Public sector pay freeze for top 40,000 public servants announced
I agree the public sector is overstaffed.
I agree some people in the public sector are on ridiculously high salaries.
I do not agree that all people in the public sector are overpaid.
I do not agree that all people in the private sector are taking pay cuts or losing their jobs.
Using all that as a starting point I agree we should stop fighting with each other and try and find a fair solution to our problem.
I agree some people in the public sector are on ridiculously high salaries.
I do not agree that all people in the public sector are overpaid.
I do not agree that all people in the private sector are taking pay cuts or losing their jobs.
Using all that as a starting point I agree we should stop fighting with each other and try and find a fair solution to our problem.
And there was I thinking it was a simple question.
BTW I agree with your points above but that's not the issue.
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Well if you're going to act like Miriam O'C, I'm going to act like the Minister.
Well Miriam, I'm glad you asked me that question, blah, blah, blah.
Let's look at the facts. Substantial cuts have already been to public sector personnel and to public sector pay. Many contract positions have already been cut, and those that haven't won't be renewed. For example, one local authority that I'm aware of has had their health & safety team cut from five to one. So one person is now responsible for ensuring health & safety of every set of roadworks in the county, and every local authority depot and building. So now they are paying outside consultants to carry out workstation assessments that would previously have been done in-house for a fraction of the cost.
The rush to cut public salaries is misguided. This will take considerable amounts of money out of the economy with substantial downstream effects and push many more people onto the dole.
Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part. The public sector is ready to be part of the solution, but it is not going to be the sole, soft target for cuts.
Acknowledging that pay increases granted in inflationary times should be reversed in deflationary times is not tantamount to dumping employment protections.
From other posts you seem to be in the school of economics that justified pay raises against the increased housing costs of the last decade. Please show some consistency in the light of increased affordability.
We live in a high cost economy simply because we bought into the 'pay us more because costs of living are increasing' mantra. Well we lost the run of ourselves collectively and got into a vicious circle of wage inflation that has been every bit as damaging as the banking scandals.
There is no moral authority for anyone to berate the banks and builders if they show no willingness to accept the action needed on addressing the current budget deficit arising from unsustainably high public spending
Works out nicely for you that the solution to all our fiscal problems is to pump money into the economy through high wages and high consumption of public servants. If that's your economic view then why not instead increase the dole, as social welfare will have a higher multiplier impact
Sole target? 200,000 people have lost their jobs. Political action is needed to address public spending and that is why it is being constantly debated. Market forces will dictate non public sector wages.
I'm sure the public service is doing a good job but we just can't afford the wage levels
If I, in a private company, take a pay cut how does that reduce the government deficit?
I have no problem paying more tax, as I have stated many times, but reducing wages in the private sector doesn't help reduce state borrowing. It will make the country more competitive in the medium term but we're screwed in the short term if we don't get the borrowing sorted out.
The above quote neatly encapsulates the main arguments emanating from those who disagree with public sector pay cuts. Let's deal with them one by one;
1. Will a public sector pay cut take " considerable amounts of money out of the economy"? Yes of course it will. But it is borrowed money. We are borrowing lots of money and we are mortgaging our children's future to have this money in the economy. We know that wide-scale pay cuts reduce the size of the economy. We must do this if it is our "least-worst" option. I think we have no choice but to do it. But perhaps we, as a nation, will make a different choice. I hope not.
2. Will a public sector pay cut push "many more people onto the dole". I don't know. Certainly, it won't push any public sector employees onto the dole. Those who sell goods and services to the public sector ( and to the employees of the public sector) will of course see their businesses suffer. So yes - it will produce higher unemployment.
3. "Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part." Here is where the serious disagreement starts. I am sorry to be blunt but it is just nonsense to suggest that the public sector has 'done its part'. Out here in Reality Land, many people are coping with downturns of 30-50% in business and resultant downturns of 40-60% in their income. Employees are facing 20% pay cuts and mass lay-offs. Of course some private sector employees ( and businesses) are doing quite nicely. But the reality is that the public sector has been disproportionately insulated from the worst effects of the downturn, the brunt of which has been borne by private sector employees. To present the public sector as a 'sole soft target' is, with respect, to take a perspective utterly divorced from reality.
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Your analysis implies that the impacts of all other options have been seriously evaluated and proven as worse than cutting public sector. What serious analysis has been done on other options to address the deficit, including increasing income tax, increasing CGT, increasing corporation tax and cutting out many of the existing tax reliefs available to the wealthy? You can't rule something as 'least-worst' until you have evaluated all other options.
To be honest, I was thinking about direct public job cuts, as mentioned in Caveat's question, but thanks for reminding all about the downstream impact of job cuts. This is not just an sociological issue, this is a real economic issue. More unemployment (direct and downstream) has a direct cost on the state. Is it unreasonable to suggest that perhaps someone should check whether the net economic effects of the job cuts is to save the state money, or possibly to actually cost the state even more money.
