# John Fitzgerald on Public Sector pay "Restoration"



## Purple (28 Oct 2016)

Excellent article from John Fitzgerald in the Irish Times today.
He points out that pre-boom the Public Sector enjoyed a 20% margin on like for like jobs in the private sector (ignoring their vastly superior pension). Pre-Benchmarking the differential was 10% but instead of reducing Public Sector pay benchmarking further widened the gap.
That 20% differential was paid for with boom time taxes and is simply unaffordable in a balanced and sustainable economy.


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## PGF2016 (28 Oct 2016)

Purple said:


> That 20% differential was paid for with boom time taxes and is simply affordable in a balanced and sustainable economy.



Presume you mean 'unaffordable'.


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## Purple (28 Oct 2016)

PGF2016 said:


> Presume you mean 'unaffordable'.


Yes, thanks. Fixed it.


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## PGF2016 (28 Oct 2016)

Public sector wages wages should not match the private sector as long as the public sector retains the guarantee of employment and pension entitlements. The only exception would be if the public sector was unable to attract the talent needed.


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## elacsaplau (28 Oct 2016)

You got to hand it to John Fitzgerald........read....._I was paid too much during my career and my pension is also way to high. Still, I'll earn more money now by expressing my concern about these inequities!_


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## Protocol (28 Oct 2016)

Yes, there was a PS pay premium.

The three PS paycuts have reduced the pay premium, towards 0% on average across the pay distribution.


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## Purple (28 Oct 2016)

Protocol said:


> Yes, there was a PS pay premium.
> 
> The three PS paycuts have reduced the pay premium, towards 0% on average across the pay distribution.


According to John Fitzgerald in Newstalk this morning it's still at between 5 and 10%.


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## orka (28 Oct 2016)

Purple said:


> According to John Fitzgerald in Newstalk this morning it's still at between 5 and 10%.


And that still doesn't allow for the better pension in the PS.  Nor for the pay premium being higher at lower pay levels.


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## Purple (28 Oct 2016)

orka said:


> And that still doesn't allow for the better pension in the PS.  Nor for the pay premium being higher at lower pay levels.


Or for the shorter week, job security, paid sick leave, paid maternity leave, flexi-time, generally nicer working environment etc..


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## Andy836 (28 Oct 2016)

orka said:


> And that still doesn't allow for the better pension in the PS.  Nor for the pay premium being higher at lower pay levels.



That's a funny point. I've heard him make it on the radio on numerous occasions yet every time he says it the presenter completely ignores it - it is apparently taboo for rte to question/discuss the inflated salaries of those at the bottom of the PS pile - it doesn't fit with narrative; "the workers are great", "the problem in the PS is over paid managers", "pay rises for low paid (even though low paid in the PS is very different from low paid in the private sector)"


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## Sarenco (28 Oct 2016)

The initial report of the Public Sector Pay Commission will make interesting reading next summer. 

Their terms of reference look promising -

"The Pay Commission will consider such other remuneration matters as it may be asked to consider by the Minister for Public Expenditure and Reform from time to time, including:

Providing objective analysis on the appropriate pay levels for identifiable groups within the public sector;
Comparing appropriate rates for identifiable groups with prevailing private sector/market rates.  This should have regard to evidence on recruitment and retention trends in respect of each group;
Comparing appropriate rates for identifiable groups within the public service with their equivalents in other jurisdictions, particularly where internationally traded skillsets are required, having due regard to differences in living costs;
Providing objective analysis on the appropriate pay levels for officeholders’ pay and pensions.
When reaching its findings the Commission shall have regard to:

(a)  The superannuation and other benefits applying in the public service;

(b)  Security of tenure, where it applies to public servants;

(c)  Pay comparisons taking account of relevant characteristics;

(d)  The public service reform agenda;

(e)  Evidence on recruitment and retention within the public service;

(f)  Any other relevant matters including impact on national competitiveness and sustainable national finances and equity considerations;

(g)  Any other issues as they are determined by Government."


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## TheBigShort (28 Oct 2016)

Sarenco said:


> The initial report of the Public Sector Pay Commission will make interesting reading next summer.
> 
> Their terms of reference look promising -
> 
> ...



