Comments on: Public sector versus private sector pay – update

By: Mark Ryan

Mark Ryan — Tue, 08 Nov 2011 18:21:39 +0000

Just to compare private sector pay versus public sector pay. The public sector do not seem to take into account the overwhelming fact that private sector workers wages drop when they leave employment. This is not taken into account in the stats when one compares private sector and public sector wages.

I am a private sector worker whos wages dropped from 365 euro a week to 188 euro a week (welfare). And yes I do hold a bachelors degree and postgrad degree and thats the wages I was on. Can you tell me one single worker in the public sector whos wages have been halved. No, coz they have a guaranteed job. So if i get one more public sector worker saying, “oh my friend in the private sector got a 4 percent increase in wages and coz of the croke park deal i didnt (but I am still getting wage increments, superior pension etc… but ahem I wont mention that)….” there is no reasoning with some of them coz they are so pampered. And by pampered i mean job security – many workers in the public sector work very hard such as nurses etc…

By: Further public sector cuts 'unavoidable' - Page 11

Further public sector cuts 'unavoidable' - Page 11 — Wed, 15 Jun 2011 16:39:24 +0000

[...] [...]

By: DC

DC — Mon, 25 Oct 2010 18:19:47 +0000

Just read CSO publication of average 4.4% cut in public sector gross pay ( excluding pension levies) while private sector cut was 0.7%! – I think IBEC, ISME and SFA call it sharing the pain ie socialising the failures of the private sector with everybody else. Hob cuts in teh public sectro were just 1% lower than private sector. Its hard to listen to commentators call for job reductions in the public sector-given the low pay and the imapct they have on the wider economy. Imagine a public sectro worker suggesting all car forecourts should close – to save money flows out of the country from car imports. They would be strung up.

The relaity, as can be seen from the reduction in GDP, is that the majority of the private sector is just one cheque removed from itself being part of the public sector – a €4m adjustment in govt spending in 2010 corresponds to a 2% redcution in GDP, yet our GDP has fallen over 11%. The private sector has not stepped up to the plate to compensate – but were in reality overly dependent on the government and its employees as a customer.

The private sector worker who got paid from his employer was really ultimately getting paid form the public purse for work done by the private sector for the public sector.

The public sectro worker offers labour and gets paid directly from the public purse.

We need to lose the notion of public good/private sector bad – a focus on the non PAYE sector who pay minimal tax from not delcaring income and keeping a thriving black economy going.

By: Ronan Lyons

Ronan Lyons — Sun, 21 Mar 2010 10:01:23 +0000

Hi fairness,
Thanks for the comment. To be clear, public sector pay was an issue as long ago as 2002 (see a variety of articles including one I wrote with Frances Ruane), but – as you point out – people didn’t really care because they thought the money was there. Now they realise that it isn’t. Just because people are slow to recognise a problem doesn’t mean that it isn’t a problem.
R

By: fairness

fairness — Sun, 21 Mar 2010 00:23:32 +0000

Funny why everyone is interested in the public sector pay and conditions now. They did not care when the economy was booming because most were creaming it!!! Most in the public sector are not overpaid and most work very hard contrary to what has been printed. Our pay has been savaged and still public sector workers are doing the same hours and have not taken to the streets at the unjustified targeting for billions from this mess. We must all pay even all you private sector workers (the majority) who have only been effected by low tax increases happy days for you to enjoy all the price reductions!!!!
there has been such rubbish printed in the media against the public service. We deserve to be treated fairly in the media and by this government. We have children, mortgages creche fees we do not deserve to be treated with such antagonism and biased and untruthful comments. Fair play to all the public service workers who have participated in the industrial action something most do not want to have to do. Most have never been on strike.!!!When you are threatened by having three net pay cuts in a year of course we are going to defend our financial futures wouldn’t you?? we want this situation sorted fairly.

By: Ronan Lyons

Ronan Lyons — Thu, 16 Jul 2009 09:48:49 +0000

Hi Tom, thanks for the comment. A couple of quick comments:
1. This isn’t scape-goating of public sector workers. Their pay makes up 65% of all Government expenditure and the gap between receipts and expenditure is greater than all non-pay bits added up together, so something absolutely has to be done, there’s just no two ways about it.
2. The gap between public and private is 30% AFTER accounting for things like degrees, etc. – it’s up to 70% beforehand!
3. Under no circumstances does a degree on its own merit a higher wage – it is only a signal to employers of higher productivity on average.
4. You’re comparing today’s apples with yesterday’s oranges when you compare yourself to your private sector friends. Firstly, you’ve compared your net pay with their gross pay. For a start, you would need to factor in their income levies, tax hikes, etc., as you have done for yourself. Most public sector workers have seen their gross pay increase in the last year, incidentally. Also, you’re comparing your private sector friends, who have always had to pay their way fully when it comes to pensions, with public sector workers who only ever paid a very small part, which has increased slightly in the last 12 months.
5. This isn’t “bashing” the public sector – it’s trying to show the sheer scale of the problem, a problem which 100% absolutely cannot be solved without cutting the public sector pay bill dramatically. Unless you want to make yourself and/or large chunks of your colleagues unemployed, it has to come from a reduction in pay rates. Incidentally, I have worked in the public sector and can attest as to how well it’s paid!
6. Your comments on competitiveness are certainly not misguided, but that’s an entirely different issue to the public finances. All the price reductions in the world will not bridge the gap between tax receipts (€34bn this year) and gross expenditure (€64bn). They may in fact reduce tax receipts, in the form of lower VAT, unless people spent proportionately more as a result!

