Public Pay and the Sindo

Bravo, Karl.

@ Karl

Why did you force me to read all that cr*p?

Don’t be too sensitive. The Sindo seems to specialise in airing a wide range of views including even sensible voices like those of Colm McCarthy.

Gene Kerrigan is an out and out old world leftie who believes that public service pay (at least below 100K) should not be touched. The editorial line is unremittingly anti austerity and anti German.

@Colm

Will the “explicit comparisons of PS pay with the UK and other countries” use PPPs, or will we just engage in the typical Irish exercise of converting one figure into another (at today’s exchange rates and taking no account of relative differences in the cost of living) and then howling with outrage?

There are a lot more cuts needed, that 3 years into our crisis, the rent allowance is most definitely creating an artificial floor on the residential market is insane.

Certain departments still spend Capital Budget as though they feel obliged to…etc etc

On public pay: the ESRI reports do confirm it was the lower paid who got the greatest increases, this was vote buying by one B Ahern, and will need to be reversed….and there’s still widespread denial about this….even though wre’re broke, and similar private sector pay is way lower.

I appreciate the point but I think you might be attaching too much importance to Eoghan Harris’ weekly social diary.

@Karl

“I don’t believe the government releases figures on the net cost of the public sector pay and pensions, subtracting taxes and levies, but I would be surprised if it was more than €11 billion.”

Here the DoF does publish figures called “Net Public Sector Pay and Pensions Bill”.

Althought, given it is 18.5bn in 2009 (versus a gross of 19.9bn) I assume it is not net in the sense hoped.

Eoin Harris is a cartoon character and a even bigger Dork then myself – its best to not even engage.
The fiscal thingy is merely a financial metric , not a reality – stuff goes in to pay stuff going out.
The economy is being run and always has been run in the interests of powerful men not as a real live independent entity.
I think Diarmaid O flynn deserves much praise to call the bullshit for what it is and also for actually doing something real if not very successfully to highlight this silent assault on us stupid Micks.

Maybe its time for Cork & Munster (you can have North Tipp) to break away from the Pales cold dead hand.
If the Goverment of this country had any honour they should resign en mass today and call a end to this rule by Robber Barons.
Maybe it will come down to the clans of north & west Cork saving your sorry tight asses again up there in a absurd town called Dublin.
Revolt is not a dirty word when you have Tyranny present in your house.

@ Karl
Wouldn’t take him seriously.

Wasn’t he a judge on Glas Vegas or something..
Not that I ever watched it …. honest!

@Eoghan Harris

Waffle waffle waffle, blah blah blah.

Nothing new 🙂

Public sector salaries need to be cut by 50% and welfare and the raft of benefits need to be cut by another 50% for obvious reasons the primary one being we are bust. The tax net needs to be broadened and the people that caused the calamity must not be punished and not allowed to sit and draw down fat pensions and other entitlements. The private sector is rapidly running out of patience with all the various scams and all the variations on [NIMBY’ism’s] NIIMS NIIMP (not if it’s my salary, pension etc). The game is up!

Otherwise, someone can come on here and tell me how a state that takes in 33bn and is living on the most precarious of borrowing and which spends 21bn on Welfare, 14bn on health, 9bn on education and which will have to spend 8bn or 1:4 Euro’s raised by the state to servicing debt, end of 2013 is going to survive without further Bailout’s.

@Karl Whelan

‘Status Anxiety Twitch’ is apparently rampant in Belfield at the mo; it is even worse in UCC; in fact it has reached epidemic proportions in all Irish third level institutes recently – bar one. Empirically this can be supported by the 13,567% increase in prescriptions for anti-anxiety and anti-depressant medications to the ‘status anxiety twitchers’ on the faculty of all such institutions in the past few weeks. Private health insurance has rocketed; students will fail to understand a single word spoken by … er .. [if not in Trinity, and you wish to continue reading, please take a little prof_envy_green_pill right now – then lie down for 30 mins before reading on] … LECTURERS (Ohoooo does it hurt that much?) in the upcoming academic year. Not too good for the deficit; and a disaster for the ‘knowledge economy’.

Karl – it could be worse; he might have called you a Platonist … take a leaf out of Sean Boylan’s book;

@Eoghan Harris
…. it is about high time you got off your Ar1setotalian high horse and write that modernist sequel to Souper Sullivan set in the Ciceronian confines of the Senate in The Age of the Gougers; The Rubber Bandits from Limerick will supply the Horse 😆

@Karl Whelan

On substance of your post ~+1 But then again, you are Only a UCD Professor ….

As a private sector employee who regularly visits public sector labs, I would look at this from another angle. Pay cuts is not really the answer but actual severe job cuts is required. Every single public sector industry I visit in my field is vastly overstaffed. This includes state labs, dept of agriculture labs, vetinary labs and hospital labs. The exisiting staff were under worked compared to a similar private sector industry and is an accepted point among staff. Most are taken directly from college and the system is in-grained into them at a very early stage to go with the flow in regards to lack of work ethic. This system has been handed down from previous generations and continues today.

The amount of work they can perform has collapsed due to budget contraints. In the private sector, many including my collegues lost their jobs when the costs of employees no longer made financial sense. The public sector remains untouched and a stroll through any public lab will find many with nothing to do. They would argue they want to work but budgets stop this, which has a truth to it. That same argument does not stack up in the private sector but is firmly belived in the public sector. Why is no cost analysis applied to the public sector and acted on by government departments. Staff cull is the fastest way to cut costs.

A major cull will not sort out costs of pensions or redundancy payments but it would go a long way in levelling the playing field for all and bring the various departments in to the real financial world.

@Colm Mccarthy/ Yield

There are sensible and reasonable steps that could have been taken in PS pay without waiting for the outcome of benchmarking etc.

1. Cut the top three points of all scales that finish above say €60,000.
2. Cut top level pay to a max of €120,000
3. Freeze all increments above €40,000.
4. Pay all tribunal/other expenses on hours worked per a published ‘reasonable’ scale.
5. Tell the barrister who already earned €9 million from the tribunals and who gave an ultimatum to the government to pay him a concluding fee of €20,000, or he would not reduce his fee by 22%, that his fee is being reduced by 90%. [SBP today(Pat Leahy/John Burke)]. Imagine what Michael O’Leary would tell him!

There will be no buy-in to cutbacks etc while the first class carraiges are still dining on caviar.

Taxing & cutting the wrong things me thinks……………………………
Synthetic Tariffs ?

@ Karl
That sounds a bit ominous.
Do they really need to cut pay when they really just need to increase the universal charge. I could be wrong but I think a 10% increase in thus could be the same as a 20% cut.
If they were to fiddle with tax bands, allowances and the USC (with a major rate for high earners) they could achieve savings equivalent to a pay cut of 20% over each year. This would also avoid union confrontation

@Karl
There is no ‘may’ about it.

@Overseas commentator
“There is absolutely zero chances that the budget will be balanced in 2013 ”
Well, no.

Unless by that you mean it will be either in surplus or in deficit? Only using a standard model and factoring in current knows do you get to zero chance. The world doesn’t work that way. If Greece are forced to ‘voluntarily’ default, they may well have done with the euro. If they leave (and it is a bigger risk to us than a default), Portugal and Ireland may be pushed to be next, not least because there is a domestic audience that believe it would be a trivial matter to leave.

Leaving the euro, in at least some scenarios, would require a balanced budget.

@Karl Whelan
PS What I meant to say was – social welfare must pay for itself. The social insurance system only really works if it does. It should not be topped up by general taxation – it should have a surplus to bring into a cyclical downturn. Otherwise the automatic stabiliser is going to cause a government solvency crisis every time it kicks in.