This is very welcome I have to say. As a public sector worker I have never been comfortable with the blanket public/private sector comparison. I always thought it to be a lazy comparison made by people intent on creating a divide between workers.
There are roughly 5-6 times more private sector workers than public sector workers which indicates levels of business activity not provided by the PbS. These activities will encompass all skill levels from highly technical, professional and innovative to low-skilled minimum wage. The PbS will encompass these skill levels also but it remains to be seen to what range.
Certainly across all government departments and agencies people of high qualification, experience are employed, comparable to high skilled workers in the PrS.
And while there are also low-skilled workers employed in the PbS, the level and range of their activities would not be comparable to the level and range of low skilled work in the PrS.
This is not a sleight on PrS workers (ive worked 10yrs in PrS and am married to PrS worker), just stating a fact that there are no mushroom pickers, car wash attendents, deli workers, trainee hairdressers, waiting staff, fast-food workers, cinema attendants etc...etc...all of which, and more, are associated with low or minimum wage pay.
This, in the round, will have the effect of lowering average overall wages in PrS compared to the PbS in my opinion.
So the opportunity to make wage comparisons between comparable groupings is welcome.


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## Delboy (28 Oct 2016)

It's an exercise to buy time. The report will be a whitewash and no matter what it says, 1 thing is for sure - there'll be no wage reductions in the PubSec.
It'll be left to gather dust. Meanwhile, Unions will get down to negotiating payrises for their members either unilaterally or collectively under some new form of Social partnership


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## TheBigShort (28 Oct 2016)

Delboy said:


> there'll be no wage reductions in the PubSec.



I shouldn't think so either, considering the wage cuts already made.



Delboy said:


> Unions will get down to negotiating payrises for their members



That is what they are mandated to do. Its a wonder that more private sector workers dont unionise.


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## jjm (28 Oct 2016)

A lot of low paid workers are in unions ,In fact quite a few employers insist they are,The bottom line is If employer/union can see a wage increase will put them out of buisness ,they will act in the best intreest of the company/worker,Workers will spot deception a mile away ,They are  not going to allow people who were well paid to carry out the benchmarking to pick there pockets to pay for there mistakes


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## noproblem (28 Oct 2016)

John Fitzgerald is ranting on similar to Garret with their averaging of this, that, and the other. After all, he's just an economist and we all know you'll never see 2 of them agree on anything even though they'll all trained in the same way. I do believe the same Mr Fitz worked for the state as an advisor and economist before the proverbial hit the fan. What wonderful work he did and fantastic advice he gave which saved us from going up the swanney. I'd take what John Fitz says with a pinch pinch of salt. His pedigree, when it was tested, proved to be very wanting indeed. However,  there's certain people who love to buy a thoroughbred because they think they're buying a racehorse. Nuff said.


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## jjm (29 Oct 2016)

I like the bit about buying the racehorse ,The blame the racehorse because they paid to much  they now have to feed him but they want someone else to pay for the hay


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## jjm (29 Oct 2016)

winter has been pritty brutal around here with colder than average temperatures, That means we have to feed out more hay than usual,Hay not only provides nourishment for the horses,But also acts like fuel for the furnace,The process of degestion helps keep the horses warm on these frigid days,We are grateful  that our hay suppliers keep us well stocked with hay


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## jjm (29 Oct 2016)

TheBigShort as you know i have followed your posts .You are the dark Horse. No one so far has the required skill set  to tether the Horses all talk and no action,I have to go to work some of us do on a saturday By ALL


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## PGF2016 (29 Oct 2016)

noproblem said:


> John Fitzgerald is ranting on similar to Garret with their averaging of this, that, and the other. After all, he's just an economist and we all know you'll never see 2 of them agree on anything even though they'll all trained in the same way. I do believe the same Mr Fitz worked for the state as an advisor and economist before the proverbial hit the fan. What wonderful work he did and fantastic advice he gave which saved us from going up the swanney. I'd take what John Fitz says with a pinch pinch of salt. His pedigree, when it was tested, proved to be very wanting indeed. However,  there's certain people who love to buy a thoroughbred because they think they're buying a racehorse. Nuff said.


You're having a pop at the man. I know nothing about him but the article makes sense to me. How about you comment on the content?


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## TheBigShort (29 Oct 2016)

jjm2016 said:


> TheBigShort as you know i have followed your posts .You are the dark Horse. No one so far has the required skill set  to tether the Horses all talk and no action,I have to go to work some of us do on a saturday By ALL



As you know, ive tried to follow your posts. My shift starts at 12pm today, thanks.


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## elacsaplau (29 Oct 2016)

Out of curiosity, what type of work do you do?


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## cremeegg (29 Oct 2016)

noproblem said:


> John Fitzgerald is ranting on similar to Garret with their averaging of this, that, and the other. After all, he's just an economist and we all know you'll never see 2 of them agree on anything even though they'll all trained in the same way. I do believe the same Mr Fitz worked for the state as an advisor and economist before the proverbial hit the fan. What wonderful work he did and fantastic advice he gave which saved us from going up the swanney. I'd take what John Fitz says with a pinch pinch of salt. His pedigree, when it was tested, proved to be very wanting indeed. However,  there's certain people who love to buy a thoroughbred because they think they're buying a racehorse. Nuff said.



