Is it time for wage increases?

[TheBigShort]

How can someone be low paid and middle income at the same time?

Low paid and middle incomes, typo on my part.

 

[TheBigShort]

Middle incomes are too low. Increasing wages will fix everything, have you not being paying attention?

Nowhere have I said that increasing wages "would fix everything".
Try pay attention.

 

[Firefly]

But to answer your question, yes.

I've asked you the same, straight forward question 3 times and have gotten 3 different answers - the answer above plus these two:

Of course we shouldn't borrow to pay wages per se, but budget deficits are less than fiscal pact limits of 3% of GDP.

No of course not, not in the flat terms that you have presented it here.

In any case, you're as good as your last race I guess, so I am taking it that you are happy that we borrow extra money to pay for increases in wages for our public servants. I think this is a crazy thing to do but if we are intent on borrowing I can think of far more deserving things to spend the money on such as taking homeless people off the street.

In any case, I thank our lucky stars that we can only use constrained fiscal tools - we can't borrow any more and we can't print our own currency. Any money given to pay increases will have to come from somewhere else. This should make any such increases a lot more difficult.

 

[TheBigShort]

I've asked you the same, straight forward question 3 times and have gotten 3 different answers - the answer above plus these two:

And of course if you take each answer out of context then of course you can manipulate it to suit your agenda.
As stated in my last answer, wage increases should not occur in a vaccum. Or to put it another way, we shouldn't borrow to increase wages per se, or to put it another way, we shouldn't borrow to increase wages in the flat terms that you have presented here.
I assume, that as you keep asking the same question, then you don't understand the point.
We have a growing economy, interest rates are at zero, if the people working and contributing to this growing economy cannot afford a mortgage, rent, health insurance, childcare etc, then what is the point of growing an economy? Who should benefit from a growing economy?

 

[TheBigShort]

if we are intent on borrowing I can think of far more deserving things to spend the money on such as taking homeless people off the street.

How would borrowing take homeless people off the street?

 

[jjm]

Wages Increasing already for the top tax payers Public /Private sector will bring in more than enough to pay public servants ,I don't see any sign of a slow down in either group

 

[Purple]

You are honed in on a narrow perspective. Looking over your shoulder at your neighbour wondering how much it is costing you.
The topic is about a global trend to increase the return on labour (admittedly, the title does not lend itself to that view).
But to answer your question, yes. I also think private sector workers need to see increases in their incomes, predominantly from the bottom up. For instance, a 25% increase in the minimum wage would spark demands for higher wages up the food chain. This will set about generating real domestic demand, increase savings, reduce debt etc.
Of course it cannot occur in a vacuum, international considerations need to be factored. But even a fleeting knowledge of national and global affairs would surely pick up the ascent of unlikely political outcomes. The cause of which is mistakenly construed by some commentators from the rise of extremism, racism, etc.
It is not, it is simple, as it always is - 'its the economy, stupid' (not you personally). When wages cannot pay the bills, rent, childcare etc, then there is a big problem. Add to that the extreme levels of wealth, overvalued labour at top-end earnings, that is prevalent in this economic model and tensions will start to rise. Scapegoats will be made of Gardai who cannot afford to live in Dublin, teachers who have seen their savings depleted, LUAS drivers whose employers tried to renege on previous agreements, etc, etc.

I find it genuinely frightening that anyone in a position of power in this country could think like you. It is so utterly out of kilter with reality and it would destroy our economy in a matter of months.

WE do not, as a nation, create wealth by selling things to each other. To a great extent, greater than almost anywhere else, what we make we export and what we consume we import. Therefore we generate wealth by exporting goods and services. If we increase wages by anything like the amounts you would like the Irish owned small and medium sized businesses which trade internationally will be wiped out within months. You just don’t get it; we have to be competitive on an international stage. That’s the bottom line, that’s the only line.

 

[Purple]

Wages Increasing already for the top tax payers Public /Private sector will bring in more than enough to pay public servants ,I don't see any sign of a slow down in either group

No it won't.

