Public sector pay: the wrong debate

potlatch

I'm beginning to tire of the 'debate' on public versus private wages. Most people are simply looking at it the wrong way round.

People working in the private sector shouldn't be complaining about public sector workers. They should be complaining about employers' refusal to provide the same good pay, job security and employment conditions in the private sector as those in the public sector.

An OECD study confirmed that the Irish private sector is not a high wage economy compared to the EU-15. Some public sector workers earn very high salaries, but most (low-grade civil servants, public service workers [bus drivers, bin men, etc.]) don't earn that much.

As the economy boomed, Ireland became more unequal. More and more of the wealth generated by workers went to bosses and investors while employees have had to accept less and less. We're being told to work harder, but the Irish Competitiveness Council found Irish SMEs to be very badly managed.

I think the nation's been brainwashed. Private sector workers need to take employers on for a fair deal like those in the public sector.

If only there were organisations that could campaign for better working conditions for employees...

optocynic

I'm in the private sector, and I have been very well treated by my employers.

I'm gonna take a leap here, and say you are in the Public Sector... either that or a Union rep.

Public sector pay cuts have to happen... at the higher levels especially!
It is not the wrong debate... it is the right debate.. one of the many right debates.

You want to minimise profits, tax success, and basically scare off investors and entrepeneurs!!

Socialist, and obtuse!

gamblor1975

Have you seen todays Indo? 25% in the difference when compared to private sector. We are trying to regain some of our competitiveness compared to other countries and you think pay rises to the private sector are the way to go?

The Govt. needs to address public sector pay including Nurses,teachers and gardai but should really start at the top. They should not be allowed to set their own renumeration, its a joke.

We need to start getting value for money from our public sector which we are not at the moment. This report will give the govt. the ammo it needs to drop the wages but what we really need is reform so that the Public S behaves more like the private sector with regard to work practices and giving managers the tools they need to sort the wheat from the chaff.

I really hope this govt. dosn't bottle it with the PS unions!

cavedave

potlatch*

An OECD study confirmed that the Irish private sector is not a high wage economy compared to the EU-15. Some public sector workers earn very high salaries, but most (low-grade civil servants, public service workers [bus drivers, bin men, etc.]) don't earn that much.

I an most people in the private sector are not just competing with other workers in Europe. I work for a large multinational like many. This multinational has workers doing the same job in America, Ireland, India, China and Japan. This is not a low skill job. The engineers in India and China earn a fraction of what the American, Japanese and Irish earn.

It is naive to think that we can just increase our wages and not have jobs go to India and China. It is immoral to not allow Chinese and Indian people try to advance themselves and get what is for them a very good job.

optocynic

cavedave wrote: »

I an most people in the private sector are not just competing with other workers in Europe. I work for a large multinational like many. This multinational has workers doing the same job in America, Ireland, India, China and Japan. This is not a low skill job. The engineers in India and China earn a fraction of what the American, Japanese and Irish earn.

It is naive to think that we can just increase our wages and not have jobs go to India and China. It is immoral to not allow Chinese and Indian people try to advance themselves and get what is for them a very good job.

That is exactly what needs to be said..

But we all know, the unions have FAR too much pull with the panderers in the Government who shake at the kness at the mere mention of a strike.

Have we not learned that we need to stand strong against the Unions?

Cuiusvis hominis est errare; nullius nisi insipientis in errore perseverare

potlatch

The National Economic and Social Forum/Council produced a paper years ago cogently arguing that MNCs relocate when wages for certain kinds of jobs become more expensive. Manufacturing jobs give way to high-tech and third sector jobs. It also powerfully argued that MNCs will continue to stay in countries with valuable endowments, for example: English-speaking, proximity to large markets, levels of health and education, transport and ICT infrastructure, economic and political stability, etc. It would be costly for MNCs to leave enabling environments such as these.

The paper also argued that small, trade-open economies require large welfare states to offset the social damage caused by this market requirement for 'flexibility'. One mid-way solution touted by the Danes is 'flexicurity'.

