Has benchmarking been a catalyst in our economic problems?

Hollyg'lightly

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

NewDubliner

Hollyg'lightly wrote: »

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

'Catalyst' is an appropriate word. Giving pay rises to the public sector was an essential component in channeling money to the property sector.

Now, the game has changed, the property sector has captured its wage-slaves, and the property/bank cartel are changing the rules.

P. Breathnach

Hollyg'lightly wrote: »

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

It didn't "cause our country to crumble", nor was it a major factor. But now that the property bubble has burst, and we are also suffering our share of the international economic problems, the appalling structure of our public finances has been exposed.

I'd guess (somebody else might have figures) that benchmarking might account for between €1bn and 2bn of our projected exchequer deficit. While that is an enormous amount, when we relate it to the other problems we face, it can seem like peanuts.

Diarmuid

It was a factor but not the major factor. But don't worry, The upcoming benchmarking (down) of wages will correct things.

Right?

Right?

Arnold Layne

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

dresden8

Anybody care to give us numbers or will all the usual prejudices be played out here?

Again.

Actual stats and figures like.

P. Breathnach

Diarmuid wrote: »

It was a factor but not the major factor. But don't worry, The upcoming benchmarking (down) of wages will correct things.

Right?

Right?

Wrong.

Wrong.

There seems to be no plan to benchmark again, even though many believe it would be a good idea. But I am sure that public service pay and pensions will be reduced in the budget. When combined with the "Pension Related Deduction" (that's what it's currently called) the total hit on the public sector will be greater than benchmarking, probably far greater.

And our problems won't be solved. Slightly alleviated.

[PS: And some of those who attack the public sector here still won't be satisfied.]

ardmacha

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

Did I miss a reversal of benchmarking pay awards? Was there a reverse benchmarking? I'll have to pay attention better.

Diarmuid

If you want facts and figures, they are here



Not that figures will make a differences to any sense of entitlements around here

NewDubliner

Arnold Layne wrote: »

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

It's no different to the way the banks won't countenance benchmarking of existing mortgage repayments.

Diarmuid

Here are some more facts and figures

The Economic and Social Research Institute has published a study which finds the pay gap between workers in the public and private sector is 26%.

Last month the ESRI came to a similar conclusion based on factors such as education and qualifications.

The Institute came up with largely the same result using a different methodology this time - job evaluations.

dresden8

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

And before Gurramok comes in to point out that the nett is only .4% or so I would like to point out that the 9% increase was also a gross figure to be reduced by tax, PRSI, pension levy et al. We can all play the gross nett game.

Remember, don't let these facts change your prejudices, that would mean you were wrong.

And we don't want that do we?

Diarmuid

NewDubliner wrote: »

It's no different to the way the banks won't countenance benchmarking of existing mortgage repayments.

"It's no different?" What cloud cuckoo land are you living in? Do you understand basic financial transactions?

NewDubliner

Diarmuid wrote: »

If you want facts and figures, they are here

According to the author:

Lest we forget the most obvious, in every year of the series, public sector workers were paid more per year than their private sector counterparts*......Public sector includes public administration and education, but excludes health. No data there for some reason. Private sector includes all sector apart from agriculture (again no data).

He did not compare like with like. For example he included low paid car salesmen and checkout assistants and excluded high paid self-employed in the private sector 'counterparts'.

NewDubliner

Diarmuid wrote: »

"It's no different?" What cloud cuckoo land are you living in? Do you understand basic financial transactions?

You mean that contracts with rich people cannot be broken but contracts with ordinary people can?

Diarmuid

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda

I don't see you factor in the value of the pension in your "calculations"?

dresden8

NewDubliner wrote: »

You mean that contracts with rich people cannot be broken but contracts with ordinary people can?

Bond holders and shareholders who gambled cannot lose their money but PAYE workers can go fnck themselves.

That's exactly what he means.

Sand

Simple answer, yes. It was a politically motivated buying of the unions and public sector voters. It was carried out on the back of unsustainable revenue generated from property transactions. It was'nt sustainable, but the unions didnt care where the money was coming from.

Now the gravy train is over and theyre furious. But they will only need to return to 2003 pay and conditions. Nothing too draconian.

dresden8

Diarmuid wrote: »

I don't see you factor in the value of the pension in your "calculations"?

You may recall the title of this thread concerns benchmarking.

If you want to comment on pensions there are several threads you can go into.

Excellent work on ignoring those numbers by the way. Well done.

That was a full on 100% ignoring of the facts and a changing of the subject in one fell swoop.

Masterclass.

Diarmuid

NewDubliner wrote: »

He did not compare like with like. For example he included low paid car salesmen and checkout assistants and excluded high paid self-employed in the private sector 'counterparts'.

The point of his article was

# As you can see, the gap has widened, not narrowed over the decade. In fact, in euro terms, it widened 8 years out of 10! And after the two years of greater private sector increases (prizes for eyesight if you can spot them on the graph), there were huge increases in public sector pay the following year.
# Public sector pay is at least five years ahead of private sector pay. What public servants earned in 2003 took their private sector counterparts until 2008 to earn (in fact, they’re not even there yet, another €500 or so to go!).