Do you really think that the financial difficulties suffered by the state were caused by taking the advice of the ESRI ?

I suggest that you have not the slightest idea what you are talking about.


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## TheBigShort (29 Oct 2016)

elacsaplau said:


> Out of curiosity, what type of work do you do?



Im involved with customs. You?


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## noproblem (29 Oct 2016)

cremeegg said:


> Do you really think that the financial difficulties suffered by the state were caused by taking the advice of the ESRI ?
> 
> I suggest that you have not the slightest idea what you are talking about.




I  never suggested they did. How could they cause it when they, ie,  the ESRI never spotted the signs in the first place? Makes one wonder what they were all doing and why you commented at all. I do believe the very same Mr Fitz made a type of grovelling apology to the Irish people for being asleep on the job though. But sure, compared to you cremeegg what would the rest of us know? I bow to your superiority and serious depth of knowledge. Thanks for reminding us that our opinions don't matter.


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## Purple (1 Nov 2016)

John Fitzgerald has apologised for not forecasting the crash but he did raise concerns with the Central Bank about the nature of the stress tests which the banks were conducting in relation to a property crash. He said that they were only factoring in house price decreases and ignoring the fact that such drops would not happen in a vacuum. The Central Bank ignored their concerns. The ESRI also warned about property prices as a multiple of incomes, the construction sector as a proportion of the overall economy, the loss of wealth creating jobs (internationally traded goods and services sector) and many other things. If they had been listened to we would not have had the crash we did have. We would have had a recession but nothing like as bad.


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## Purple (1 Nov 2016)

TheBigShort said:


> This is very welcome I have to say. As a public sector worker I have never been comfortable with the blanket public/private sector comparison. I always thought it to be a lazy comparison made by people intent on creating a divide between workers.
> There are roughly 5-6 times more private sector workers than public sector workers which indicates levels of business activity not provided by the PbS. These activities will encompass all skill levels from highly technical, professional and innovative to low-skilled minimum wage. The PbS will encompass these skill levels also but it remains to be seen to what range.
> Certainly across all government departments and agencies people of high qualification, experience are employed, comparable to high skilled workers in the PrS.
> And while there are also low-skilled workers employed in the PbS, the level and range of their activities would not be comparable to the level and range of low skilled work in the PrS.
> ...


The information the in the ESRI report takes all that into account. The pay differential was 10% higher in the public Sector before benchmarking and 20% higher afterwards. Despite the cuts in the last few years it is still 5% to 10% higher, particularly among lower paid employees. Given the utter sham which Benchmarking was I don't see how this new commission will be any different. It is being headed by a former Union leader and will be stuffed with Union representatives and unionised civil servants. The facts will be left outside the door and we'll get soundbites about how hard people work, striving for high standards and a few hard luck human interest stories championed by the Public Sector Broadcaster in Montrose.


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## TheBigShort (1 Nov 2016)

Purple said:


> The pay differential was 10% higher in the public Sector before benchmarking and 20% higher afterwards. Despite the cuts in the last few years it is still 5% to 10% higher, particularly among lower paid employees



Private sector workers really need to stand up and fight. They are being rolled over time and again while the fruits of their productivity get sucked up to the top.


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## Purple (1 Nov 2016)

TheBigShort said:


> Private sector workers really need to stand up and fight. They are being rolled over time and again while the fruits of their productivity get sucked up to the top.


I agree. We need to really fight the Public Sector Unions which effectively run the country and stop them stealing from us. It is a battle to expose their hypocrisy and the damage they do to working people and the poor when the Public Service Broadcaster is a Union mouthpiece and just about every journalist is a Union member but the struggle for justice and fairness is never easy.


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## TheBigShort (1 Nov 2016)

Purple said:


> I agree. We need to really fight the Public Sector Unions which effectively run the country and stop them stealing from us. It is a battle to expose their hypocrisy and the damage they do to working people and the poor when the Public Service Broadcaster is a Union mouthpiece and just about every journalist is a Union member but the struggle for justice and fairness is never easy.



One way would be for private sector workers to unionise. Their participation in organised union's is dismal. If the unions are running the country as you say, then all workers need to claim a stake in the unions. 
If not, how would you propose to fight public sector unions?


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## Purple (1 Nov 2016)

TheBigShort said:


> One way would be for private sector workers to unionise. Their participation in organised union's is dismal. If the unions are running the country as you say, then all workers need to claim a stake in the unions.
> If not, how would you propose to fight public sector unions?