@Hoganmahew
Do you propose another social welfare cut ? If so your solution is surreal in a country whose faith is sealed to the banks – social welfare spending is the most closed spending in the state.

You cannot divorce the fiscal stuff from credit until you actually get a real divorce.
Your savings would be artifical.
The patient is bleeding externally not internally – so therefore you stop the bleeding , and if you can’t you don’t stop the most effective plasma.
Imagine what would happen to shopkeepers who experience another drop in the money supply from a dole cut , how could they pay their private debt ?
When they default on their mortgages the debt will become sovergin……………………again….. because we are good little children.

That link should be:

http://sohdan.blogspot.com/2007/10/troll-of-sorrow-wildlife-sanctuary.html

Karl – for a former central banker you display a gross ignorance of money.
You recently said a term deposit is money – when it was nothing of the sort.
Its a loan to a bank.
You just cannot imagine money that is not debt – your thinking has ruined this country.

@ Overseas commentator

I agree with you there are so many people educated, smart people departing for the black economy and many of them are doing it as a badge of honor because the government have lost all moral authority and respect. What with Croke Park, NAMA, raids on private pensions people feel betrayed.

Agreed, we will need bailout upon bailout and John Corrigan of the NTMA mentioned that friday. Most of our lads that come on here to give their erudite opinions will keep their fingers crossed, “hear no evil, see no evil and most of all, speak no evil” or reiterate no evil. They hope that they can avoid a 50% pay cut, a 40% cut even a 10% pay cut because they feel they have taken enough pain already.

Anyone who talks about cutting academic salaries always gets the silent persona non grata treatment. That is one of longest established rules of this blog, one that I am well aware of. That said, I have to admire Morgan Kelly and Dr. Edward Walsh the only two academics that have called it for what it is, a national emergency which requires sacrifice and leadership, rather than the “count me out, but here is my partial academic opinion”. A student of psychology would say that this is a defense mechanism and hardly surprising i.e. hide behind benchmarking, unions and Croke Park while preaching about rescuing the economy by any means possible except cuts to one’s own salary and conditions. That is precisely why we are in the mess we are in and because most of my friends work in these jobs I have to listen to it almost every day.

The acid test, if you require one would be to go to the UK and demand the same salaries there, you would be scoffed at and told, “sorry, this is not Ireland”. How did salaries get so out of kilter here? Two words “Bertie” and “Unions” and if you need an alternative explanation, try Michael D’s famous Dail speech where he witheringly says. “ye all sat on each others remuneration committees”.

One way to look at the situation is to estimate how long will the economy remain in a fragile state — 5 to 7 years at least? ; unemployment to remain high through the decade.

In the period 2001-2007, if the construction and related credit booms are set aside, there wasn’t much else booming.

There is no obvious engine of jobs growth now and absent a recovery in construction which impacts a large network of agents, a shallow recovery domestically would boost Tesco’s imports of food from the UK and Dunne Stores imports from China – – a simple example but realistic I think.

Bord Snip lifted many rocks and came up with over €5bn in savings.

The usually argument is that x or y proposal will not have a huge impact but add it all together if there is the will.

Greece again announced cuts in the salaries of public officials yesterday.

A Swedish MP’s basic pay is 27% lower than counterparts in Ireland; expenses are low compared with Ireland’s. In addition to the TD’s lavish expenses (including cash to buy lunch), each independent get over €200,000 tax free over a Dáil term (independent senators get 50%) without having to provide any detail on how it was spent. It is an outrage and dates back to 1997.

In Stockholm there’s no opportunity to pay off a property from expenses as there is in Dublin; taxes are also much higher.

Is it austerity to call a halt to this carry-on and much more?

Karl is perfectly correct to challenge this nonsense head-on – particularly when he was named in this op-ed – and he is equally correct to highlight the economic illiteracy and public policy incoherence presented in these nasty witterings. But, for the rest of us, the requirement is to broaden the attack on the Indo’s editorial policy since the op-ed that justifiably annoyed Karl is but one manifestation of this overarching policy.

This demented focus on public sector pay, as Karl poiints out, ignores all other elements of public expenditure largesse and the narrowness of the tax base. Seamus Coffey recently provided data and information on state transfers:
http://www.irisheconomy.ie/index.php/2011/09/07/transfer-payments/

It runs totally counter to common sense by expecting public sector workers to cheerfully accept swingeing cuts in pay and to then become super efficient and productive in the delivery of public services. This requires a well-structured and phased programme of reform that secures buy-in at all levels. (This, of course, does not imply that the current programme could not be pursued with more urgency.)

But most of all it ignores the ‘social welfare’ received by private sector bsuinesses and not only in the form of grant-aid, supports, ‘tax expenditures’, etc. As I commented on a previous thread:
“The amount of ’social welfare’ – both implict and explicit (and in deadweight costs imposed on final consumers) – provided by the state to businesses in developed economies probably swamps direct transfers to ordinary citizens.”

This is the most insidious and economy-damaging nonsense being perpetrated as it omposes excessive costs of most citiziens and final consumers, in increases the cost of living and depresses disposable incomes across the board.

But do you think the Indo would attack this? Not on your nelly. Public sector workers are a soft target.

Karl says

‘So that’s why I dislike the Sindo’s coverage of public sector pay. It leads its readers to believe that there is a simple single bullet solution to the deficit and, via that logic, to a demonsation of a particular group as the cause of our problems’

That is a net point, and a fair one in my view. As Colm McCarthy points out, the public sector is a varied landscape, where some employees are far from well off. Michael Hennigan makes some telling points about comparative international rates and calls once more for reform. Others posts back that up.

IMHO, the core problem is the debilitated state of our republic. Senior public servants, including university heads, have been allowed to develop lucrative personal fiefdoms. A spoils system. The grip which these ‘bureaupreneurs’ have had on high level recruitment and public sector procurement has enabled them to move smoothly into the elite circles of influence traditionally inhabited by our propertied and professional classes. Way too cozy.

This executive dominance, and accompanying governance vaccuum, has extended to the upper reaches of the unions, with a cascading series of cosy deals done under partnership to keep everyone sweet. One of the reasons ordinary PS employees aren’t stirring themselves, is the catastrophic decline in respect for management. The sweeties have run out.

Further cuts cannot but deepen cynicism and alienation, and may well lead, as mentioned above, to a culture of moonlighting and backhanders. Anyone who imagines that this can be ‘managed’ should read Michael Lipsky’s ‘Street Cormer Bureaucracy’. The bedrock of public service is personal responsibility. When that goes, look out below.

This problem goes way beyond fiscal issues. As Charles Moore said of Britain ‘we are morally and actually bankrupt’.
http://news.bbc.co.uk/2/hi/programmes/newsnight/9576473.stm

The challenge is one of reform. It doesn’t have to start at the top, but the top cannot expect to be exempted in the usual fashion.

Dork rightly condemns the financial takeover of the real economy, and identifies the self defeating nature of austerity programmes. Anyone who reads Steve Keen or Bill Mitchell, or has any familiarity with MMT, knows that orthodox economics has been going down a cul de sac. None of that takes away from your original point.

I’m a bit surprised no one on this thread has referred to Jurgen Stark’s opinions on Irelands PS pay rates. Our multi-bailout future is most reliant on the likes of him…so I’d have thought we’d be paying more attention to what he thinks rather than Eoghan Harris’ latest ravings.

http://www.irishtimes.com/newspaper/breaking/2011/0912/breaking8.html

@Jarlath,

Despite the headline , there are no quotes referring to PS pay in that in that IT article. Not a single one.
One quote refers in general to improving “downward wage flexibility in Irish employment contracts”. That’s as close as it comes.
Not just the Sindo that’s pursuing this agenda.