By: TTMM

TTMM — Wed, 15 Jul 2009 21:15:49 +0000

Folks, I realise that the public pay is in a mess and yes we all take action but please this is not the public sector workers action and we must not be scape goated. A deep public / private sector divide has occurred. It is not fair to compare average public sector pay with average private sector pay. Remember that 54% of the public sector are graduates whereas only 32% in the private sector. Should graduates in either sector not be paid more. Is that premium worth 25% – ask yourselves in you own company to compare graduate salaries with those of nongraduates – what is the differential factor.

The ring fenced pension is no longer ring fenced and it is only a matter before the lump sum get taxed – I do not have a huge problem with that. However, please remember that any public sector worker while they may never be on the breadline, they have given up any opportunity to become millionaires that so may private sector workers became and many blew as a result of avarice now that we are in a down turn.

As a result of levies, tax hikes, I am currently 274€ a fortnight worse off than last year. My siblings in the private sector have not taken any paycuts at all. One sibling has gotten a 6% pay rise. Two companies I work closely with in the food industry have given their workers a 6% pey increase at a time when farmers (the suppliers of raw materials) are getting pittance!! This is hardly social responsibility!!!! IBEC have confirmed that only 23% of companies have introduced pay cuts, at an average of 3.4%. As regards the shorter working week many companies that work Tue, Wed and Thurs – this allows the employee to draw the dole for the remaining 3 days as saturday is included – this means the worker is entitled to 50% of the dole.

Finally, I have to ask all of you who do bash the public sector, if it is that good why have you not joined – main reason – most of you felt there was more fat to be gained in the private sector – now that the times are tougher you wish the public sector to bail out the whole country while the private sector enjoys pay cuts. What I mean is that we all made decisions and pitting against each other will not help, however, until we all readjust wages, costs, etc by 15 – 20 % we are going no where in terms of competitiveness and its the companies that are giving the 6% increases that are causing the most problems as they are reducing our competitiveness big time. If these corporations can afford the increases perhaps the Government should include corporation taxes. Please also remember that many private sector jobs are the result of public money incentives – therefore private secotr cannot be totally ungrateful to the tax payer and now must also play their part.

Lastly, what we should all be doing is shopping around and demanding price reduction – yes there are special offers e.g. in my filling station, coffee is €1.70 as it was last year. They do a coffee and a muffin for €3.50 which saves €0.40 from last year but I do not wnat the muffin so please make my coffee cheaper – point is we should be demanding cheaper food, insurance, ESB, VHI, telephone etc.

By: kevin denny

kevin denny — Tue, 14 Jul 2009 22:36:21 +0000

Yup the evidence is clear enough. However averages conceal as well as reveal. I suspect the differential varies across the distribution. I don’t know these comparisons take pension entitlements into account. I presume they take no account of the benefit of security that many of us in the public sector enjoy.

If you want to reduce pay rates then at the bottom you will run into the minimum wage so you have to reform that too. Joined up thinking is not a hallmark of policy making here. Bottling out of this is politically easier, the usual rhetoric about protecting the most vulnerable always goes down a treat. But there is no free wage-compression.

By: Mossy Heneberry

Mossy Heneberry — Tue, 14 Jul 2009 16:55:53 +0000

Ronan, there is no way that the private sector pay is around €40,000 on average. The chart for private sector only goes up to 2008, which I’m sure you are aware of anyway.

If you also take into account that the private sector has taken some or all of the following: wage cuts, no bonuses, reduced working week (therefore pay), reduced commissions,cancelled overtime, working longer unpaid hours, pension decimation and other perks and benefits lost, that €40,000 figure is a cloud cuckoo land estimate.

Now how do we put a monetary value on having a job for life? In the 80′s and 90′s garda, teachers, nurses, firemen and prison officers were snapping up properties with investment loans because the banks saw them as a safe bet. And how do you factor in a gold plated pension? What about the fact that some public sector workers can retire in their fifties?

By: David McManus

David McManus — Tue, 14 Jul 2009 13:35:59 +0000

I agree about what needs to be done.
@ Karl: If the public sector was to go on strike all we need to do is employ Mary Harney’s tactics from a few years ago with the nurses.Simply don’t pay them!
If they spend 3 hours a week on strike,then deduct their pay by 3 hours.Very simple but as you said we need a strong government to do it.