The Private Sector companies in the real economy that were Unionised have gone out of business as Unions stymie change and make businesses uncompetitive. Private Sector employees are not in Unions as that they know this.
Anyway, we can't all get paid more than than we earn. If we were all in Unions there'd be nobody for us to live off.


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## TheBigShort (1 Nov 2016)

Purple said:


> The Private Sector companies in the real economy that were Unionised have gone out of business as Unions stymie change and make businesses uncompetitive. Private Sector employees are not in Unions as that they know this.
> Anyway, we can't all get paid more than than we earn. If we were all in Unions there'd be nobody for us to live off.





Purple said:


> We need to really fight the Public Sector Unions which effectively run the country and stop them stealing from us



What do you propose to do?


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## Purple (1 Nov 2016)

TheBigShort said:


> What do you propose to do?


I'm just some guy. I can't do much. I will encourage my children to emigrate though as I see no future for them here.
That makes me angry.


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## Jon Stark (1 Nov 2016)

Purple said:


> I'm just some guy. I can't do much. I will encourage my children to emigrate though as I see no future for them here.
> That makes me angry.



A tad dramatic. Which first world country do you reckon is a sufficiently right wing utopia for your precious flowers to flourish in..?


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## PGF2016 (1 Nov 2016)

Purple said:


> I'm just some guy. I can't do much. I will encourage my children to emigrate though as I see no future for them here.
> That makes me angry.


To where as a matter of interest? 

Apologies for the off topic question.


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## Purple (1 Nov 2016)

Jon Stark said:


> A tad dramatic. Which first world country do you reckon is a sufficiently right wing utopia for your precious flowers to flourish in..?


Do you have any children? Just wondering so I can say something nasty about them.


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## Purple (1 Nov 2016)

PGF2016 said:


> To where as a matter of interest?
> 
> Apologies for the off topic question.


Most of Europe and parts of the USA.


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## Jon Stark (1 Nov 2016)

Purple said:


> Do you have any children? Just wondering so I can say something nasty about them.



Where's the nastiness about your children?

Actually, what's nasty at all in my post?! You're very grouchy after the long weekend...

And yes, I do have one precious little flower so far  

And just for the record, I don't disagree with much of your posting on this thread, despite being a public sector worker myself, but you've strayed into hyperbole.


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## TheBigShort (1 Nov 2016)

Purple said:


> Most of Europe and parts of the USA.



Is this the same USA that is effectively bankrupt? That hands half of its tax receipts to the military industrial complex, which in turn feeds private sector arms manufacturing, sales etc?
The same USA with increasing number of bankrupt states, and a divided public? 
29 million Americans on long-term unemployment, discounted out of the labour force to keep the jobless numbers down. 
America is crumbling.


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## Purple (1 Nov 2016)

TheBigShort said:


> Is this the same USA that is effectively bankrupt? That hands half of its tax receipts to the military industrial complex, which in turn feeds private sector arms manufacturing, sales etc?
> The same USA with increasing number of bankrupt states, and a divided public?
> 29 million Americans on long-term unemployment, discounted out of the labour force to keep the jobless numbers down.
> America is crumbling.


Right, yep, crumbling. That's why the middle classes are getting poorer and their incomes are dropping? 
Do you think the US Department of Labour's Bureau of Statistics is in cahoots with the government and these Stat's showing the real figures are just made up?


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## Purple (1 Nov 2016)

Jon Stark said:


> Where's the nastiness about your children?
> 
> Actually, what's nasty at all in my post?! You're very grouchy after the long weekend...
> 
> And yes, I do have one precious little flower so far


This post doesn't change the condescending tone of your last one.  



Jon Stark said:


> And just for the record, I don't disagree with much of your posting on this thread, despite being a public sector worker myself, but you've strayed into hyperbole.


 Nope, that's the way I feel and that's what I think the best option is for my kids if they want a future they can build themselves. As we continue to lurch to the left things are only going to get worse.


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## TheBigShort (1 Nov 2016)

Purple said:


> Right, yep, crumbling. That's why the middle classes are getting poorer and their incomes are dropping?
> Do you think the US Department of Labour's Bureau of Statistics is in cahoots with the government and these Stat's showing the real figures are just made up?



I do think it is odd, that with such high employment rates that inflationary pressures are not emerging and that an increasing numbers of Americans are agitating for change. Trump, Sanders are reflective of a population preparing to challenge the established norms. Whether that transition eventually emerges, whether its peaceful or not, remains to be seen. But the US debt is out of control.