If Michael O’Leary’s flying sweatshop is supposed to be a model of enlightened management, lord help us all. We’ve already got plenty of would-be Michael O’Learys with their 1980s (if not 1950s) business-inspired bullshit with all its right-sized synergies going forward. The fact is that large parts of the public sector are not businesses. They have (and depend on) an entirely different ethos (and, no, this shouldn’t include abuse of sick days by some). O’Leary-style “management by control” that doesn’t recognise the commitment of most PS workers would be a catastrophe.

You think Google and Apple crack the whip and underpay their staff à la RyanAir?

I have been listening to Minister Joan Burton rail rightly against welfare fraud. She was talking about clawing back 2% maybe 3% out of a total budget of €20 billion. Worthwhile but surely a cap on the upper limit of welfare is desirable? The cap in the UK proposed in the last budget pulled rates back under the average industrial wage.

I also don’t know why private rent supplement is still pumped out at current rates given the price of residential property. Three/four bed in Dublin, currently the landlord receives at least €1000 per month off the state.

Reducing public sector pay rates will push even more people into mortgage default so it will be interesting to see how the government balances the equation.

I gave this example before: when the Single Payment System was introduced, an opportunity to redeploy or reduce the numbers in the Dept. of Agriculture was missed. Cutting numbers and having an tight recruitment ban seems a better long term strategy. There is too much duplication in the country – local authorities, third level institutes, agricultural offices, etc. The problem is that every interest group sees itself as special and deserving of a deal outside the door.

I am currently trying to complete my 2010 income tax and 2011 preliminary tax return. This will show that I have a massively increased tax bill to pay by mid-November due to the increased levies etc.
I have already paid a substantial amount of PAYE tax on my rapidly shrinking private pension fund. I don’t like this situation one bit, but this is the real world we live in and I have to go along with the situation if I wish to continue living in Ireland in 2011. I realise I am very lucky to have a nice home and not have to worry about putting food on the table or heating the house in the winter. But my plans to have a secure retirement income, medical service etc. are rapidly disappearing and are mainly outside my control at this stage of my life.
BUT – Why should I pay any more tax to fund the obscene payouts to retiring politicians and senior “public servants”? Why should I pay any more tax to pay the ongoing salaries and pensions of vastly overpaid senior “public servants”?
It’s not a question of how much would be saved by reductions in line with other countries to competitive levels of public sector pay – it’s the fact that until these adjustments are made our government will not have the moral authority to take any more tax from myself and many thousand others in similar situations.
It’s no excuse to argue that these amounts are due under contractual arrangements. The “contracts” were “negotiated” by two parties who were both beneficiaries at the expense of taxpayers. The employer cannot pay. Ireland is broke and yet continues to borrow to pay politicians and senior public servants pay and pensions and also welfare rates higher than those in the countries who are lending us money. This is a combination of Alice in Wonderland and Zimbabwean political economy!
Karl is absolutely right that cutting senior public sector pay will not solve our problems but until it is done how can we convince others to accept the cuts in welfare, pensions and increased taxes that are also required.

@Yields or Bust,

I take your point, but contributing to the setting off of one group in society against another is not helpful when some effective, equitable governance is required to get us out of this mess. And I also believe that some account must be taken of the government-authorised ‘largesse’ that the private sector enjoys. Much of this is often implicit and below the line; whereas any allegedly enjoyed by the PS is explicit and above the line.

Let’s have a look at the ESB which exists in a convenient no-man’s-land – it’s private when it came to pension levies, but is public in most other contexts – and whose workers’ pay has been the subject of concerted attack by the Indo. It is the ownership, structure and financing of the ESB – and not workers’ pay levels – that are imposing excessive costs on final consumers. However, the ESB (and BGE) has been successfully in its behind the scenes lobbying efforts to ensure that the detailed assessment of the electricity and gas sectors demanded by the Troika has drifted out to end-June 2012.

It’s very easy to construct this caricature of lazy, over-paid, risk averse PS workers, but it is a very useful ploy for many to distract attention from the state-authorised largesse they are enjoying.

@ Paul Hunt

are you saying the ESB is a private sector company receiving govt largesse?

Personally, i would say it is a public company screwing the private sector, and the halving of capital spending over the last few years will tell you all you need to know about government contributions to the private sector. I dont see any other area of govt spending taking a hit like that.

@Jarlath,

No. It merely confirms Karl’s focus on the inaninity of the Indo’s one-eyed (and swivel-eyed) focus on PS pay by extending the argument to the semi-states. The relationship between Irish capitalism and the role of the state is profoundly dysfunctional, but most Irish economists rarely acknowledge this – not to mind begin to tackle it.

@Shay

I too would not be overly happy to see a Ryanair equivalent running the education service – I’m not suggesting same. What I suggested above was that a significant problem has emerged over the past number of years where really poor management has allowed large parts of the PS to become unmanageable – if that makes sense. I’m suggesting that a Ryanair style management culture would simply not tolerate what went on for years. Nobody can argue otherwise.

Perhaps someone can explain to me what’s so wrong in demanding an almost fundamentalist focus on value for money in the PS.

The shorter Michael Hennigan: Our, er, your society is unequal! Let us solve this by a race to the bottom, led by the state!

@ Dork

No idea what you’re talking about, but it was yields or bust who brought up Ryanair, you can turn your fire on him.

My compliments to Karl on his well balanced and perceptive post.

@ Tom Paine

“It’s no excuse to argue that these amounts are due under contractual arrangements. The “contracts” were “negotiated” by two parties who were both beneficiaries at the expense of taxpayers. The employer cannot pay. Ireland is broke and yet continues to borrow to pay politicians and senior public servants pay and pensions and also welfare rates higher than those in the countries who are lending us money.”

The country is not broke. Money is being lent to us from outside.

If and only if the external funding disappeared, then we would be broke, and maybe a “scaleback” of wages etc in the public sector and connected private sector (deloittes, accentures, PWC, lawyers etc etc) would take place.

But out bills are being paid…and this allows the status quo to remain in place.

Until this situation changes, the catharsis you are looking for will not happen.

Theres been worse than Dork here, but Phil has a point.
Can Mr Dork self govern on this?

Dork
You have no idea what I believe, a view reciprocated. What I do believe is that you believe whatever it is you do believe very fervently. Great. But
a) none of us can understand your comments – thats not to say we wouldnt agree if you could explain in simple terms what it is you are on about
b) few appreciate the constant, incessent interjections of whatever it is you are on about
c) if you dont think money has real value, can I have yours?
d) I suspect most people would take your views more on board (assuming they could understand them) were they not pushed down our electronic throats every second post, regardless of the topic at hand.

Sure Phillip II – I will take your advice
I think I will give it a rest for a while…….
But I will finish with this – Money has no intrinsic value , it is just a symbol but the most important of symbols and in my now obsolete view it was the symbol of state at least to a limited extent under the sovergin state model.
When Karl lumps our money in with credit deposits he dilutes the power of this state to become a servent of the banks – they now have full control of the money concept………..
The actions of the last few years illustrates that all efforts to “save the system” was to save the central bank network and not the industrial end use ability of states to provide for its citizens – this is obvious even to a Dork.
Sayonara

I am not sure that the Dork makes complete sense but his postings are a useful corrective to the dour (and proven worthless) economic consensus that refuses to acknowledge that this is a crisis of capitalism requiring a fundamental change in the economic system and control of international finance.

Relatedly here is Krugman piece on economists failing to predict the consequences of the housing bubbles collapse in the US and the general funk in macroeconomics: “Why we failed.”

http://www.palgrave-journals.com/eej/journal/v37/n3/full/eej20118a.html

My best answer is that they were caught up in the spirit of the times, with its faith in the wisdom of markets and of the financial industry

When I read postings from professional economists on TIE, especially those involved in the current government’s approach, I rather feel that they are still caught up in those times.