But the point I made is a political one as much as an economic one: all citizens deserve to be treated fairly and to live with dignity. This requires much better employment terms and standards, many of which prevail in the state and semi-state sector.

Fixing the payroll is certainly an issue in the short term. But in the medium- to long-term, we need to consider the socio-economic conditions (prevailing in other European countries) that increase quality of life, security and productivity.

SLUSK

Can you tell me of any other country where public sector employees on average earn more than in the private sector?

optocynic

potlatch wrote: »

The National Economic and Social Forum/Council produced a paper years ago cogently arguing that MNCs relocate when wages for certain kinds of jobs become more expensive. Manufacturing jobs give way to high-tech and third sector jobs. It also powerfully argued that MNCs will continue to stay in countries with valuable endowments, for example: English-speaking, proximity to large markets, levels of health and education, transport and ICT infrastructure, economic and political stability, etc. It would be costly for MNCs to leave enabling environments such as these.

You just described India!

potlatch wrote: »

The paper also argued that small, trade-open economies require large welfare states to offset the social damage caused by this market requirement for 'flexibility'. One mid-way solution touted by the Danes is 'flexicurity'.

But the point I made is a political one as much as an economic one: all citizens deserve to be treated fairly and to live with dignity. This requires much better employment terms and standards, many of which prevail in the state and semi-state sector.

Fixing the payroll is certainly an issue in the short term. But in the medium- to long-term, we need to consider the socio-economic conditions (prevailing in other European countries) that increase quality of life, security and productivity.

What better employment terms do the Public Sector workers need?
- Guaranteed Pension
- Annual Increase (regardless of performance)
- No accountability

gamblor1975

That quote is not mine!

spank_inferno

I think the OP makes a fair point.

We are all being taken for a ride in this country by those at the top with their snouts in the trough (& that goes for the trade union leaders too).

But thats not to say the gap between public & private sectors is acceptable at all.

optocynic

spank_inferno wrote: »

I think the OP makes a fair point.

We are all being taken for a ride in this country by those at the top with their snouts in the trough (& that goes for the trade union leaders too).

But thats not to say the gap between public & private sectors is acceptable at all.

I find that to be a sometimes valid, but also one sided opinion.
What about the plumbers, tilers, etc. that were charging outragous fees for simple jobs during the boom?

We have chancers at all layers of this society. To say it is only 'those at the top' is populist and obtuse.

I know plenty of people at the top who have integrity, and whilst they wish to make money and be successful, do do not want to do it at the expense of others.

cavedave

There is an interesting thread here on how much debt we are getting into. It puts the figure at 190 billion euro. Which to pay the interest on is about 3000 euro for each tax payer a year.

Meanwhile in India a software engineer earns a bit under 5000 euro.

I agree with potlatch that there is much more to hiring someone then just their wages. But still 40K in Ireland Versus 5 k in India (according to here). And now that Irish earner also has to pay 3000 euro interest on a debt?

But the point I made is a political one as much as an economic one: all citizens deserve to be treated fairly and to live with dignity. This requires much better employment terms and standards, many of which prevail in the state and semi-state sector.

I cannot argue with this point about what citizens deserve. However politics eventually has to accept the reality of an economic situation.

partyguinness

potlatch wrote: »

I'm beginning to tire of the 'debate' on public versus private wages. Most people are simply looking at it the wrong way round.

People working in the private sector shouldn't be complaining about public sector workers. They should be complaining about employers' refusal to provide the same good pay, job security and employment conditions in the private sector as those in the public sector.

An OECD study confirmed that the Irish private sector is not a high wage economy compared to the EU-15. Some public sector workers earn very high salaries, but most (low-grade civil servants, public service workers [bus drivers, bin men, etc.]) don't earn that much.

As the economy boomed, Ireland became more unequal. More and more of the wealth generated by workers went to bosses and investors while employees have had to accept less and less. We're being told to work harder, but the Irish Competitiveness Council found Irish SMEs to be very badly managed.

I think the nation's been brainwashed. Private sector workers need to take employers on for a fair deal like those in the public sector.

