Slashing Public Sector Pay

beeno67

Head The Wall wrote: »

Let me dumb it down more for you and the two PS guys that don't understand it either

Pension levy - your salary decreases as you now have to contribute more to your pension, you pay tax on the decreased salary and receive tax relief on this as it is a pension

You simply don't understand pensions. You say "you pay tax on the decreased salary and receive tax relief on it as it is a pension". This is not the way pensions work. You pay less tax on the decreased salary , that is the pension relief. There is no second relief. In fact the levy is worse than a pay cut in some regards. If your pay is cut you obviously pay not tax on the cut. When pay is reduced by the pension levy you pay no tax on it but you do pay the universal social charge.
Obviously this applies to private sector too.

Head The Wall

I added the text in bold, the rest is what is quoted by another poster. I have no problem understanding the difference between a pension contribution and a straight paycut.

See the post by Welease above who explains it better.

Either way it's still not a paycut.

angelfire9

Vizzy wrote: »

Afraid the CSO disagree with you on this,they have stated that the average public servant earns €47 K and this caters for all grades ages etc
As I have said there are people on more than this and many on less but on average they all earn €47 K
You cant on the one hand use averages in relation to the level of pay in the public sector and then disregard the average because it suits your argument in relation to pensions.

Can I point out for the second time on this thread that the CSO figure of €47k that you are all so fond of quoting is from 2008 PRE the 2009 PAY CUT

Tiered pay cuts for public servants - 5% on the first €30,000 of salary, 7.5% reduction on the next €40,000 and 10% on the next €55,000 of salary

And as regards the PS pensions:

Public servants' pensions to be linked to average salary across career, rather than final salary

deise blue

Head The Wall wrote: »

I added the text in bold, the rest is what is quoted by another poster. I have no problem understanding the difference between a pension contribution and a straight paycut.

See the post by Welease above who explains it better.

Either way it's still not a paycut.

Now let me dumb it down for you !

Any unilateral reduction in net pay is a pay cut .

Welease

deise blue wrote: »

Now let me dumb it down for you !

Any unilateral reduction in net pay is a pay cut .

That depends on your definition of a "pay cut".. and you guys don't agree on that definition, so this thread and others will continue to go nowhere in that respect..

Some people are defining "pay cuts" in terms of their take home pay (net).. and some people are defining "pay cuts" in terms of their salary (gross) or total compensation package.. they are not the same thing.

Neither is right or wrong..

gigino

angelfire9 wrote: »

Can I point out for the second time on this thread that the CSO figure of €47k that you are all so fond of quoting is from 2008 PRE the 2009 PAY CUT

You are incorrect there. A few years ago average public sector pay was a few grand higher than the 47k. The 47k per year is the central statistics office ( and they should know ) latest statistic.

www.cso.ie

doncarlos

Head The Wall wrote: »

Let me dumb it down more for you and the two PS guys that don't understand it either

Less money in my pocket = paycut

Doesn't matter to me if it's taken out net or gross to be honest.

Drumpot

Ok, heres a few facts.

• The public sector pensions are not being fully funded by their members contributions.
• The state currently cannot afford to fund itself.
• During the boomtime, the public service Unions demanded to be a part of the Boom, but now in the downturn thinks it should be subsidised by everybody else

The ignorance been shown on both sides of these debates (every time there is one) is astounding.

I dont blame any public servant for giving out or defending their position in terms of remuneration and I imagine were I in their position I would feel equally aggrieved. However, it is for this very reason why they are unable to see the forrest from the tree's. Do any of them actually realise the debts that face this country ?

I just want to pull a few people up on some things. I think Social welfare (as a recipient of it), should be reduced, but I must point out that taking for example 1billion out of social welfare peoples pockets as opposed to taking 1 billion out of Public servants pockets would have a far more damaging effect on the economy. People on social welfare spend most, if not all of their income within a month of receiving it. Im sure people have examples of joe Schmuk down the road who is living it up on the state, but these are exceptions and do not represent the majority of people getting social welfare.

A big problem is that people who say "I can barely afford to get by" are not really budgeting properly, particularly if they take even 1 holiday a year or they go out more then once in a month. So many people annoy me when they talk of how tough they are finding it, yet they havent even done a family budget or cut back on most of the things they dont need. The less money you have, the easier it is to see where its going. If myself and my wife were getting €47,000, we would be living like kings. Some people speak of this salary as if its a pitance. If your mortgage is sapping your salary, why should your employer have to keep your salary up to subsidise it ?

I dont take offence with people looking to defend themselves against cuts. I take offence with people who think that their employer shouldnt cut their wages because the dont think they can afford the cuts because your employer can squeeze the taxpayer to subsidise your lifestyle. I also take offence when people even remotely try to justify the public service pension in comparison to the private one with absolutely no idea of what they are talking about (in terms of cost to fund either one). I also take offence to people who on one hand think that because they signed a contract , it means that their job and pension should be safe, once again, because their employer has the taxpayers to fall back on. For nearly everybody else in the private sector, your employer will pay you what they can afford, your pension will rise or fall depending on where you invest it and the terms of your contract can only be guaranteed while your employer is successful.