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## Purple (1 Nov 2016)

TheBigShort said:


> I do think it is odd, that with such high employment rates that inflationary pressures are not emerging and that an increasing numbers of Americans are agitating for change. Trump, Sanders are reflective of a population preparing to challenge the established norms. Whether that transition eventually emerges, whether its peaceful or not, remains to be seen. But the US debt is out of control.


So do you really think it's crumbling?
Do you accept the statistics from the Bureau of Statistics?


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## TheBigShort (1 Nov 2016)

Purple said:


> So do you really think it's crumbling?
> Do you accept the statistics from the Bureau of Statistics?



I didn't read them. I could source an equal amount of positive reports as I could negative reports. In the end I make a decision based on the information I gather. In the round, the US is effectively bankrupt, or close to it. If you define bankruptcy as being only able to service debt obligations through the creation of further debt, then it is bankrupt. 
It has itself mired in global conflicts and from where im sitting it is agitating for more conflict. 
Yes, I think the great country we know as the USA is under the cosh of a corporate structures and is doomed to collapse in on itself.


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## Purple (1 Nov 2016)

TheBigShort said:


> I didn't read them. I could source an equal amount of positive reports as I could negative reports. In the end I make a decision based on the information I gather.


The Bureau of Statistics compile the source data. Everything else is someone's opinion on their data.



TheBigShort said:


> In the round, the US is effectively bankrupt, or close to it. If you define bankruptcy as being only able to service debt obligations through the creation of further debt, then it is bankrupt.


 Just like us then, yes?


TheBigShort said:


> It has itself mired in global conflicts and from where im sitting it is agitating for more conflict.


 Agreed.


TheBigShort said:


> Yes, I think the great country we know as the USA is under the cosh of a corporate structures and is doomed to collapse in on itself.


 Even though unemployment is down and low and middle income families are getting a larger proportion of the national income for the first time in 30 or 40 years?


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## TheBigShort (1 Nov 2016)

Purple said:


> The Bureau of Statistics compile the source data. Everything else is someone's opinion on their data.



U1 to U6 are the data for measuring unemployment. The results in each category vary somewhat. Im inclined not to exclude categories of people in order to obtain a desired outcome.



Purple said:


> Just like us then, yes?



Yep.



Purple said:


> Even though unemployment is down and low and middle income families are getting a larger proportion of the national income for the first time in 30 or 40 years?



Yep. Unless of course this is a consequence of increasing peoples wages to levels that they are worth.
I would be sceptical however. Bogus money printing schemes (QE) most likely feeding into the economy at large most likely in my opinion. I could of course be wrong.


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## Purple (1 Nov 2016)

TheBigShort said:


> U1 to U6 are the data for measuring unemployment. The results in each category vary somewhat. Im inclined not to exclude categories of people in order to obtain a desired outcome.


Same here. So why are you ignoring the primary data and the analysis done by the Public Servants in the Bureau of Statistics?



TheBigShort said:


> Yep. Unless of course this is a consequence of increasing peoples wages to levels that they are worth.


 And who determines that? What if they are worth less than they are paid? If your job can be done by someone in Vietnam for one fifth of your pay then how much is your labour worth? Be careful what you wish for.


TheBigShort said:


> I would be sceptical however. Bogus money printing schemes (QE) most likely feeding into the economy at large most likely in my opinion. I could of course be wrong.


 You could indeed.


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## TheBigShort (2 Nov 2016)

Purple said:


> So why are you ignoring the primary data and the analysis done by the Public Servants in the Bureau of Statistics?



I suspect the data is not based on all relevant criteria.



Purple said:


> If your job can be done by someone in Vietnam for one fifth of your pay then how much is your labour worth



It cant, not yet anyway.


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## Purple (2 Nov 2016)

TheBigShort said:


> It cant, not yet anyway.


That's not what I asked you.


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## TheBigShort (2 Nov 2016)

Purple said:


> If your job can be done by someone in Vietnam for one fifth of your pay then how much is your labour worth?



Five times more than a Vietnamese labourer.
If a litre of milk can be bought for one fifth of the price that it costs here how much is the capital investment in a milk producer here worth?


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## Purple (2 Nov 2016)

TheBigShort said:


> Five times more than a Vietnamese labourer.
> If a litre of milk can be bought for one fifth of the price that it costs here how much is the capital investment in a milk producer here worth?


The Capital investment or the Labour investment?
You seem to think the value of a persons labour is tied to their living expenses. 
If I have a cocaine habit and lots of kids and you are single and not a junkie should I get paid more for doing the same job as you?


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## Firefly (2 Nov 2016)

Purple said:


> If I have a cocaine habit and lots of kids



Well we know you have loads of kids....