If only there were organisations that could campaign for better working conditions for employees...

Oh dear...where do I start.:rolleyes: This is worng on so many levels..and who pays for all this. Thats where the public sector just dont get it.

Unlike the private sector, the public sector does not generate profit or income.

Remeber the public purse (filled by private sector taxes) pays for the public sector.

To suggest that the private sector sld demand more money is naive in the extreme.

As for the badly managed SME, they will either sink or swim.

As for the badly managed publuic sector, sure who cares...the public finances will bail them out. No initiative whatsoever.

In fact that statement is so retarded I am not even going to bother trying to debate with the person who wrote it.

murphaph

Anyone who thinks Ireland is a low-cost/low wage economy needs their head examined. Come to Germany-NO MINIMUM WAGE at all here! People work for €400 a month and it's legal. Not moral IMO, but legal! And this is a perceived "high cost economy".

In Germany when your year I unemployment benefit runs out you step down to ALGII (€351 oer month plus rent paid in a SMALL apartment for a single person). That's all you get.

It encourages people to work that's for sure!

Irish people need to understand something-the standard of living to which we became accustomed (everyone believed they should own a 3 bed semi and two newish cars) was much more than most of their european neighbours would ever expect. Ireland never had a right to such wealth as the country did not and still does not produce (indiginously) things that the world wants. All Ireland does is host FDI and now that is too expensive there so it's game over unless costs fall dramatically and/or Ireland starts to develop true indiginous high value industry, like Finland for example.

It goes without saying that the public sector is way overpaid, even at the lower levels, in comparison to our european neighbours.

Thinkingaboutit

Banksters not public sector workers, are the problem.

mcloughj

Was always amused by economic experts appearing in the media saying 'high public sector pay' and 'recession' or 'economic meltdown' in the same sentence but never actually saying the two were linked.

And it was said so often that everyone started to believe the public sector caused the economic crisis.

Very Bush administration linking Iraq and 9/11 without actually saying it for definite.

partyguinness

mcloughj wrote: »

Was always amused by economic experts appearing in the media saying 'high public sector pay' and 'recession' or 'economic meltdown' in the same sentence but never actually saying the two were linked.

And it was said so often that everyone started to believe the public sector caused the economic crisis.

Very Bush administration linking Iraq and 9/11 without actually saying it for definite.

I have heard my friends in the public sector say this.

"Oh its not our fault, we are just being used as scapegoats blah blah etc etc."

They are right it's not their fault. Nobody is saying that it is..FFS:rolleyes:. I have heard nobody saying otherwise except the..public sector.

They equate wage cuts with "Lets blame the public sector"

The crux of the Public sector wages debate is that the Gov has reduced income and needs to cut spending.

Very simple.

brianthebard

murphaph wrote: »

Anyone who thinks Ireland is a low-cost/low wage economy needs their head examined. Come to Germany-NO MINIMUM WAGE at all here! People work for €400 a month and it's legal. Not moral IMO, but legal! And this is a perceived "high cost economy".

In Germany when your year I unemployment benefit runs out you step down to ALGII (€351 oer month plus rent paid in a SMALL apartment for a single person). That's all you get.

It encourages people to work that's for sure!

Does it? Is that why there are 3.4million people unemployed in Germany? Can you prove in some substantial way your assertions?

the_syco

potlatch wrote: »

They should be complaining about employers' refusal to provide the same good pay

If the employer of the company thought it was paying too much to it's employees in Ireland,, they can f**k off to somewhere where it's cheaper, as Dell did.

The public sector can demand more money, and their employers will give it to them.

potlatch wrote: »

job security and employment conditions in the private sector as those in the public sector.

In the private sector, unless people buy their stuff, jobs can be lost. In the public sector, jobs aren't lost if they're doing a sh|t job, it seems.

murphaph

brianthebard wrote: »

Does it? Is that why there are 3.4million people unemployed in Germany? Can you prove in some substantial way your assertions?

Do you think if people received more generous social welfare payments that they would be more or less inclined to work. Answer that and you've answered your own question.