It is a curious thing. We had a massive failure of the markets to efficiently allocate resources and a massive failure by the financial industry to evaluate risk.

However when asked what the real problem is almost every single Irish economist close to government answers it was really “Too much state and not enough market.”

It could drive a Dork mad, but it leaves me angry, disappointed and even a little surprised. Ireland’s “serious” economists appear to be good for little except explaining how a market failure means we need more market discipline, and a banking failure means we need to bend our states purpose to supporting them. Comforting the comfortable and afflicting the afflicted.

Well done all I suppose.

@Dork

Despite the protestations of others I say under no circumstances should you desist from your posts. Just because others don’t understand your view is not a good enough reason for you to stop expressing it.

Like most things in life it demands that others try to understand and you explain your position in less floral style. I’ve no doubt a meeting of minds is somewhere in the middle.

Groupthink is always a dangerous pastime, let’s not go down that route.

Interesting stuff in this Reuters report, focused on education cuts

http://www.reuters.com/article/2011/09/12/us-ireland-cuts-idUSTRE78B31L20110912

grumpy +1

@ Ernie Ball

The shorter Michael Hennigan: Our, er, your society is unequal! Let us solve this by a race to the bottom, led by the state!

Race to the bottom – – what an interesting cliché in defence of the status quo.

The next cliché to use will be ‘class war’ as the defenders of inequality use in the US.

Did you not know that people eating from the same trough as you have promoted a policy for the private sector of having employer social security costs close to the American level of 6.2%; it would have some element of fairness if these insiders applied the same rules to themselves and people like you. The same people reduced corporate taxes from 40% to 12.5% for local business owners while leaving the workers facing pensioner poverty or being accosted at race meetings by a well-meaning staff member of the Pensions Board flogging a private pension, even at a time when they were still making losses, and the PB board member like yourself, was on a gilt-edged unfunded system.

Isn’t it strange that traditional trade unions find themselves in the same boat as the gougers among the professional class in the private sector, in resisting change.

There appears to be a tacit agreement between them not to interfere in their respective rackets.

Race to the bottom indeed.

@ Shay Begorrah

However when asked what the real problem is almost every single Irish economist close to government answers it was really “Too much state and not enough market.”

Where the balance in a mixed economy should be is a matter of argument and evidence.

What are you arguing for that Ireland should have more monopolies or near monopolies like the ESB and RTÉ where the public interest is invariably put first or a reversion to the Department of Posts and Telegraphs?

Or expect more of senior civil servants given their stellar record?

@Grumpy,

Wow. That must have been building up for some time 🙂

Your comments on the economists are perceptive. Even the few who have achieved a certain position that might render them reasonably safe from the wrath of the ‘powers-that-be’ pull their punches, speak in code or mention areas ripe for reform but find that unfortunately their expertise doesn’t extend to these areas (while those who have expertise remain silent or dissemble). Most are in thrall or beholden in some way to the government machine. Those who have not achieved a position of safety from the wrath of the ‘powers-that-be’ generally keep their heads down – their views expressed quietly, privately and sotto voce. And if they are in some way beholden to the government machine (or operate within it) and are required to make public utterances they will finely calibrate these to ensure only the revelation of the amount of truth that it is safe to reveal.

(It is interesting that it took an economic historian to break the omerta.)

The effect is to close down the debate and to leave the field open for the know-nothings, ranters, spin merchants and spoofers. If those who know fail to speak out the public interest is damaged. It is not for the general public to demand the presentation of the expertise required; they do not know – nor should they be expected to know – where it resides or precisely what expertise is required – even if they are paying for it.

It’s simply that too much resource and competence is monopolised by the government machine. If that’s the principal source of reward, prestige or the ability to influence, the silence is not surprising.

@ JudgeJohnDeedes

You make the most sensible of points these salaries (which are a significant part of the problem) can only be paid for by bailouts. The perceived injustices are doing as much damage as the overpayments themselves. That can be measured in consumer sentiment. Many people simply want the old system of entitlement and smugness to die on the vine. In any event the real damage was done by people on these salaries making disastrous errors which led to systemic failure of the banking system and regulatory authority. Let’s not overlook the fact also, that agreements negotiated, for and on our behalf, were carried out by state officials, who knew they would benefit directly if they caved in to union demands. To make matters worse many of the union leaders then decided to benchmark their own entitlements on what they were “negotiating”. So contrary to popular beliefs there are individuals in the “private sector” with public sector “entitlements” salaries and pensions, they are called top union executives.

Then there is the hidden time bomb. Pensions. Wait until the 130bn contingent liability for state pensions becomes more than a contingency starts to impose more and more disorder on our current budget deficit. The fun will really begin, as our EU and EZ partners take a closer look to see what is going on in dear old Ireland. In the real world, though, that will not be their concern as we will be left turning in the wind by then. At the moment, our success is being measured according to our ability to convince markets that we are tackling our problems. Hence the heroic efforts of ESRI etc. Herr, Stark’s comments are a flavor of what is to come. Nothing will change from within as you say until access to borrowing is cut off. That point is inexorably approaching.

@ Jackh,

I like this bit…
“That’s why they came up with economically illiterate nonsense like affordable housing for people earning 50k+.”

It highlights the madness and reminds me of the wage comparisons for Prime Ministers. Nestled at the top was our supreme glorious leader (see graphic http://www.ft.com/intl/cms/s/2/eee43b4e-1779-11de-8c9d-0000779fd2ac.html#axzz1Xkeu3hqj). From this article – “In October 2007, a mooted €38,000 increase in the salary of Irish Taoiseach Bertie Ahern, which would have taken it to €310,000, was deferred in the face of some outrage.” I guess (Irish-style) benchmarking justified that €38k and would have happened only for those pesky doom-mongers and Lehmans.

Tip of the hat to the grumpy one!

@Ernie Ball
“You think Google and Apple crack the whip and underpay their staff à la RyanAir?”
Whatever about Google, where do you think Apple build their products? Do you really want to outsource large parts of the PS to China?

@ Ger

Total public sector staff plus pensioners is about 505,000 with 53,000 in commercial bodies.

@Ger

It’s worse then that. Even economists like Morgan Kelly, who should be expected to know such things, confuse not just public service and public sector but think that all in the public service are “civil servants.”

@ grumpy

+1

@JtO
“anyone who gets attacked in the same article as Conor Cruise O’Brien gets praised moves up several notches in my estimation.”
True enough +1
Admittedly I rarely read Harris’s narcissistic drivel – but his admiration of that arch Machiavellian CCOB borders on hero worship. But I would have thought that his praise of the other Machiavellian (Bertie) would have rated Karl another few nicks on your tally stick?
BTW – off topic of course but who thought it was a good idea to invite neo- Unionist Harris to do an oration at Liam Lynch’s grave? And he despicably labels of Florrie O’Donohue as sectarian terrorist.

@celebrity economist

Stark is yesterday’s man. It’s not clear that he speaks for anybody.

@Grumpy

Very well argued piece. You captured the nuances of this issue very well. I am a PS worker but I realise that terms and conditions are completely out-of-line with the private sector. I also think you hit the nail on the head on another issue: for example, Special Needs Assistants have summarily had their hours reduced in many schools and there was no argument from BL (RIP) or Michael Noonan that, unlike the bankers, they had binding contracts and their pay could not be reduced.

I think that in a small country like Ireland very many economists keep one eye on the potential for lucrative State consultancy contracts, nominations to State Boards, etc. Remember that it will often be senior civil servants drawing up such lists or, at least, will have the opportunity to raise objections. It would be entirely rational, utility maximising behaviour to keep quiet on such issues as pay and conditions in the civil service and wider public sector.