But of course you knew that which is why you ignored the ESRI study which I will quote again for you:

The Economic and Social Research Institute has published a study which finds the pay gap between workers in the public and private sector is 26%.

Last month the ESRI came to a similar conclusion based on factors such as education and qualifications.

The Institute came up with largely the same result using a different methodology this time - job evaluations.

Diarmuid

But at the end of the day, at least we can look forward to the leveling of the playing field over the next few years when the government cuts public sector wages. It's a done deal at this stage.

gurramok

Yes they were a catalyst, among a number of factors. One of the best social welfare rates in the EU is another.

Thing is, we never heard the unions at the time of benchmarking shouting stop, the money is too much.

Arnold Layne

gurramok wrote: »

Thing is, we never heard the unions at the time of benchmarking shouting stop, the money is too much.

They couldn't, the snouts of Begg, O'Connor, McLoone, et al , were too deep in the trough

namenotavailablE

At least we can look forward to the leveling of the playing field over the next few years when the government cuts public sector wages.

Do I detect a degree of schadenfreude in the above? It may be worth considering the following:

While it's extremely likely that public sector employeees will suffer significant pay-cuts in the immediate budget (and it's by no means clear that it will be a one-off cut- watch that space in 12 months- and try do a calculation of the Net Present Value of the foregone income over the lifespan of your remaining career), perhaps it's worth remembering that virtually EVERYONE suffers as a result of the lower spending which inevitably results- including pubs, cafés, clothes shops, cinemas, hotels, service industries etc etc.

Additionally, the impact is likely to be felt disproportionately in regions which are more reliant on public sector pay- the town in which I reside will almost certainly be very seriously hit as it has a weak and failing industrial base, a relatively low-end service sector (retail/ tourism/ relatively 'traditional' financial + legal businesses) and a sizeable level of public sector employment. As a public sector worker, I pity these private sector businesses as I and many of my colleagues have been making plans about what likely life-changes we'll be making when these cuts take effect- clearly a massive dollop of heretofore discretionary spending will be chopped.

We may all feel that things are not so good now but just wait until Brian Lenihan unleashes the hounds on Dec 9th.

eoinbn

Catalyst, no. Symptom, yes.

gurramok

namenotavailabl, thats a result of govt policy. Remember decentralisation?

Country towns only had construction, farming and public sector employment for opportunity.

The property bubble has destroyed this country. Its a classic example of greed over innovation and young people are suffering today because of it. http://www.rte.ie/news/2009/1112/primetime.html

namenotavailablE

Yes- I broadly agree with you, gurramok.

We will all spend much of the next generation trying to muddle our way out of the mess as we try to revert to a sustainable financial footing.

It won't be pretty. Expect further casualties....

ConsiderThis

namenotavailabl wrote: »

Yes- I broadly agree with you, gurramok.

We will all spend much of the next generation trying to muddle our way out of the mess as we try to revert to a sustainable financial footing.

It won't be pretty. Expect further casualties....

I seem to remember that also being said in the 1970's and 1980's. The problem seems to be that by the time the "next generation" comes along they'll continue to vote for the same political party which seems to always lead us to the same financial disaster, and we appear to learn nothing.

Count Dooku

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

And before Gurramok comes in to point out that the nett is only .4% or so I would like to point out that the 9% increase was also a gross figure to be reduced by tax, PRSI, pension levy et al. We can all play the gross nett game.

Remember, don't let these facts change your prejudices, that would mean you were wrong.

And we don't want that do we?

Benchmarking was only part of deal between public services and state
You forgot to mention that doesn’t matter how PS worker will work, he will get pay increase anyway

http://www.finfacts.ie/irelandbusinessnews/publish/article_10006397.shtml

Irish public service salaries have risen by 59% in the past five years and the payroll has expanded by 38,000 extra staff.

Increases in public sector over the period due to general rounds total €2,479m (or 24.3%), “special” pay increases (primarily Benchmarking) total €1,328m (or 13%), and other factors (such as extra numbers) total €2,193m (or 21.6%).

OMD

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

?

Where are you getting the figure that benchmarking increased the salary of the average public servant by 9%?

OMD

dresden8 wrote: »

You may recall the title of this thread concerns benchmarking.

If you want to comment on pensions there are several threads you can go into.

Excellent work on ignoring those numbers by the way. Well done.

That was a full on 100% ignoring of the facts and a changing of the subject in one fell swoop.

Masterclass.

He wasn't ignoring the figures. You said base 100. Benchmarking increased it to 109. Pension levy decreased it to 100.9

However pension base 50. Benchmarking increased it to 54.5. Pension levy did not lower pension at all. So even with your figures benchmarking and pension levy combined lead to an extra 0.9% pay increase (over and above all other pay increases) a 9% increase in your pension and a 9% increase in your tax free lump sum on retirement.

So well done you for ignoring the facts.

Masterclass.