Opinion Public Sector pay in Budget 2019

Discussion in 'Budget 2019' started by Firefly, Oct 4, 2018.

  1. Firefly

    Firefly Frequent Poster

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    Last edited: Oct 4, 2018
    Disclosure: My wife works for the PS.

    Excellent article by Dan O'Brien.

    Absolutely scandalous that the majority of government spending increases are going to benefit those with the greatest job security & most generous pension arrangements. Also, incredible that our PS are paid, on average, 40% higher than those in private sector. In the UK the gap is 1%

    https://www.independent.ie/irish-ne...ector-pay-levels-above-all-else-37368536.html
     
    Last edited: Oct 4, 2018
  2. RETIRED2017

    RETIRED2017 Frequent Poster

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    You will find in most cases the private sector are paid 40% or higher than those in UK also,
     
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  3. Firefly

    Firefly Frequent Poster

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    Hi,
    I have updated my post. The PS in Ireland is paid, on average 40% more than those in the private sector here.
    The gap between PS and private sector in the UK is about 1%.
     
  4. ReesesPieces

    ReesesPieces Registered User

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    Doesn't that mostly imply that our private sector is made up of a much higher proportion of lowly paid and possibly low skilled workers? If you were to look at Northern Ireland I'd be shocked if there wasn't a similarly huge disparity because most of the 'decent' jobs there seem to be public sector and if you're educated you would be much more likely to go for a public sector job. I'd be more interested to see a breakdown of, say, earnings by qualification and experience in both sectors for a comparison. Its not going to shock anyone that doctors and teachers earn more than people who work in Tesco or call centres, but its definitely worth investigating if that statistic suggests most jobs with 'decent' wages are paid by the government.

    Its fair enough to investigate the difference between public and private sector salaries: I think the assumption has always been you accept a lower salary for a better pension and more flexibility, if that is no longer the case then it should be addressed. But anecdotally, I know a few people who decided to go into the civil service at management level when they opened it up for direct entry: they earn considerably less than the private sector workers I know in Dublin with similar educational background and experience but they value the flexibility and pension and its worth it for them so far.

    The situation where people appointed after 2011 earn less is ridiculous, and needs addressing, which seems to be most of what the budget is doing. If there's a need for a broader reassessment of salary scales, then that's a different matter, but I think pointing to the discrepancy between private and public sector wages is assuming a causality that just might not be there.
     
  5. Delboy

    Delboy Frequent Poster

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    Totally agree with you. All PS/CS workers should be brought down to 2011 levels and hey presto, pay equality.
     
  6. Sophrosyne

    Sophrosyne Frequent Poster

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    Very sensible post.
     
  7. Sophrosyne

    Sophrosyne Frequent Poster

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    Latest CSO statistics for earnings and labour costs across sectors.

    Average weekly earnings were €744.08 in Q2 2018, which represents average earnings in the Irish economy, however there are variations in earnings across the sectors. The highest average weekly earnings of €1,133.51 were in the Information and Communication sector, followed by the Financial, insurance and real estate activities sector at €1,119.36. The lowest average weekly earnings were €356.29 in the Accommodation and food service activities sector and €482.91 in the Arts, entertainment, recreation and other service activities sector. See table 1 and figure 2.

    Average weekly earnings increased in all 13 sectors in the economy in the year to Q2 2018. The largest percentage increase was 6.5% in the Financial, insurance and real estate activities sector, in which average weekly earnings rose from €1,050.89 to €1,119.36 in the year to Q2 2018. The second largest increase was 6.3% in the Professional, scientific and technical sector which rose from €873.54 to €928.76 over the year. See table 1 and figure 2.

    Average weekly earnings in the public sector (including semi-state) showed an increase of 2.4% from €936.29 to €959.09 in the year to Q2 2018. There was also an increase in average weekly earnings in the private sector of 3.6%, from €659.48 to €683.12 over the same period. See table 1.
     
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  8. Firefly

    Firefly Frequent Poster

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    The article makes the point that in the UK, public sector salaries, are on average, 1% higher than private sector salaries. In Ireland however, they are 40% higher. And we are still spending enormous amounts of money to make the gap wider.
     
  9. Sophrosyne

    Sophrosyne Frequent Poster

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    In that article, Dan O'Brien states:

    "That's 1pc versus 40pc. This is a very big difference. It is enormous when one considers there is no great difference between the public sectors in the two countries."

    However, there is an enormous difference in the private sector. Taken collectively, the UK private sector is much wealthier. So naturally, the differential between public and private sector percentages will be lower.

    Moreover Ireland cannot enjoy the same economies of scale as the UK.
     
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  10. Firefly

    Firefly Frequent Poster

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    Wealthier most certainly, but this point addresses gaps in wages rather then wealth. I still cannot see the logic why we have such a big gap. We have almost full employment and the world's multinationals here paying very well. In anything, the gap should be the other way..
     
  11. Sophrosyne

    Sophrosyne Frequent Poster

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    Well you are surely not suggesting that we have more higher earners here than in the UK are you?
    .
     
  12. Firefly

    Firefly Frequent Poster

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    No. I'm just pointing out that I cannot see why we have such a gap between what those in the public and private sectors earn here versus in the UK.
     