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## Purple (2 Nov 2016)

Firefly said:


> Well we know you have loads of kids....


Yea, too many!


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## cremeegg (2 Nov 2016)

Sorry if I am butting in to a private conversation, but the answer to this question



TheBigShort said:


> If a litre of milk can be bought for one fifth of the price that it costs here how much is the capital investment in a milk producer here worth?



is nothing more than you can get in subsidies from taxpayers.


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## Purple (2 Nov 2016)

cremeegg said:


> Sorry if I am butting in to a private conversation, but the answer to this question


 Lol


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## TheBigShort (2 Nov 2016)

Purple said:


> The Capital investment or the Labour investment?
> You seem to think the value of a persons labour is tied to their living expenses.
> If I have a cocaine habit and lots of kids and you are single and not a junkie should I get paid more for doing the same job as you?



No. Perhaps you could answer the question now?


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## Purple (2 Nov 2016)

TheBigShort said:


> No. Perhaps you could answer the question now?


I asked you two questions. Which one would you like me to answer?
 (Which one did you answer?)


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## TheBigShort (2 Nov 2016)

Purple said:


> I asked you two questions. Which one would you like me to answer?
> (Which one did you answer?)



You asked me what the value of my labour was based on a worker in Vietnam. I said it was five times the value.


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## Purple (2 Nov 2016)

TheBigShort said:


> You asked me what the value of my labour was based on a worker in Vietnam. I said it was five times the value.


How do you work that out?
If you were both making a product which was being sold in Germany how would you work out the value of your labour?

 You asked _"If a litre of milk can be bought for one fifth of the price that it costs here how much is the capital investment in a milk producer here worth?" _I asked you if you meant capital investment or labour investment. I'm not sure what you are asking.


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## TheBigShort (2 Nov 2016)

Purple said:


> How do you work that out?
> If you were both making a product which was being sold in Germany how would you work out the value of your labour?
> 
> You asked _"If a litre of milk can be bought for one fifth of the price that it costs here how much is the capital investment in a milk producer here worth?" _I asked you if you meant capital investment or labour investment. I'm not sure what you are asking.



It was an ambiguous question, like your one. It is exemplified by throwing another factor into the equation "sold in Germany" after the question is answered. I could easily add that it costs twice as much in wages in Norway to do my job. So how much is my labour worth now? Am I paid too much? Or too little? 

In the long run the value of labour will determine the return on capital. The more incomes fall, the narrower the consumer base for highly profitable goods and services to be sold. This is what we are seeing today. The dilution of the purchasing power of labour corresponding with increases in asset values and capital investments. 
Cracks are setting in, in Europe and the US.


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## Purple (2 Nov 2016)

TheBigShort said:


> It was an ambiguous question, like your one. It is exemplified by throwing another factor into the equation "sold in Germany" after the question is answered. I could easily add that it costs twice as much in wages in Norway to do my job. So how much is my labour worth now? Am I paid too much? Or too little?
> 
> In the long run the value of labour will determine the return on capital. The more incomes fall, the narrower the consumer base for highly profitable goods and services to be sold. This is what we are seeing today. The dilution of the purchasing power of labour corresponding with increases in asset values and capital investments.
> Cracks are setting in, in Europe and the US.


I agree that it's hard to determine and that ultimately the value of labour is determined by the return on capital. That's why I genuinely believe that the movement of capital to the Far East and the corresponding increase in wages and living standards is a good thing, even though it has happened to some extent at our expense (and indeed mine since I work in a a sector which is very exposed to Far Eastern manufacturing competition).   
It is also why I don't understand where the notion comes from that pay levels should somehow be tied to the cost of living or what people need, or think they need, to live on.


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## TheBigShort (2 Nov 2016)

Purple said:


> the Far East and the corresponding increase in wages and living standards is a good thing,



I agree.



Purple said:


> even though it has happened to some extent at our expense (and indeed mine since I work in a a sector which is very exposed to Far Eastern manufacturing competition).



While the Far East can compete aggressively on wages, it should be noted that this should result in cheaper prices? This has emerged not in the form of retail prices falling, but interest rates falling. It has never been so cheap (at corporate levels anyway) to borrow so much for so long.
And that is the problem as I see, an abundance of supply with diminished demand. Either countries, banks, corporates need to default or go bankrupt and start again, or inflation needs to kick in. Increasing wages will induce an inflationary effect.



Purple said:


> It is also why I don't understand where the notion comes from that pay levels should somehow be tied to the cost of living or what people need, or think they need, to live on.