@ Dork

I haven’t a clue most of the time what you’re talking about but I defend to the death (well maybe not that far) your right to say it.

My God, this blog is in danger of becoming the next Sindo itself. The amount of reactionary rubbish on it is impressive and growing. Apart from Michael Hennigan who has a long record to point to, I wonder how many of the commentators above gloried in the Celtic Tiger Bubble? How many bought into the housing hype? None huh?!?!? How many have actually changed their minds about anything over the past few years, and now instead of revision know rage that must be directed somewhere? And why pick somewhere sensible when there’s a public service to bash. Hell one commenter above even called us a Pariah state. Like WTF???

I wouldn’t agree with the Dork on everything and at times he can be a bit cryptic, but to be honest, he’s one of the few commentators that consistently looks to the core of the issue. What we’ve had is a financial system collapse in the western world. The only thing holding it together is government. This is not the fault of the public service, inefficient as it may often be. It is not the fault of even over paid public servants, which many undoubtedly and even outrageously are, and which by the way a much fairer way of dealing with that would be through the taxation system, but not many here ever espouse that – I guess because high paid private sector workers would have a net pay cut also, and how many in this parish would that effect? It is the fault of a failed paradigm, a system of thought that is not fit for purpose and yet is still espoused by many above including all the academics that post.

For a change, how about a post that actually looked at MMT, even with a critical eye. Or how about engaging with the work of Steve Keen. Instead we get a thread with 112 comments of which I can remember only one (other than the Dork) that mentioned the impact of cutting wages on personal debt. Without including that the rest of it is verbiage disguised as outrage. Sounds like the Sindo, and like the Sindo, it’s bad for your health.

@ Rich

Is this what Nassim Taleb called his “Black Swan” event? Swans always seem to crop up again and again in our history.

or

Soros talked about the how an approach that once produced valid results (screwing willing government negotiators) becomes over exploited and overburdened to the point where it is no longer valid” and I might add, ‘advisable’. Soros, “called this his postulate of radical fallibility”.

@ Bunbury

As someone who studied industrial relations for 4 years, I could see that the unions were just as irresponsible with their members futures as Seanie and Fingleton were with their grasp of the principals of prudential banking. Any rational negotiator could have negotiated salary increases for the public sector that were both rational and sustainable. It is never about exploiting a fool who is only interested in power for a short number of years and who was always going to walk away to write his memoirs. For lower paid public sector workers those below 60K I could have negotiated a deal that did not allow your pocket to be picked, by your (in theory) more powerful trade union colleagues. However, you all preferred to buy into the Croke Park fantasy and are now being shuffled to the edge of a very steep cliff.

@ all

Dork is a Leeside jester, and a bit of a latter day brehon. Now and again there is a short circuit between the two ends of his brain, but mostly he is very good humoured and entertaining.

Steve Randy Waldman needs a bit of concentration, but he has a very high class line of chat on economic matters. Anyone who is wondering what the Dork is talking about might find this sort of thing useful

http://www.interfluidity.com/posts/1256656346.shtml

I suppose that includes you too Dork 🙂

@Robert Browne

You wrote: he evidence is this, Morgan Kelly the most prescient economist in the country has stated baldly that he is 100% overpaid.

Well, it turns out the most prescient economist in the country is wrong about that.

@Ernie

Sorry Ernie your blog is not weell referenced and you should declare any vested interest. Clearly international professors look in awe at their Irish under achievers
http://www.worldsalaries.org/professor.shtml

Kevin

Do you mean the minimum wage in Poland? Cause that where we are headed in terms of wages

Unlike the Polish we cant afford your extradinarily expensive skill set, perhaps the Polish can

powodzenia!

@Rich

Since when is an income that’s less than the average industrial wage ‘extradinarily expensive’?

@ Disgruntled observer

Of course “pariah” is too strong a word. We’re not north korea or anything, my limited vocabulary failed me there. I was trying to convey my belief that Ireland is now a deeply unpopular country amongst those EU nations who are currently lending us the funds to keep our gold plated ship afloat. I believe that whilst they may see the Greeks as lazy, feckless and corrupt…they see the Irish as deluded, greedy and wasteful. Retiring civil servants queuing up to collect their lotto winnings can only add to that image.

Robert Browne repeatedly hits the nail on the head, i think the constant sound of him connecting just irritates some people.

@Robert Browne

You know damn well that someone on a 40 hour work week on the minimum wage is getting under €20K a year. And the next time I go to the ATM to withdraw money I will be too preoccupied by the fact that in about a year’s time I’m going to start missing my mortgage repayments to worry about the state’s deficit, a deficit largely caused by a collapse in tax revenues.

@Micheal Hennigan

What are you arguing for that Ireland should have more monopolies or near monopolies like the ESB and RTÉ where the public interest is invariably put first or a reversion to the Department of Posts and Telegraphs?

Or expect more of senior civil servants given their stellar record?

You have me bang to rights Michael, yes on both counts. I think Ireland is too small for useful competition in some areas (lets call them “utilities”) and that an efficiently run state enterprise where longer term national goals can be prioritized over shareholder value are a better answer. Adam Smith is not my guy.

Where we might agree is that I do not believe that civil service positions should can combine the current guarantee of job security without an understanding that retraining and mandatory reassignment has to be a significant part of civil service life and that discipline, specifically the removal of under performing staff, has to be improved. What it means to be an Irish civil servant will have to change.

Of course this will not be easy, we love our fiefdoms and pretending that Ireland needs all the apparatus and structures of a modern European country when we only have the population of a medium sized city.

@Gavin Kostick

Delighted to hear that I have finally made it to the stage (by proxy), I will have to see Last Year to check whether Shay is a middle aged Trot suffering from early dementia or merely a yappy dog that walked on a keyboard in the nurses office.

@Ernie Ball

The Irish Public Service / Apple Cupertino equivalence has got to be one of the most surreal comparisons ever on this blog, and that takes some doing. Or perhaps the Irish Public Service embodies the values of a leadership council on one of those peace-loving planets in Star Trek, with long white-haired kindly men speaking deep truths. Both concepts seem to have about the same relationship with reality as I see it.

Apple has about 45-50k employees, and about 30k are retail. That leaves about 15-20k in Cupertino to do 100% of the R&D for all products, and marketing, finance and other HQ functions. On an annualized basis, Q3 2011 results show that Apple has revenues of over €80bn. So no more than 20,000 employees design and build products that have revenues of 50% of Ireland’s GDP. Apple is still in startup mode after 30 years, and is an incredibly lean and intense company. jackh has it exactly right above. Irish public sector workers wouldn’t know what hit them if Steve Jobs rode into town.

Apple is an extreme command and control organization, with different groups only knowing what they need to know. Google is very different, and has a much more bottom-up approach outside core search with successful side projects growing and morphing into sometimes huge successes (e.g. Android OS). Google runs on intense peer-pressure, rather than top down command and control. Again Irish public sector workers wouldn’t know what hit them if they were dropped into Google’s Mountain View environment, with a tremendous need to produce successful code/projects to keep peer respect, and ultimately, your job. So there are two very difference company cultures, but both share an unrelenting and extreme focus on productivity – hardly the defining characteristic of the Irish Public Service.

Or maybe Family Guy Stewie’s multiverse remote control isn’t just a cartoon creation and there are parallel realities.

@ Bryan G,

Have Google or Apple employees ever had to walk into a burning building? Any of them ever been stabbed? Do you call them out to your house for an emergency?

