Public Pay Talks - see mod warning post 4293

Taking your own example consider two employees:

Employee A: Earns 30k per year

Employee B: Earns 60k per year (i.e. double Employee A)

Scenario: Both are given a 1k increase every year for 100 years.*

After 100 years, Employee A is on 130k and Employee B is on 160k i.e. they have maintained the 30k gap. Hence, you are valuing Employee B as approximately 23% more valuable than Employee A. While Employee B has maintained the 30k gap, the value of that gap has diminished over the 100 years. The additional workload and responsibilities of Employee B are valued as less and less each year. Assuming inflation has an effect, the 30k is also worth less after 100 years.

Consider the second scenario:

Scenario: Both are given a 1% pay increase every year. After 100 years, Employee A is on 80k and Employee B is on 160k i.e. you have maintained the ratio by applying a percentage pay increase year on year. Employee B is valued as twice as important as Employee A.

While applying a fixed increase across all pay scales seems like a fair and reasonable argument on paper. It is flawed. In the vast majority of cases, the cost of living for Employee B will be far higher than that of Employee A. This can be as simple as a more expensive house and mortgage, a more expensive car and loan, or buying Uncle Bens rice over Tesco Value. Hence, a 10% rise in inflation does not affect all workers equally. The ECB have raised interest rates by 0.5%, this will proportionally affect all workers equally (in theory). Hence, wages should also increase proportionally due to inflation and not by a set amount. A percentage increase maintains the gap, it doesn't increase or decrease it.

Should the floor be raise and the ceiling lowered? Yes, I think the wealth gap should be reduced but that is a completely different argument for a different thread.

*Ignore the fact that both workers would be long dead. Consider their rate of pay for the role. Also ignore and steps on the ladder, promotion etc. The scenario is really comparing the evolution of pay of Point 1 on Scale A and Point 1 on Scale B.

If inflation is 10% and everyone gets a 10% pay rise, everybody is in the same boat as before. If inflation is 10% and everyone gets a 1k pay rise, everybody is in a different boat than before.

I agree it is more nuanced than the black and white argument I make above. Percentage pay increases make far more sense than fixed amounts and, for the reasons outlined above, we do it that way. The argument above demonstrates why a fixed amount increase makes no sense.

It is also being ignored that if I get a 10% pay increase, I pay the higher rate of tax on that. If someone on the lower end gets a pay increase, they are only paying the lower rate of tax i.e. they get more money in their pocket. So yes, percentage pay increases do help out the lower end more than the higher end.

Perks...?

Someone else was arguing a fixed amount increase so I kinda just lumped it onto my point. I think graded percentage raises are incredibly complicated and difficult to negotiate but I have no inherent objection to them.

Not perks

Trade-offs for lower salary, yes

What's your take on Sinn fein being more unreasonable than the current crowd?

They'll have conflict between unions vs public opinion when it comes to Public sector.

I agree, once the budget comes, the Unions hand is weaker. Couple that with people turning back on their Gas and getting heating bills, the willingness to strike and lose pay decreases as well. I'd expect them to be able to strike a deal pre-budget and I think it is in everyone's interest to do so.

I'd prolly take 5% this year and 5% next year (so 10% overall) if offered but if my rep recommended strike, I'd vote to strike. Ultimately, the percentage increase won't have a massive effect for me.

Where do their votes come from and what to their voters want. I'd love to see the demographics of this.