What is the point in producing a good if you cant afford it? Why teach someone the qualifications to a good career if you cant afford the product or service that is generated from that education? Why investigate a crime if you cant afford the rent on your home? 
An income that provides a standard of living, or perceived standard of living, is a motivator to good work and services.


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## Purple (2 Nov 2016)

TheBigShort said:


> While the Far East can compete aggressively on wages, it should be noted that this should result in cheaper prices? This has emerged not in the form of retail prices falling, but interest rates falling. It has never been so cheap (at corporate levels anyway) to borrow so much for so long.
> 
> And that is the problem as I see, an abundance of supply with diminished demand. Either countries, banks, corporates need to default or go bankrupt and start again, or inflation needs to kick in. Increasing wages will induce an inflationary effect.



The cost of white goods, computers and electronics, TV’s, clothes, kids toys etc are far lower in real terms than they ever were. The same goes for things like cars. Those decreases relate directly to lower labour costs (or greater returns on capital).




TheBigShort said:


> What is the point in producing a good if you cant afford it? Why teach someone the qualifications to a good career if you cant afford the product or service that is generated from that education? Why investigate a crime if you cant afford the rent on your home?
> 
> An income that provides a standard of living, or perceived standard of living, is a motivator to good work and services.


 True, to an extent, but how do we quantify it? Many people make things they can’t afford. Most people making luxury cars can’t afford them. I very much doubt that anyone making ships ever buys one.

The average income for a Garda in Ireland in the first two quarters of this year was €66,000 (plus a fantastic pension) so they certainly don’t have a problem affording their rent (obviously newly qualified ones do struggle but that is the case with every job).


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## TheBigShort (2 Nov 2016)

Purple said:


> The cost of white goods, computers and electronics, TV’s, clothes, kids toys etc are far lower in real terms than they ever were. The same goes for things like cars. Those decreases relate directly to lower labour costs (or greater returns on capital).



Point accepted. A combination of lower prices and low interest rates has led to an abundance or over supply of goods. Prices however did not fall to their true value as they were supported by a massive credit expansion. Now that that bubble has burst it is Central Banks propping up the void by a further credit expansion (QE) in the hope of creating a wealth effect that will "trickle down" to the population at large despite the evidence of a trickle up effect instead.



Purple said:


> True, to an extent, but how do we quantify it? Many people make things they can’t afford. Most people making luxury cars can’t afford them. I very much doubt that anyone making ships ever buys one.



I was talking in general terms. People have made sacrifices in terms of job losses and pay cuts. But as the economy recovers, then those sacrifices should begin to reverse. Arguably they are, but at a slower pace than accepted or is expected.



Purple said:


> The average income for a Garda in Ireland in the first two quarters of this year was €66,000 (plus a fantastic pension) so they certainly don’t have a problem affording their rent (obviously newly qualified ones do struggle but that is the case with every job).



The average mortgage and rent and cost of living should be compared also.
Also it is my understanding that the dispute reaches beyond pay rates. Lack of investment in technology, lack of resources to investigate, prosecute, unending resources allocated to minor petty crimes while more serious crimes are not investigated properly, has led to a general demise in moral and confidence in the Gardai and in particular, its senior management.


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## Purple (2 Nov 2016)

TheBigShort said:


> Point accepted. A combination of lower prices and low interest rates has led to an abundance or over supply of goods. Prices however did not fall to their true value as they were supported by a massive credit expansion. Now that that bubble has burst it is Central Banks propping up the void by a further credit expansion (QE) in the hope of creating a wealth effect that will "trickle down" to the population at large despite the evidence of a trickle up effect instead.


 But they have trickled down, just not in the West. 4 billion people have been lifted out of absolute poverty in the last 20 years. We need to look at the bigger picture.



TheBigShort said:


> I was talking in general terms. People have made sacrifices in terms of job losses and pay cuts. But as the economy recovers, then those sacrifices should begin to reverse. Arguably they are, but at a slower pace than accepted or is expected.


 Agreed, my comment above notwithstanding.



TheBigShort said:


> Also it is my understanding that the dispute reaches beyond pay rates. Lack of investment in technology, lack of resources to investigate, prosecute, unending resources allocated to minor petty crimes while more serious crimes are not investigated properly, has led to a general demise in moral and confidence in the Gardai and in particular, its senior management.


 I agree. They would have strong public support if they concentrated on those issues instead of pay and stopped telling lies about what they get paid.