Sorry to dissapoint you, but I live in reality land too. I have direct family members unemployed, and others with salary cuts. I do know what's happening out there. I know that my former colleagues in private sector software industry are whinging about their pay being frozen, but they have had no pay cuts. They did cut some staff, but this was really just a case of 'don't waste the recession', taking the opportunity to dump some staff no longer wanted.
The recent publication of wages by the CSO for Q1 2009 (certain industries) showed very little decreases and (surprise surprise) increases in some area. See http://www.irisheconomy.ie/index.php/2009/08/17/where-are-the-wage-cuts/ for an analysis of these figures, and see http://www.irisheconomy.ie/index.php/2009/08/17/where-are-the-wage-cuts/#comment-12453 for confirmation of this analysis by the high priest of the slash-and-cut brigade, Colm McCarthy himself.
As a matter of fact and public record, the public sector is the only sector that has taken an absolute across the board cut.
The benefit of using income tax as the main mechanism for balancing the books now, is that those who are earning will pay, and those who are not earning will not pay.
I didn't suggest anything about 'pumping money'. As MOB accurately notes above, cuts will have direct and downstream effects. Perhaps in the rush to slash-and-burn, somebody should stop and do the sums and see if these cuts will actually save money, or end up costing more money downstream.
Please stop trying to beat your views into other people. You don't have a monopoly of expertise here. Questioning and challenging your approach does not equate to an unwillingness to solve the problem. There are a range of solutions available, but your absolute and one-sided focus on the slash-and-burn approach does not stand up. Your one-sided analysis of wage inflation doesn't really help us towards a solution either. It wasn't wage inflation that increased property prices. It was the 'perfect storm' of FF/PD planning policy, FF/PD economic policy (giving huge state subsidies to construction and property management, and giving carte-blanche to the banks to inflate prices via flaccid lending controls)
It's a discussion/debate, you surely understand people are going to push their views?
I have no prejudices, I just want to see progress towards addressing the €20bn current deficit. If that's from €4bn in spending cuts or €2bn in spending and €2bn in taxes this year, so be it. Trying to raise €4bn from taxes alone whilst leaving both public sector pay and social welfare untouched for another year is not an option
My simple view is that there is more scope for spending cuts than tax rises and this is allied to my belief that too large a focus on taxes will be more counter productive to recovery than spending cuts.
I'm realistic enough to realise that I'm not going to get anyone to admit that they are overpaid for what they do, so I can understand why people can be defensive in this respect.
I inserted a word for you above in bold just for clarity
I think this is a gross over exageration. Even the most pessimistic projections have the economy is constricting by only 5-7%, which means that the average reduction in wealth will only be 5-7%, not the "20%" plus figures you are quoting. Maybe certain sectors will be hit hard, but they are not typical. Lets not get carried away here.
200k extra people signing on does not equate to 200k extra unemployed people. People who are on short weeks etc. sign on for the day or two they are not working. Workers who used to work 6 days a week and now only work a more normal 5, sign on for 1 day a week. These are not necessarily poor people. I've a close friend who's been put on a 3 day week. His income is still on in excess of 60k per annum for the 3 day week and he collects dole for the remaining 2 days. He's counted as "unemployed" in these stats. There are many more like him.
I hope you are right. I really do. Perhaps - being in the legal profession - I am unduly sensitised as a result of the drop in the number of property transactions.
The tax collected in the next couple of months will be a useful indicator as to whether things are really as bad as I fear. I am very fearful that there will be a massive drop in tax receipts.
There are many more like him? Earning 60K PA for a 3 day week?
C'mon - now who is exaggerating.
Who are the 'many' who earn 100K PA because the last I heard it was only a couple of % of the population.
Liaconn, any chance you could harangue beanpole with PMs rather than subjecting the rest of us to this squeaky, scratchy broken record? It's a public discussion forum. People can make suggestions that they don't have to back up with hard documented peer-reviewed evidence. Beanpole is well known to be OTT in his comments and views. He's not going to answer you. He doesn't have to answer to you for his opinions - just as you don't have to agree with him.
Orka
Any chance you'd keep out of it. If Beanpole suggests I should take a 20% pay cut I am PERFECTLY ENTITLED to ask for his rationale. If you don't want to read my posts, feel free not to. But don't tell me when I can and cannot post. Who on earth do you think you are?
Any chance you'd keep out of it. If Beanpole suggests I should take a 20% pay cut I am PERFECTLY ENTITLED to ask for his rationale. If you don't want to read my posts, feel free not to. But don't tell me when I can and cannot post. Who on earth do you think you are?