Could you imagine a situation where a fireman called out to put out a fire in your neighbours home, so to protect yours, might be facing the loss of his own home. Bought during the bubble he had nothing to do with creating, saddled up with debts, told that on a risk/reward basis, his life is worth less than some Apple guys job so they cut his wages beyond his ability to service his debts. I suppose you could give him your iPhone. Hell, I was mightily impressed with the ESB guys who climbed the poles yesterday to fix the wires that allow iPhones to work. Some pressure in Hurricane Katya I can tell you. How many Apple guys have ever suffered a work related injury, other than RSI?

Ever lived in a country where the dogma espoused by many here is the dominant force. One without unions, without a sense of service, where the police have to moonlight as security guards for banks and jewellers, whilst wearing uniform, I might add, and at times engage in serious repression? There is no rule of law. Civil strife can become coups, and civil wars can develop. Everyone has bars on their windows. If the well off get into trouble, including kill someone, they can bribe their way out of it. This is where this all goes. This is where Greece is going. This is where we are going.

Now I’m not saying that Apple workers don’t work damn hard, and at least in a market sense create incredible value. But you know something, there’s something wrong with a system that values cheap flashy devices above utility and public service. I could live without Google, but you can bet your bottom dollar I want a fire service, and hospitals, and schools that can teach autistic kids, and that puts humans above toss away consumables.

But luckily there is a way to sort all that out. Do what they do in social democracies. Do what they did in the US for almost half a century. Tax wealth and high incomes properly. Flatten the income distribution. It’s not even revolutionary. It’s been done before. It does work.

Thought this pertinent, in the vein of disgruntled observer’s excellent post:

Click

@ disgruntled

‘But you know something, there’s something wrong with a system that values cheap flashy devices above utility and public service’

+ 1. That is one of Dork’s fundamental points. We have embarked on a self defeating process of consumption/capital extraction. I am always amazed by the contrast between the intelligence which goes into IT products and the juvenile inanity or sheer pointlessness of many applications. A bit like the military. No wonder many IT users (and soldiers) have a difficulty getting a grip on the world.

Of course there is also something wrong with a public sector where the badge of leadership is filling ones boots. Our cosy insider elite is, IMHO, the main obstacle to any sort of recovery.

I think you and Jarlath, Robert Browne, Grumpy and many others are saying the same thing, but with different emphases.Reminds me of the end of that old film Network, where everyone leans out the upstairs windows and shouts ‘ I am mad as hell’.

@Bryan G
They’re for managing to lose arguments gracefully. I don’t believe you need them…

Here we go again, the firefighters, every time someone mentions public sector reform, we get the firefighters, here are some facts:
The fire service is operated at local level by 37 fire authorities. There are 220 fire stations throughout the country with 3,330 serving fire service personnel, of whom 1,185 are full-time and 2,145 are retained part time(on a 24 hour basis). as you can see a very small percentage of the overall public service numbers
Greater London with a population 7.7 million people has one chief fire officer (CFO) and 6 senior staff.
For the 6 counties of Munster with a population 1.1 million there are 10 CFOs, 20 senior assistant CFOs, 40 assistant CFOs and up to 20 assistant fire officers.
In Ireland there are 272 senior fire officers which translates to one senior manager for every 9 fire-fighters and the recommended ratio is 1-in-20. a case of an awful lot of Chiefs for a small amount of Indians
Fire chiefs are paid between €78,000 – €95,000.
The only sensible thing we have done in relation to Fire service is the 3 Regional Fire Control Centre’s in Castlebar Dublin and Limerick, though why they need a 4 wheel drive is beyond me, other than to go to the shop for a pint of milk and a packet of figrolls

@jbkenn

You’re right. The public service isn’t firefighters. It’s not guards or teachers or nurses or lecturers or prison guards or any of the other examples people might bring up. No, no: everyone knows that the public service is nothing but a bunch of bureaucrats who do nothing but laze around all day counting their money on their 5-hour lunch breaks.

@Bryan G

OK, perhaps I chose my example poorly. Apple may not have the enlightened management structure I thought. It’s still a far cry from RyanAir. And my point remains: enlightened management in 2011 is not of the RyanAir type (or even the Apple type as this article (which was probably your source) makes plain. What’s exceptional management practice in the highest flying companies is precisely the sort of whipcracking management by control that many here advocate. Given the tasks that the public service is involved in (teaching and health care notably), such management by control (as opposed to management by the commitment of the workers themselves to the enterprise) would be entirely inappropriate.

@ Jarleth

“such management by control (as opposed to management by the commitment of the workers themselves to the enterprise)”

Why is that mind-boggling? Finnish education system – ranked by PISA best in world, or John Lewis say?

@ Paul Quigley et al.

Paul. In many respects, you’re absolutely right that I agree with a lot of what Bryan G, Grumpy, Jarlath, and many others are saying. However, I think the difference is more than just an emphasis.

We’ve had twenty years of tearing away at labour laws, loosening regulations, forcing an inevitable downward push in the private sector. Companies used to pay for health insurance and sick leave. Only the largest do now. Where in social democracies there is paid parental leave for both parents of newborns, here a mother’s not even entitled to her full pay. We have the least holidays in the EU, ie. the minimum we could get away with under EU law. Hell, we don’t even have the right to collective bargaining, in contravention of ILO treaties to which we are signitaries and over which the unions are now going to court. They say this is so we can be competitive and attract FDI, but most of the companies that come here via FDI actually are way better than that. This is all nothing but subsidising so called “entrepeneurs” in the indigenous private sector, which already have the lowest social insurance costs in the eurozone, and pay some of the lowest taxes. I would also add that wages in the private sector industries here are lower than the peers against which we are competing.

Now considering all these facts, and notwithstanding my abhorence at some of the salaries at the top of the public sector and my fatigue at hearing billionaires extolling the virtues of hair shirt austerity, I find it galling that the public service is incessantly singled out. Ernie Ball is correct. It is a race to the bottom that is being championed here. And just for the record, I don’t work for the public service.

We have had a collapse in revenues, part directly and partly indirectly for all the reasons listed above. And if the companies that operate in the private sector here can’t compete without all these state subsidies (and yes they’re subsidies), then the private sector managers here are equally grossly overpaid and incompetent as their supposed PS brethren.

There’s a very competent bunch of countries to the north-east of here, who understand the nature of a balanced system, a civil society, the requirement for investment in both real and human capital, but us in all our wisdom choose to ignore them. There’s a reflex here. It’s ideological, dogmatic, and virulent. I believe Krugman likened it to the Ebola virus. The Dork is correct. This merry go round is insane.

@ Gavin

“management by the commitment of the workers themselves to the enterprise”

Correct me if i’m wrong, but is he not saying they should be left alone to manage themselves based on their sheer love and commitment to their professions?

@Jarlath

No, what I’m saying is that when dealing with very highly-trained professionals (e.g., doctors, teachers, firefighters) who are committed to jobs that are multifaceted in the extreme, it is totally inappropriate to base management on the assumption that the work is like that in a cannery where nobody would do it at all if they weren’t a) paid; b) required to, and where “performance” (how many tins did you seal today?) is easily measured.

Take the introduction of “performance metrics” into such milieux. For these sorts of professionals, the introduction of such metrics does nothing to induce better performance of the job as a whole, but merely leads people to reapportion their time and attention, often in inappropriate ways. To take the example I know best: insisting that all lecturers produce “research” and measuring it, as they do, by counting (rather than, say, reading) publications results in the overproduction of such make-work to the detriment of teaching. It is to the detriment of research as well, for what is the incentive for anyone to take their time to think things through and produce something of quality when it counts for no more than the slapdash work of a colleague? If you respond that “doing quality work is its own reward and satisfying to the person doing it” then you will begin to understand why management by control is inimical to the fields (like education, like health care, like firefighting) where “doing quality work” is people’s real motivation.