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## jjm (2 Nov 2016)

(1)  anyone know for sure if the Rent is  Taxed,
(2) anyone  know Will putting rent in to main income Give an extra pension to retired members
(3)all agree or disagree With  WRC  they took out one allowance and put another allowance in its place, Should we not be getting rid of allowances which are paid to everyone they are now part of pay .
(4)Should we be doing away with lower end of the pay scale seeing very few starts on them anyway
(5) just asking


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## jjm (3 Nov 2016)

Purple Has a very good post over on GARDA PAY post NO 5
purple says allowances add another 25 to 30% to there salary and overtime can be worked

Year 1 25472 euro
year 2  28302 euro
year 3  29834 euro
year 4  32407 euro
year 5 35840  euro
year 6 38804 euro
year 7 40168 euro
year 8 42138 euro
year 9 42138 euro
year10 42138 euro
year11 42138 euro
year12 42138 euro year13 43857 euro
year14 43857 euro
year15 43857 euro
year16 43857 euro
year17 43857 euro
year18 43857 euro
year19 45793 euro

Purple says we should have another allowance for working in dublin ,The problem is we have so many allowances in the public service and more added by the day,
we are now going to have an allowance for shift change over this should be included in there pay in the chart above
I Think we need to up the entry salary and do away with  many allowances if everyone gets them why have them

A few years ago all the buss as part of the reform allowances were to be done away  to make payroll easier .Any suggestions on where pay scale should start


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## Firefly (4 Nov 2016)

As expected, they're lining up...

http://www.irishtimes.com/news/irel...new-pay-terms-after-garda-pay-offer-1.2854485

http://www.independent.ie/irish-new...review-following-garda-pay-deal-35188140.html


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## Firefly (16 Nov 2016)

Purple said:


> Most of Europe and parts of the USA.


Only getting to this now. I quite like Holland actually. I know a few people from there and others who have worked there. Seems like an ideal place to live. Space is a bit tight in urban areas but they have a very high standard of living.


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## Purple (18 Nov 2016)

Firefly said:


> Only getting to this now. I quite like Holland actually. I know a few people from there and others who have worked there. Seems like an ideal place to live. Space is a bit tight in urban areas but they have a very high standard of living.


I like Holland too. They can be a bit cold though.


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## ardmacha (19 Nov 2016)

The present unrest over pay is obviously a function of the pay levels, but also because the government is pursuing an entirely political rather than industrial relations based approach. There is an obvious attempt by the government, and the media, to claim that people working in the PS should remain on recession level salaries in order to fund the public services, when of course all citizens should be required to fund public services. 

The problem is that this biased commentary means that there is little intelligent discussion and this does not bode well for a commission. It has been mentioned here that the overpay bias being at the lower end is rarely discussed, rather the rhetoric suggests that high salaries for highly skilled people are robbing the pensioners. Of course, it is pensioners that suffer most when there is a waiting list because the medical specialists needed to treat them have gone to Australia. You have the likes of Eddie Hobbs spouting half truths about pensions, as much designed to cover up the poor performance of the private sector as anything else. There is a significant difference between different groups in the PS. You have the lower paid PS,  who get a modest pension which is only notable when compared to those who have none. You have middle-level people who pay in for 40 years and get a very decent pension, but those who graduated with them are also doing decently in most cases. Then you have those who get enormous pensions after a few years in some top post, or as a politician, or Gardai who get pensions at a ridiculously young age. These different situations cannot usefully be aggregated together. Everyone in every job needs to be like the lower paid PS. Mid level people need a later retirement age, and the top level pension should be capped. 

There is a problem with the PS. With pay at the low end, with performance at the middle and upper levels and with pensions at the higher levels.


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## Purple (21 Nov 2016)

ardmacha said:


> There is an obvious attempt by the government, and the media, to claim that people working in the PS should remain on recession level salaries in order to fund the public services, when of course all citizens should be required to fund public services.


 That's utter nonsense. The media are very sympathetic to the Public Sector as most of the media is heavily unionised and the State Broadcaster is effectively Public Sector as the employees are effectively unsackable and have defined benefit pensions.  There is a desire by some people not to see Public sector pay return to boom time levels which were unsustainable even during a credit fuelled, capital tax funded windfall. The State simply can’t afford it. If you want pay increases then increase productivity and resuce numbers by a corresponding amount. If you want pay increases then divide the existing pay bill amongst fewer people who are working in more efficient organisations. It is the people  working in the Public Sector who should be leading that change instead of waiting for “the gubberment” to tell you what to do.




ardmacha said:


> You have the likes of Eddie Hobbs spouting half truths about pensions, as much designed to cover up the poor performance of the private sector as anything else.


 What, specifically, are you referring to?

Your other points about the structure of pay and pensions are well made but there is no anti-Public Sector media conspiracy. The opposite is true if anything.


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