 

[jjm]

Purple because the people in power who You support will increase tax on this group so they will be taxed more.

 

[TheBigShort]

If we increase wages by anything like the amounts you would like the Irish owned small and medium sized businesses which trade internationally will be wiped out within months.

I didn't say by what amount I would like wages to increase. If you are referring to the figure of 25% mentioned earlier, that was simply illustrative, as an example of how a wage increase can generate domestic demand, increase savings, reduce debt. I could have used a €0.10 rise in the minimum wage but such an amount I believe would be negligible.
But even if minimum wage increased by 25%, that does not necessarily equate to a 25% increase for all income brackets.

we have to be competitive on an international stage.

And so does everyone else who exports. And far from not getting it, you are clearly blind to what is occurring economically and politically in international terms. We have a fragmented Irish parliament, Brexit, Trump as president elect, Le Pen on the rise in France, Merkel getting a kicking in Germany, Bulgaria building blockades, Italy in political disarray, Spain split, Venezuela, Argentina bankrupt, Greece on its knees and you would appear to support the same economic policy that has facilitated unfettered corporate profits, primarily through credit expansion and on the backs of wage restraint, or moderate wage increases for 20-30yrs.
That system is broken. You cannot expect people to continuously borrow to generate growth. You cannot expect people to continuously borrow on top of debt. For large sectors of the population their incomes no longer cover the cost of living. Not just in Ireland, but across Europe and the US aswell.
Either governments start defaulting (causing chaos) or there is a significant transfer of wealth from capital to labour.
This topic is not about Ireland in a vaccum, I have posted numerous articles from international sources all advocating similar points - wage increases.
You and Firefly continuously try to limit it to the cost of a public servant v private sector worker in Ireland or some basic accounting.
You wholly fail to pick up on the general theme that the current economic model is broken. It has had its day. It is finished. It no longer works. Keep carrying on with the same model and the euro will crash, expect (more) conflict. Not because people have suddenly become racist or facist or misogynist, but because the economy is a debt trap.

 

[PGF2016]

For large sectors of the population their incomes no longer cover the cost of living. Not just in Ireland, but across Europe and the US aswell.

I find it very hard to understand the constant barrage of news saying that people can't cover the cost of living in Ireland. I've had the misfortune of having to go to a number of shopping centers around Dublin at the weekend recently. It's impossible to get parking. They're packed full of people. Someone has money. A Hyundai SUV is the highest selling car in Ireland this year.

Maybe if the people stopped buying crap they don't need and can't afford there wouldn't be the massive debt that pervades Ireland / US etc.

 

[TheBigShort]

I find it very hard to understand the constant barrage of news saying that people can't cover the cost of living in Ireland.

That would imply that you are not affected. I said large sectors of the population, that does not equate to everyone.

Someone has money. A Hyundai SUV is the highest selling car in Ireland this year.

No-one is denying that there is not money out there, the opposite in fact. There is plenty of money, but it has concentrated itself in the hands of too few. Thats why you get other threads on this site like "What is the squeezed middle?" and "Cut the dole to cut higher taxes". Lots of people, working people, are barely keeping their heads above water.

Maybe if the people stopped buying crap they don't need and can't afford there wouldn't be the massive debt that pervades Ireland / US

Unfortunately the system of growth known as the Celtic Tiger was built around people buying lots of crap on cheap credit expansion. That in turn created a boom resulting in a debt overhang. The Central Banks would like it to start all over again. Cheap borrowing for crap we dont need and as you point out, it is working to an extent in this country. But it is very limited in my opinion as there is still too much debt overhang from the last credit expansion. I would argue that in the next few years we will begin to see wage growth across Europe and US, inducing inflation, raising interest rates. It will be driven primarily by fiscal policy and most likely make the fiscal pact and Lisbon treaty redundant.

 

[PGF2016]

That would imply that you are not affected. I said large sectors of the population, that does not equate to everyone.

There's a reason I'm not affected. My cost of living does not include two cars, Ipads, ridiculously priced alcohol, frequent eating out, cigarettes, gambling etc.