I personally know people here who work in very low paid jobs rather than rely on 351 quid a month. It's sort of well, obvious.

Germany has disparate regional problems, particularly in the east which go way deeper than social welfare issues-11 million people live in a part of Germany where the infrastructure was left to disintegrate over 50 years and where no industry could compete with western processes when the wall fell. Go to Munich or Stuttgart however and unemployment is substantially lower than Ireland. Germany is much more regionally diverse in this regard and the East (sadly) pulls the german unemployment figure right up. It will take many decades to overcome the failures of the GDR.

If you took the East away Germany would have a healthy unemployment rate and remember before the current worldwide crisis, Germany's economy was rebounding and unemployment (even in the east) was falling. These measures of hardcore cuts in social welfare spending are a relatively recent invention and are controversial (google Harz IV) but they were having an impact.

My own gut feeling is that Germany will recover well once the worldwide credit crisis is on the retreat. We'll see though.

jimmmy

mcloughj wrote: »

Was always amused by economic experts appearing in the media saying 'high public sector pay' and 'recession' or 'economic meltdown' in the same sentence but never actually saying the two were linked.

And it was said so often that everyone started to believe the public sector caused the economic crisis.

The people at the top in charge were all paid by the govt, and will receive their high pensions.

The politicians who made the decisions, the central banks, the regulator etc. If all of these had acted properly we would have had no bubble / crisis. And its not as if they were not well paid....they were amongst the highest paid in the world. Whats making the crisis worse is the high level of govt spending, partly on the highest paid govt employees ( + retired employees ) in the known world.

optocynic

partyguinness wrote: »

The crux of the Public sector wages debate is that the Gov has reduced income and needs to cut spending.

Very simple.

The crux of the problem is the social partnership joke.. and the bullying, petulant tactics of the Union's.

Kama

As has been frequently repeated, you cannot run a public service on market principles, unless you want the guards to behave like the clampers and milk you for revenue.

This is not to say the public service cannot or does not need to be reformed, just that the market-model doesn't transfer, or if it does it functions perversely. If you introduce target-driven incentives systems, they, rather than the task itself, become prioritized; we can see this in New Labour reforms.

The crux of the Public sector wages debate is that the Gov has reduced income and needs to cut spending.

Very simple.

The alternate to this cyclical position is that this is precisely when the government needs to increase spending, create jobs, invest in infrastructure, and generally apply a stimulus. The problem with the deflationist approach is that the economy will keep shrinking the more you keep slashing, with decreasing revenues. There's more feedback system, less linear accounting exercise.

That being said, I'm fully in support of wage cuts at the managerial end; as an ex-PS worker the 'Indian' ratio is too low. But the overpaid wages of managerials are emergent from mapping to...you guessed it, inflated managerial costs in the private sector, which have been INCREASING even during the current economic decline:



Now, the voices cheering for 'competitiveness' are studiously inattentive to this factor of the cost base; IBEC's turkeys do not vote for Christmas, their shrill denunciation of public sector wages seems as much to distract from the overpaid privilege of their 'union members' or to forward an ideological agenda than any real concern with competitiveness.

FlutterinBantam

optocynic wrote: »

I'm in the private sector, and I have been very well treated by my employers.

I'm gonna take a leap here, and say you are in the Public Sector... either that or a Union rep.

Public sector pay cuts have to happen... at the higher levels especially!
It is not the wrong debate... it is the right debate.. one of the many right debates.

You want to minimise profits, tax success, and basically scare off investors and entrepeneurs!!

Socialist, and obtuse!

Excellent post.

Does this person not realise that there is an economy out there ?

This is typical Union bulldust which bears no relation to reality and the situation we are in.
All you will get are the champagne socialists who refuse to take risks, refuse to reward risk, the same people who bed themselves into Public Sector and semi state jobs and proceed to rot the place from within.

Place is full of 'em unfortunately.

gerry28

Oh dear...where do I start. This is worng on so many levels..and who pays for all this. Thats where the public sector just dont get it.

I see this quite often on boards... as if we have to answer to the private sector because thay pay the tax.