  13. RETIRED2017

    RETIRED2017 Frequent Poster

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    Last edited: Oct 4, 2018
    I suspect a very large gap has opened up in the private sector between the top and the bottom in Ireland,
    Some in private sector is keeping up or passing out public servants doing similar jobs the rest are being left behind,

    I would also say the higher paid in Ireland have away better pension than the public services,(public servants also can use the same system as the private sector but in most cases don't use it )


    My pet hate is people pointing out that the public service have a defined benefit pension I would be in a position to know they have a large defined benefit pension pot away higher than any public sector worker all paid by the taxpayer,

    As I already pointed out on another post we took in 20 billion in 2017 in income tax we paid out 2.4 billion in pension tax break's

    If you were to break this down everyone would need to be putting away 30 % of income to claim back 12 % of 20 billion paid in Imcome tax,
     
    Last edited: Oct 4, 2018
  14. Itchy

    Itchy Frequent Poster

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    I laugh at these public vs. private debate. Dan O'Brien (and Conal MacCoille of Davy publishes these style reports too) is a trained economist and the only statistic he uses is average pay comparing this to average pay in another country. If this was submitted as peer reviewed paper it would be rubbished. It is not supported by any analysis of worth. I have yet to see an article that compares say Accountants in PS vs Private Sec, Fully Private Consultants vs Fully public consultants, Electricians/Engineers in Co. Councils vs. Private Sector. The average salary of people in Offaly compared to the average salary in Donegal tells us nothing beyond a crude indication.
     
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  15. TheBigShort

    TheBigShort Frequent Poster

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    This may come as no surprise, but I think DOBs article isnt very useful. Its hard to believe that he has written a full article on wage disparity, with repeated references to the UK as a guide, without considering any of the political turmoil that Brexit is fostering and the underlying reasons of why that vote went through, in no small part because of wage stagnation.

    I get the impression that he believes average public and private sector wages should be on par with each other? What he doesn't say is if UK wages should rise in line with Irish wages or should Irish wages reduce to UK levels. I suspect the latter, but given everything that is occurring in UK with Brexit, due in no small part to subdued wages, it is unfathomable that he could propose such a notion.
    He appears to consider that in 2018 that if wage levels reach 2008 levels that this is a bad thing. It would be interesting to know when he thinks it would be safe to reach 2008 levels? 2028? Certainly property prices, rents, energy, transport, groceries etc are all close to, if not in excess of, 2008 levels, so why not wages?

    Also to compare average public sector wages and average private sector wages is comparing apples and oranges.
    The private sector has an infinitely broader scope of trades and businesses that simply would not have any function in the public sector. A lot of those trades are often synonymous with low pay - fast food, hotel & restaurant, retail, hairdressing etc.
    If you excluded all the low pay work in the private sector that has no functioning in the public sector then average private sector wages would rise pretty quickly.

    So if you compare wages in both sectors with comparable jobs, then it tells a different story.
    For instance, do private medical consultants earn more than their colleagues in public sector?
    What about the General Secretary of a government Department and say a, CEO of a private bank?
    Im sure there are variances in both sectors with either doing better or worse than the other, but I suspect if it were analyzed in detail the 40% disparity would shrink considerably.

    I think this is a good starting point;

     
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  16. Purple

    Purple Frequent Poster

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    I agree; a 40% gap is nonsense.
    This is a much better analysis, though it is out of date.
    The real gap is much smaller. Those at the bottom of the raening scale do much better in the Public sector although the value of the Public sector defined benefit pension becomes much greater for those at the top of the earnings scale. The real gap, including pensions, is still there and is still significant but it is nowhere near 40%.
    The soft benefits such as paid sick leave, longer holidays, more flexible working hours and generally better T's & C's then those in the SME sector are also a factor although much harder to define or put a monetary value on.
     
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  17. Firefly

    Firefly Frequent Poster

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    Whether the pay gap between the public and sectors is more or less than 40% is, I believe missing a key point in the article:


    Since the public pay bill began to rise again in 2014, it has gobbled up more than half of the total increase in government expenditure.

    Last year, the EU-harmonised measure of public pay and pensions stood at €20.7bn, according to the CSO. That amounted to an increase of €2.3bn on 2014 when the pay bill reached a post-crash low-point. That was more than the increase in all other public spending combined.

    To put that another way, the rate of growth in the public pay bill has far outstripped the rate of non-pay government spending. It has not done so by a small margin or even at twice the rate. It has risen at a rate of more than three times that of other spending (to be precise, 12.6pc versus 4pc).



    Are we as a society happy for our taxes to be spent this way, on so few, when we have acute issues such as homelessness and healthcare? How can even more increases honestly be justified?

    As stated about, my wife is a public servant so perhaps I should do what so many do in this country do when something benefits them and keep schtum..
     
  18. TheBigShort

    TheBigShort Frequent Poster

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    Im not sure of the logic above. On the one hand there is a drive to resolve acute issues such as healthcare. On the other hand, if this involves recruiting more nurses there appears to be an expectation that this will not be reflected in increased public sector wage bill.

    There is a lot of drama in the comment above, but again, like the DOB article, devoid of any substantive analysis.
     
  19. Firefly

    Firefly Frequent Poster

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    2.4bn buys an awful lot of nurses!!!
     
  20. noproblem

    noproblem Frequent Poster

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    Lovely to read this thread as an ordinary punter and realise not everyone wants to lambast the public service. The likes of Dan O Brien, McCarthy, et others throw out their numbers without any true comparisons at all. Are there private sector nurses, teachers, etc? Then compare their salaries to public service and do the same all along the line to get a nearer average, otherwise cut out their blah, blah, blah. As The Big Short says, devoid of substantive analysis.
     
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