That said, I am entirely in agreement (and as angry as anyone here) that the PS has been swamped by layer upon layer of unnecessary management, precisely with the aim of implementing the counterproductive management by control demanded by Jarlath and others. Not surprisingly, these are the people making the huge salaries and contributing virtually nothing of value: think of the management layers in education (particularly third level) and health, both of which have exploded in size and cost and whose main purpose is to implement “efficiencies” that their very existence make impossible. That the entire PS is now easily tarred with the sins of its managerial class is but the latest in a series of terrible injustices in these matters.

@The Alchemist,

I participated in the thread to which I think you refer:
http://www.irisheconomy.ie/index.php/2011/02/16/unintended-consequences-academic-edition/

It dealt with the Employment Control Framework (ECF) and the detrimental impact it would have on the allocation of academic resources under competitively secured research grants. It has since been revised:
http://www.irisheconomy.ie/index.php/2011/06/22/revised-employment-control-framework/

The point I was making on the thread – and which the academics commenting on the thread failed to grasp – was, yes, the ECF was likely to have the detrimental impacts about which they were so enraged, but that the correct course of action was to bring it forcefully to the attention of the relevant Oireachtas Ctte and to seek redress and amendment (since, after all, it was the Oireachtas which enacted the piece of legislation which authorised the issue of this ECF), rather than, like medieval peasants petitioning an absolute monarch, seeking to exert pressure on the relevant part of the government machine.

The fact that those with standing, influence and connections can secure modification of the implementation of public policy without going through the democratic process brings the entire system into disrepute – even when the modifications sought are perfectly sensible.

It gives carte blanche to others with similar standing, influence and connections to secure modifications of policy implementation that suits their own interests (which are unlikely to be in the public interest) directly from the government machine. (And this is separate from the ability of those with standing, influence and connections to affect policy formulation – and subsequent legislation – behind closed doors.)

And all this fuels the anger and hostility towards the public sector from those who lack the standing, influence and connections to protect and advance their interests.

The Oireachtas is the forum to debate and decide which interests should be advanced and how conflicts are resolved, but everyone who can seeks to bypass it. There a lot of people out there who are being disenfranchised and feeling powerless to defend their interests. And they are getting angry. And, as so often happens, their anger is being directed at the wrong targets.

@Shay,

Agree. Conflict in any society or economy is natural, healthy and constructive when there are clear, agreed and binding procedures to resolve these conflicts – with the courts being the final recourse. But, over the last 20 years, every effort has been made to suppress and smother the major conflicts that arise – the conflict between owners/managers and workers, the very necessary conflict there should be between Parliament and Government and the conflict between final consumers and businesses.

You quite rightly highlight the position of many private sector workers – no unions, poor pensions, poor job security, chronic status anxiety. The Oireachtas (similarly to many parliaments throughout the EU) is totally ineffective. And final consumers are disenfranchised, isolated, atomised in the face of large predatory businesses.

All workers require effective representation in their workplaces. Members of the Oireachtas need to wake up – or be kicked awake – to recognise that they, and they alone, exercise the absolute authority that the people have delegated to them – and that this does not mean electing a government and agreeing to everything it does for the next 4-5 years.
Consumers require effective representation of their collective interests before the competition authority and, where they are required, sector regulators operating in a quasi-judicial manner – and not captured, as they are at the moment, by the businesses they regulate.

But wht am I tiring my fingers? How many times does this need to be said? I think I’d better lie down for a while 🙂

@ Paul Hunt

By all means lie down. You deserve a rest. Well done mate.

I think you have got to a core problem in our democracy. Our greatest strength as a people is our ability to sort things out informally, face to face, ‘over a pint’ as they say on the northside.

It’s understandable. As Havel says of the Czechs, we are a plebeian nation. We should stop being ashamed of our history. Must stop.

That strength is also our Achilles Heel. Those habits of ‘sorting it out in advance’ are pervasive in all parts of the society. Even the Supreme Court has an eye to ‘what suits’. As you rightly say, we have got used to getting good outcomes by way of processes which would never stand the light of day.

That’s why our executive is so secretive. And its also why our professions are so hierarchical. Top brass are recruited in the main by co-option, and get a fat premium for respecting the law of omerta. Hang together or hang separately is the watchword.

Sunlight is the best disinfectant. Google that from 1914.

I strongly recommend Richard Posner’s writings, especially ‘How Judges Think’, for a flavour of what law is really all about’
Pierre Bourdieu’s ‘Language and Symbolic Power is also a cracker.

@Ernie
“No, what I’m saying is that when dealing with very highly-trained professionals (e.g., doctors, teachers, firefighters) who are committed to jobs that are multifaceted in the extreme, it is totally inappropriate to base management on the assumption that the work is like that in a cannery where nobody would do it at all if they weren’t a) paid; b) required to, and where “performance” (how many tins did you seal today?) is easily measured.”

Would have to disagree, many areas of the private sector have highly trained professions that aren’t anything like those working in canneries.

In many situations it isn’t possible to attribute ‘profit’ to individual performance but good management can organize, direct and assess the performance of individual members of staff.

The PS isn’t short of managerial staff it is short of effective management.

I would agree with you that the current management structure doesn’t work and top down targets are not the answer.

What is needed is managers who have real power to make decisions, i.e. manage. But with that will come real accountability, meaning if the decisions made are the wrong ones then managers should be removed.

@Dreaded_Estate

You write: “many areas of the private sector have highly trained professions that aren’t anything like those working in canneries.”

I never said that they were. But for those areas of the private sector, management by control is often equally inappropriate.

@Karl Whelan

Congratulations on attracting such a large amount of comments. Now if you will indulge me I would like to make a few observations .

Actually the Sindo also carried an editorial the previous week (September 4th) about Social welfare.

Public Pay and Pensions will have to contribute towards deficit reduction (probably by approximately 2.6Bn between now and 2015) as will other sectors but, IMHO ,getting worked up by an opinion piece by Eoghan Harris is a bit unnecessary.

The Sindo also has other writers with various opinions and , like it or not, reflects a lot of what general opinion is in Ireland.

Personally I believe eminent academics and public servants such as your good self would be maintaining the excellent level of service you usually provide (via this site and academic institutions) by publicly accepting that whatever “adjustments” imposed across the economy should be equitable and proportional to individual ability to survive “post adjustment”.

I am sure you will agree a 15% cut on your salary would be less devastating than a 10% cut on a low paid Public Servant or a 5% cut on someones job seeker allowance /disability benefit.

There is also a better chance that a much larger percentage of a social welfare recipient`s allowance or low paid public servant`s salary will be spent within the domestic economy.

Two public statements in recent years are,IMHO, worth recalling:

I believe one was by Leo Vardkar who defended higher Public Service salaries because most public servants were generally better educated.(Apologies to Minister Varadkar if I am reporting his statement incorrectly) The other was by your good self (on this very site if I remember correctly)referring to the fact that many public servants had purchased cars before the cuts which began in 2009 following the pay rise of late 2008.

First let us look at Doctor (he made it before he was a minister)Varadkarś statement : Surely highly educated public servants with a regular income are better equipped than a less educated person to reach for a calculator and adjust expenditure in response to income. After all business people (who may not always be as highly educated as your good self and many of your colleagues) have to do this everyday.

Second let us look at your statement (if I remember it correctly ) regarding purchase of cars by public servants: If cars were purchased by loans in early 2009 by public servants many loans would be reaching “amortisation” in 2012 and no later than 2014. Since 2009, as we all know, prices of discretionary consumer items have not sky rocketed within Ireland. We also know that any houses bought since 2008 are considerably cheaper than the four previous years

Ireland needs to “adjust” its budget deficit by around 10Bn and the Public Service can easily contribute 25% (2.6Bn)of this over the next two or three years without consigning anyone to penury or depriving the domestic economy of much needed VAT. After all a bottle of vino in Tuscany or a nice meal in Turkey does not contribute much towards Irish VAT. On the other hand a few pints “down the local” (with a copy of the Sindo:) or other Irish newspaper ) contributes quite significantly to Irish public finances.