We are a society - I answer to the government and so do you. Wealth generated from taxing the private sector (for the privilage of operating in ths country) is used to pay for essential services.

We are not an optional extra - we are an integral part of society.

optocynic

Kama wrote: »

As has been frequently repeated, you cannot run a public service on market principles, unless you want the guards to behave like the clampers and milk you for revenue.

And the don't do this already with their strategically placed speed traps on every major, straight and well lit road in Dublin, but none on the dark winding, narrow roads of the other counties, where most of the deaths happen??

Kama wrote: »

This is not to say the public service cannot or does not need to be reformed, just that the market-model doesn't transfer, or if it does it functions perversely. If you introduce target-driven incentives systems, they, rather than the task itself, become prioritized; we can see this in New Labour reforms.

I would personally like to see target driven reforms in the PS. How can we say if it will work or not? Try it. I bet it will increase the level of service we PAY for. It will also weed out the work-dodgers, of which there are a few. Your clairvoince of the target driven scenario failure is amazing... now, look into your crystal ball and tell me Wednesdays winning lottery numbers

Kama wrote: »

The alternate to this cyclical position is that this is precisely when the government needs to increase spending, create jobs, invest in infrastructure, and generally apply a stimulus. The problem with the deflationist approach is that the economy will keep shrinking the more you keep slashing, with decreasing revenues. There's more feedback system, less linear accounting exercise.

That being said, I'm fully in support of wage cuts at the managerial end; as an ex-PS worker the 'Indian' ratio is too low. But the overpaid wages of managerials are emergent from mapping to...you guessed it, inflated managerial costs in the private sector, which have been INCREASING even during the current economic decline:



Now, the voices cheering for 'competitiveness' are studiously inattentive to this factor of the cost base; IBEC's turkeys do not vote for Christmas, their shrill denunciation of public sector wages seems as much to distract from the overpaid privilege of their 'union members' or to forward an ideological agenda than any real concern with competitiveness.

I can't argue with the problems of managerial cost in the PS. Benchmarking PS with market driven, pro-active, entrepeneurial, risk-rewarding private business is apples and oranges...

mcloughj

partyguinness wrote: »

Nobody is saying that it is..FFS:rolleyes:

That was exactly my point. Nobody is saying it is... directly. But it suits certain groups to make it seem like it is the public services fault.

so FFS :rolleyes: right back at ya.

Kama

I see this quite often on boards... as if we have to answer to the private sector because thay pay the tax.

Who pays the piper, calls the tune, I'm afraid. The public sector does indeed need to be answerable to the taxpayer for producing value, avoiding this fact does the public service no credit. The correct answer imho is to show the value created, and why this value of public goods cannot be effectively produced by the private sector, rather than claim not to be answerable.

optocynic

gerry28 wrote: »

I see this quite often on boards... as if we have to answer to the private sector because thay pay the tax.

We are a society - I answer to the government and so do you. Wealth generated from taxing the private sector (for the privilage of operating in ths country) is used to pay for essential services.

We are not an optional extra - we are an integral part of society.

I think the Government should answer to us!
Does everyone else agree??

asdasd

I personally know people here who work in very low paid jobs rather than rely on 351 quid a month. It's sort of well, obvious.

Even though I actually think that Ireland's social welfare payments are too high, particularly for those who haven't paid in, your point here is clearly invalid.

You said that low social welfare reduces the unemplyment rate. It was pointed out that Germany has high unemplyment, and has had it for years. So your point is disporven unless you can prove that other factors outweight the supposed advantgage of low welfare payments.

optocynic

asdasd wrote: »

Even though I actually think that Ireland's social welfare payments are too high, particularly for those who haven't paid in, your point here is clearly invalid.

You said that low social welfare reduces the unemplyment rate. It was pointed out that Germany has high unemplyment, and has had it for years. So your point is disporven unless you can prove that other factors outweight the supposed advantgage of low welfare payments.

The Population of Germany is just over 82million.
with 3.4 million unemployed
This is 4.2%

Now look at the Irish numbers!