Degsy

Double or triple corporationtax..make the multinationals and the mercenaries working for them pay thier way...actually the govt will in fact end up doing this.

angelfire9

gigino wrote: »

You are incorrect there. A few years ago average public sector pay was a few grand higher than the 47k. The 47k per year is the central statistics office ( and they should know ) latest statistic.

www.cso.ie

The latest statistic from the CSO for PS pay is from 2008 unless you can provide a proper link as opposed to a link from the CSO home page? :rolleyes:

OMD

angelfire9 wrote: »

The latest statistic from the CSO for PS pay is from 2008 unless you can provide a proper link as opposed to a link from the CSO home page? :rolleyes:

You are the one who keeps saying he is wrong. It is up to you to prove it. Simply saying that's wrong doesn't really help.
As you can see from link the rates of pay quoted are from 2010. Average pay for public sector is €47,467.68 Why not simply check a fact before you make a song and dance about it:rolleyes::rolleyes:

http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf

dvpower

doncarlos wrote: »

Less money in my pocket = paycut

Doesn't matter to me if it's taken out net or gross to be honest.

Eh?
If taxes go up, is it a paycut?
If prices go up, is that a paycut?

gigino

angelfire9 wrote: »

The latest statistic from the CSO for PS pay is from 2008 unless you can provide a proper link as opposed to a link from the CSO home page? :rolleyes:

If you go through the cso home page you can find plenty of info.

Latest statistics from the CSO are from 2010.
http://www.cso.ie/releasespublications/documents/earnings/2010/earnlabcosts_q12010.pdf

I know in an ideal world they would have 2011 statistics, but what with holidays and stress leave and sickies ts hard to get the work done.

Someone else verified the 47k statistic from the CSO by dividing the amount of government expenditure on public sector wages by the number employed there. Not rocket science you know..

WalterMitty

gigino wrote: »

If you go through the cso home page you can find plenty of info.

Latest statistics from the CSO are from 2010.
http://www.cso.ie/releasespublications/documents/earnings/2010/earnlabcosts_q12010.pdf

I know in an ideal world they would have 2011 statistics, but what with holidays and stress leave and sickies ts hard to get the work done.

Someone else verified the 47k statistic from the CSO by dividing the amount of government expenditure on public sector wages by the number employed there. Not rocket science you know..

And the 47k average is for a shorter average week and doesnt include the value of pension entitlement accrued during given working year.
Also why does it take the CSO so long to produce census results?

deise blue

gigino wrote: »

If you go through the cso home page you can find plenty of info.

Latest statistics from the CSO are from 2010.
http://www.cso.ie/releasespublications/documents/earnings/2010/earnlabcosts_q12010.pdf

I know in an ideal world they would have 2011 statistics, but what with holidays and stress leave and sickies ts hard to get the work done.

Someone else verified the 47k statistic from the CSO by dividing the amount of government expenditure on public sector wages by the number employed there. Not rocket science you know..

You should read the notes contained in the link you posted.

These notes state that the statistics do not include the pension levy /pay cut imposed on March 2009 .

Laminations

gigino wrote: »

Someone else verified the 47k statistic from the CSO by dividing the amount of government expenditure on public sector wages by the number employed there. Not rocket science you know..

Clearly not rocket science. Not even good basic stats.
A company employs 10 people.

2 on €200,000
8 on €10,000

Total wage bill €480,000
Average based on your silly sums €48,000

€48,000?? Rich bastards, cut all their wages!!

sollar

Drumpot wrote: »

Ok, I dont take offence with people looking to defend themselves against cuts. I take offence with people who think that their employer shouldnt cut their wages because the dont think they can afford the cuts because your employer can squeeze the taxpayer to subsidise your lifestyle.

Do you not realise that any tax, PRSI or USC increases hit public servants also. There is no tax that you pay that will not affect me also.

deise blue

OMD wrote: »

You are the one who keeps saying he is wrong. It is up to you to prove it. Simply saying that's wrong doesn't really help.
As you can see from link the rates of pay quoted are from 2010. Average pay for public sector is €47,467.68 Why not simply check a fact before you make a song and dance about it:rolleyes::rolleyes:

http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf

Again the notes to this link state that the calculations do not include the pension levy/pay cut imposed in March 2009.

Laminations

I made the argument months ago (but rather than average wage I should have used median wage, or some combination of both) that anyone in the PS above the median wage should take a pay cut of (insert appropriate figure here)% of what they earn above that median. That would mean avergae wages would drop and you would get wage compression and less outliers in the upper tail in the wage distribution. I think it is the fairest way to do it. It protects low paid workers and anyone who is getting cut is already paid above the median

gigino

Laminations wrote: »

Clearly not rocket science. Not even good basic stats.
A company employs 10 people.