Social welfare can probably deliver another 2.4BN but it is essential that a lot of this achieved by tackling fraud, improving efficiency and encouraging acceptance of jobs. After all practically all legitimate social welfare is spent domestically and contributes towards indirect taxation.

There are also further efficiencies in procurement, capital expenditure and removal of useless tax loopholes. None of these need necessarily consign anyone to penury or discourage enterprise/innovation.

Personally I feel our well educated public service could easily assist in contributing/ implementing all of the above without expending much needed energy on “having a go” at individuals who write opinion pieces in newspapers. The fact that the particualr individual is a pensioner (albeit one who may or may not enjoy controversy) is, for me, also a little disturbing.

I try to avoid “Public Service” bashing but am fully aware of the general perception (not all of it fair) that members of Public Sevice are over paid.

IMHO we should identify where the excesseve salaries in the public service are, tackle them, and immediately abandon arguments between sectoral ( I do not like the use of “vested”) interests within a nation which makes up a tiny fraction of the European population.

IMHO we should only have one “vested interest” : Ireland!

I look forward to reading many more of your postings in the future.

Best…..L

If Public Servants were “economic units” rather than people than a 2.6Bn pay and pension”adjustment” should be carried out overnight because we are in a crisis which is in danger of no longer being “short term”.

However (unless the euro implodes over the next few weeks) I believe such a cut in itself would also contribute towards a “short term crisis”. Personally I feel such an “adjustment” can easily(and should) be implemented over 2-3 years.

I do not feel public sector renumeration should be “greatly below market norms” but “market norms” have changed quite a bit over the last few years.

I also feel mobilty within the labour force and the fear of public servants “leaving” is not one we should be excessively worried about.Indeed some may even come back at a later stage bringing with them the benefit of private sector service. The Private Sector would also benefit, IMHO, if it included people with Public service experience.

Public Service should be a career choice during various stages of an individuals working life, not a “life style choice”.

There are thousands of public servants who are effectively in a “gilded cage” and would love to have mobility but simple pay comparisons “disincentivise” departure from the Public Service except (as with the Army, Gardai etc )via a golden parachute together with “pensions” paid out to be people who can reasonably expect to live for another 30-35 years.

On the reverse side there are plenty of people who could contribute very effectively for five to 10 years in Public Service but who are prohibited by the reality of a “closed shop”.Such people would not probably be overly worried about modest public sector pay levels because they would also be prepared to spend time working in private sector jobs which would attract high levels of pay.

Welfare most definitely should be based on need and (income/asset taxation) should be progressive but take into account that the wealthier someone is the more mobile they are.

The mega wealthy can “reside” any where they want but the next layer often have to balance quality of life with place of residence. After all there are plenty of countries which offer lower tax regimes than Ireland but the “gain” often comes with other “costs” which may not outweigh the gains.

@ Livonian

+1

I worked in the private sector for large US multinationals and for small, start-up Irish companies. The latter was the most interesting and enjoyable work I’ve ever done. Unfortunately I didn’t know from week to week if I was going to get paid. I now work in the PS but I fret constantly that the vastly superior terms and conditions may have made me ‘fat and lazy’ and it is very difficult to consider (even if the jobs market was not so dreadful) returning to the private sector where a vastly different mindset operates.

In response to another posting, I can say after over 10 years in the PS I have never met a public servant who joined/got a job out of the joy of serving the public. For many jobs – nurse, teacher, doctor – the only employer (realistically) in the country is the public sector so it is not a career decision to make. I feel that I owe my employer – whether public or private – the duty of doing the best job I can do, neither more nor less. I should not treat anyone differently because I am working for the public sector compared to how I would behave in the private sector. I have never in my public sector life met someone who claimed to have ‘joined’ (in 99.9% of cases they ‘got a job’) the public sector out of some public spiritedness (excuse the neologism). That is not to say that they don’t have the best motives. Most I have met joined at age 17 or 18 and in the 1960s/1970s it was either the ‘safe pensionable job’ or the emigrant boat. I have a theory that if a psychological/sociological study were done of public sector workers they would be found to be less entrepreneurial, more personally conservative in terms of unwillingness to take risks, etc. than the general population. Many good people do work in public sector but, in my experience, the system (as in all bureaucracies all over the world) gradually knocks the individuality and iconoclasm out of them.

I was waiting to see if you’d get any takers. Being at the end of a long thread probably doesn’t help and everybody is very busy in any event.

This is something I’ve being banging on about for some time. The latest EU stats on the price level of private household consumption:
http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tsier010
shows that the cost of living in Ireland has come in from being 25% above the EZ average to less than 14%. (This is also presented in the CSO’s
http://www.cso.ie/releasespublications/documents/other_releases/2010/progress2010/measuringirelandprogress2010.pdf
on p29 which compares price levels to the EU (and not the EZ) average.)

This suggests that the tradable sectors and those exposed to some competitive pressures adjusted their prices downwards, but that the public, semi-state and private sheltered sectors didn’t. This is also borne out by CSO detailed price index data.

Given the role of the state in all these sectors there is no reason why significiant reductions in various fees, charges, tariffs and prices couldn’t be enforced to close the gap with our EZ partners.

A 15% increase in real disposable incomes would result (with a higher increase for those on lower incomes). The only ingredient missing is the political will. The government is either in hock or in thrall to the deeply embedded vested interests that would lose out. It’s far easier to knife into welfare transfers and public expenditure than to upset these powerful forces.

So I doubt you’ll get any takers.

With all due respect, that excuse for not dropping charges doesn’t wash.

Why hasn’t the TV/dog/driving/etc licences decreased?
Why haven’t regulator charges/mandatory fees been decreased?
I could go on and on.

Because those setting the charges have the power of law to enforce collection and don’t have to change.

The internal devaluation was supposed to happen. Whatever happened to that? All thats happened is the protected sector has gotten more protected relative to the rest of the population.

the public sector rarely charges a price for things, it charges a charge which reflects a subsidy from general taxation. In the present environment the subsidy is reduced and the charge goes up. It does not make sense for a government with a large deficit to sustain or increase subsidies.

It does not make sense for an individual or company to charge less when selling/earning less either… But when survival is at stake, that is what has to happen. the above argument is used to conceal inefficiencies and overcharging by protected organizations.

I would prefer to have higher tax rates to pay for government; that yet more fraudulent accounting and stealth theft by protected agencies.

Margins and profits where the consumer has a choice have shrunk. Thats fair enough, thats life…..
And its not just state agencies that have kept or even raised prices. Again, thats life, some have valid reasons, others … its because they can.

But for the state to drone on about internal devaluation and then do precisely zero on their mandatory charges is obscene.

We even see it with new charges such as septic tank inspections which are not at all competitive with our nearest neighbour…

Again, now it is proposed 5% of an insurance bill goes to the state. (I understand Quinn was a private company, but the 2% charge is mandatory and being introduced by a state agency, on top of the 3% tax) Because of the pensioners lobby and some vauge well meaning BS, this charge will be on everything but health/life assurance. Last time I checked Quinn were in that game also…. But someone has decided that a general charge on insurance is the right thing to do but not on a pet sector.

Net effect, more cost, more hidden subsidies for government and from government to protected sectors…. which allows the liars in government claim tax rates are below the EU average….. And publish misleading data.

If the political will was there an internal devaluation could happen. But its much easier to continue the hidden subsidies to connected insiders (whether employees, sectors or industries)…