My point was that I struggle to see how it's "large sectors of the population " when all I see is new cars and packed shopping centers.

No-one is denying that there is not money out there.... it has concentrated itself in the hands of too few.

I don't see that at all. We're a very rich country. Or we could be. We just piss all our money away and are blind as to how good we have it. Or could have it.

That's my opinion as unpopular as it may be...

 

[TheBigShort]

My cost of living does not include two cars, Ipads, ridiculously priced alcohol, frequent eating out, cigarettes, gambling etc.

Which are all discretionary spending (aside two car families where both are at work and no reasonable public transport). I would suggest that it is not this spending that is of cause for concern, in fact such spending is good (aside the health effects of tobacco and alcohol) as they are industries in themselves creating employment.
I would suggest it is working people burdened with large mortgage, rent, childcare, increasing insurances combined with income tax, usc, prsi, tv license, nct, car service, phone bill, property tax, pay cuts or pay freeze that is hurting.
Notwithstanding all that, employment has improved and fuel prices fallen, offering some relief, but it wont take much (interest rate hike for example) to reverse that progress.

We're a very rich country.

Totally agree.

We just piss all our money away and are blind as to how good we have it. Or could have it.

Disagree.

 

[Firefly]

And of course if you take each answer out of context then of course you can manipulate it to suit your agenda.
As stated in my last answer, wage increases should not occur in a vaccum. Or to put it another way, we shouldn't borrow to increase wages per se, or to put it another way, we shouldn't borrow to increase wages in the flat terms that you have presented here.
I assume, that as you keep asking the same question, then you don't understand the point.
We have a growing economy, interest rates are at zero, if the people working and contributing to this growing economy cannot afford a mortgage, rent, health insurance, childcare etc, then what is the point of growing an economy? Who should benefit from a growing economy?

OK, if my question was presented in flat terms (I disagree btw), I am assuming your last sentence above is providing more context. So, with that in place, do you think we should borrow more money in order to raise wages in the public sector?

 

[Purple]

I would argue that in the next few years we will begin to see wage growth across Europe and US, inducing inflation, raising interest rates.

If that happens we will see even more economic hardship while Asia (with more people than Europe and the USA combined) grows even more.
If it happens across the entire globe then Ireland can follow suit but we certainly should not lead the charge for obvious economic reasons.

 

[Purple]

I would suggest that it is not this spending that is of cause for concern, in fact such spending is good (aside the health effects of tobacco and alcohol) as they are industries in themselves creating employment.

No, it's bad. None of the products are made in Ireland so buying imported goods is a transfer of wealth out of the country. Increasing wages through borrowing in order to fund spending on imported goods is economic madness.

 

[Purple]

I would suggest it is working people burdened with large mortgage, rent, childcare, increasing insurances combined with income tax, usc, prsi, tv license, nct, car service, phone bill, property tax, pay cuts or pay freeze that is hurting.

So instead of fixing any of that you think we should pay everyone more. Is that the case?
We have historically low interest rates and in real terms oil has never been cheaper. That's the reason the economy is growing so fast. US interest rates will go up over the next 12-18 months. Oil prices will go up over the next 6-12 months. We have lost 15-20% of our competitiveness with our biggest trading partner and they are about to leave the EU... and you want to saddle the country with another billion Euro of borrowing or tax increases in order to pay 300,000 state employees who already enjoy a 5-10% pay advantage over their private sector counterparts (not including their gold plated pensions), even more?

Stop trying to dress self interest up as some broader social concern.

 

[jjm]

It is the people in power With the support of the people who have raised public sector wages .I don't think the are planning to borrow .I have already said where it in going to come from,

 

[Purple]

It is the people in power With the support of the people who have raised public sector wages .I don't think the are planning to borrow .I have already said where it in going to come from,

The Public Sector Unions (the people with power)have bullied the Government into paying more to an already over paid sector.
The money is going to come from borrowing or taxing people in the Private Sector even more.
Where do you think it is going to come from?