2 on €200,000
8 on €10,000

Total wage bill €480,000
Average based on your silly sums €48,000

an average is an average

In your "silly" example above, 20% of the workforce are on an average salary which is 20 times the average salary of the other 80% of the workforce. Are you suggesting this is the case in the public service too ?

Clearly anyway we can agree on one thing : the wages at the top need to be slashed first + most.

Laminations

gigino wrote: »

an average is an average

In your "silly" example above, 20% of the workforce are on an average salary which is 20 times the average salary of the other 80% of the workforce. Are you suggesting this is the case in the public service too ?

Clearly anyway we can agree on one thing : the wages at the top need to be slashed first + most.

The wages at the top do need to be cut first but not indiscriminately. I dont mind paying weel in exchange for getting a good job done, put we are indeed broke and our ability to pay is reduced. Show me the distribution of wages within the PS (and include semi-states too) and I'll entertain an argument about cutting simply based on an average figure.

sarumite

sollar wrote: »

Do you not realise that any tax, PRSI or USC increases hit public servants also. There is no tax that you pay that will not affect me also.

Thats true. Although if taxes are being increased to maintain public expenditure, then those who benefit from such expenditure are somewhat buffered compared to not increasing taxes and reducing public expenditure.

gigino

Laminations wrote: »

. Show me the distribution of wages within the PS (and include semi-states too) and I'll entertain an argument about cutting simply based on an average figure.

Thats been gone in to before on different threads. Average salary figures for various sections of the p.s. are on the cso website. Semi states are even higher. ..was'n the ESB 90 or 95k ? ......it was listed on the front pages of all the main newspapers there a few weeks ago, as well as on this site. Where have you been ?

n.b. In your "silly" example above, 20% of the workforce are on an average salary which is 20 times the average salary of the other 80% of the workforce. Are you suggesting this is the case in the public service too ?

Laminations

I asked pages ago if someone could furnish the mean, median and mode wage in the public sector. This would go some way towards determining wage distribution. Better yet if someone has a histogram of the numbers employed under various wage brackets, that'd be useful

Laminations

gigino wrote: »

Thats been gone in to before on different threads. Average salary figures for various sections of the p.s. are on the cso website. Semi states are even higher. ..was'n the ESB 90 or 95k ? ......it was listed on the front pages of all the main newspapers there a few weeks ago, as well as on this site. Where have you been ?

n.b. In your "silly" example above, 20% of the workforce are on an average salary which is 20 times the average salary of the other 80% of the workforce. Are you suggesting this is the case in the public service too ?

Missing my point. I'm not looking for the wage disparity in the average wage across different sectors of the PS. I'm looking for wage distributions. The number of people at each level of pay, or short of this, the mode figure. The pay grade most PS workers are on. In all your examples above you are still working off averages that can easily paint an inaccurate picture due to skewed distributions

NB my example was a hypothetical demonstration of how averages can be misleading. It wasn't a suggestion on how wages are structured in the PS.

gigino

Laminations wrote: »

I asked pages ago if someone could furnish the mean, median and mode wage in the public sector.

I asked the c.s.o., ...I guess in an ideal world they would have all the statistics, but what with holidays and stress leave and sickies its hard for them to do everything....email them yourself, the more people wake them up the better

donalg1

44% of public service workers earn under €30k per year and this was before the USC and Pension Levy, so cut them by 30% and they will then more than likely default on their mortgage, but they could apply for Mortgage Interest Supplement to make up the difference, they could be entitled to a medical card after a means test, so free medical expenses for them, plus they may be entitled to FIS, all this happens without taking into account the amount of money small business' would lose as a result in the cutting of wages of 200,000 people, local economies would be even more screwed than they are now.

To quote a spokeswoman for small business's "our businesses have suffered so its time the Public Service took a cut too" this was at the time they were facing their third pay cut of five they have had now in two and half years. I wonder how her business is doing now that the majority of Public Service workers have no money to spend in small business in their towns?

OMD

donalg1 wrote: »

44% of public service workers earn under €30k per year

Link please

Brussels Sprout

Out of a matter of interest do any people who aren't public sector workers or are married to public sectors ever come out in support of public sector workers in these kind of threads?

Laminations

donalg1 wrote: »

44% of public service workers earn under €30k per year and this was before the USC and Pension Levy,

Thanks for that figure.
Doing ****e box, back of the napkin, assumptionist mathematics which seem to be acceptable in this debate

I'll round off the 44% to 4 out of 10.
If 4 out of 10 have an average of €30k (then the total for the 4 would be €120k) then the other 6 out of 10 would need an average of €60k (totalling €360k) to get you to an overall average of €48k.

So one average is double the other. Thats how messed up your figures can get from using averages. We need to see a wage distribution chart