for the Defense of Social Security (FRENADESSO) than with the administration and its facilitator. Suddenly, by way of a mysterious Mr. Adames, $2,640 in cash was paid to cover the re-entry of eight groups that had ceased to pay dues or participate in FEDAP. Then a vote was held to elect a new representative for the dialogue table. It came out a tie, but dialogue facilitator Salvador Rodríguez chose to recognize Zúñiga as the official representative.

FEDAP held another election, and Chen was elected. When he returned to take his place at the dialogue Rodríguez refused to allow him or his delegation to enter. The delegation remained in front of the door to the building where the dialogue was being held in what Yanis describes as “peaceful protest.” Several of the corporate mainstream media, however, reported the story as a violent confrontation.

In a letter to The Panama News Chen said that “hope in the dialogue is lost because every day the government increases its manipulations.” Chen ads that there is only one way to fix the dialogue, and that is to: “one --- extend [it] for at least another 90 days, and two --- establish a real dialogue between the only two sides that have ever really existed: the government and the popular movement represented by FRENADESSO.”

FEDAP represents a different set of constituency than FRENADESSO, which is largely based upon the nation’s more militant labor unions. Thus the similar positions on many key issues between organized labor and the professional associations do not mean that FRENADESSO voices certain concerns that apply to the professionals.

Many of the professionals whom FEDAP represents actually work for somebody else, but for tax and liability purposes are treated on their employers’ books as independent contractors. The federation wants the law to look behind arbitrary and management-serving labels to look at economic realities and thus for purposes of the CSS treat the incomes of those who work for regular employers but who have been treated as independent contractors as if they were regular salaried employees.

Those FEDAP members who actually are self-employed insist that since the Panamanian Constitution prohibits any special tax on the professions the Law 17 provision that makes the self-employed contribute to the CSS without being eligible for retirement benefits is both illegal and unfair.

FEDAP would exempt those self-employed persons who make less than $9,000 per year --- most Panamanians who work for themselves --- from paying into Seguro Social, but then impose CSS taxes and afford the corresponding benefits on everything over $9,000 that a self-employed person makes. In that sense they are aligned with the general interest of small business.

However, a lot of business managers get paid partly in salary, which is subject to CSS deductions, and partly in “gastos de representacion” --- lump sums theoretically paid as expense accounts which have not previously been subject to social security deductions. On that issue FEDAP stands with the unions rather than the business groups and insists that all income be treated the same for CSS deduction purposes.

Public opinion polls indicate that the best-educated Panamanians --- by and large, FEDAP’s constituencies --- are among the strongest critics of Law 17. But now the particular concerns of this social sector, along with those of the bus drivers and many other groups, are excluded from what’s billed as a grand national dialogue.