CSO: National Employment Survey 2009 and 2010 Supplementary Analysis Post author By Philip Lane Post date October 12, 2012 This includes new analysis of public-private pay differentials. Categories In Uncategorized 19 Comments on CSO: National Employment Survey 2009 and 2010 Supplementary Analysis ← “Overall, I don’t think that I owe the Irish taxpayer any apology.” → Blanchflower on academic economics during the crisis 19 replies on “CSO: National Employment Survey 2009 and 2010 Supplementary Analysis” I think in that it would be complete madness for the Troika to continue to support the current administration unless they are prepared to grasp the nettle which is Croke Park. The German tax payer is being asked to subside the wages of the public sector in Ireland who are and continue to be paid much more than there own public sector forcing Ireland to have the highest deficit in EU (and barring war-time in history). The croke park agreement means these people expect to be paid way of the odds as the country sails straight into bankruptcy Agentinan style. The government has been steadily reducing the numbers in the public sector forcing these people on the dole and balloning the social welfare payments. We are told repeatably that the solution in the health service is to cut consultants pay, payment for drugs and collect more from the insurance companies. We now find out that we not collecting off the insurance companies because the consultants can’t be bothered to fill out the forms. Solution scrap Croke park, reduce consultants pay by 30% and give them a 10% clawback if they “fill in the forms”. Get the NHS in north to buy our drugs for us, they seem to be able to get them for 40% less so give them a 5% bonus and we save 35%. Sack the HSE purchasing managers as they cant seem to do their job. Simple but as Vicent Browne said will it be done – NO! 87,000 people left the country last year alone. Some people in trade unions welcome this response to the economic apartheid but very soon they will realise that a tipping point is coming. Also, they have brought the unfunded pensions deficit into sharp focus. As for unemployment rates, there are those that are barely holding on to their jobs by the skin of consumer sentiment. If there is any further fall off in aggregate demand you will see the tipping point and people on the streets. Maybe I am being too optimistic about the Irish sheepeople. Some people in trade unions welcome this response to the economic apartheid I don’t think the voices in your head legitimately count as “some people in trade unions”, unfortunately. The German tax payer is being asked to subside the wages of the public sector in Ireland Lemme fix a few typos for you: The Irish tax payer has been asked to subsidise the profits of the banking sector in Germany. Jules. How much would your plan save? Ernie, Both paras are essentially true. @ All The issues in the quotations, it seems to me, should not be confused. Up to this point, the crisis in the euro has cost the German taxpayer not one red cent. What the German government has accepted is an enormous contingent liability by back-stopping the fund-raising arrangements in the markets – first through the EFSF and now the ESM – to (i) pay back monies owed by governments (ii) allow those excluded from the markets to continue to function until they can get their houses in order. Cf this link for the difficulties with this approach. http://www.ifre.com/esm-lacks-cash-for-spanish-bailout/21046572.article The real distinction is between actions that countries can take themselves and those for which they are dependent on others, the levels of pay being an example of the first and demands for an easing of bailout terms being an example of the second. The continuing euro crisis is due to the failure to end the tug-of-war between the two. Or, in other words, to find a satisfactory balance with regard to the issue of “conditionality”. Indeed, it could be argued that the German taxpayer is being paid for this support as the cost of German government borrowing has gone through the floor as a result of the crisis. But this benefit will be short-lived if the entire edifice comes crashing down. The debate about the pay differences in the public and private sectors is a question of equity to be decided nationally. But it is also an obvious element with regard to where the balance is to be struck with regard to conditionality. This is where the German taxpayer comes in.They cannot but look with a jaundiced eye at the failure of governments to resolve issues of equity in their own backyards while seeking an easing of the conditionality arrangements. @ All Stephen Collins spells it out! http://www.irishtimes.com/newspaper/opinion/2012/1013/1224325222911.html To use the phrase evidently dear to the heart of one minister, it is time for all to embrace the change agenda. Meanwhile, on the other front! http://www.irishtimes.com/newspaper/ireland/2012/1013/1224325225849.html @CSO Lovely piece of work. @all Fig 1.16 p.20 most imformative. Tells the story. A few observations. 31% of employees in private sector earned less than €400 in 2009. [worth noting that in 2012 70% on social welfare earn minimum of ~€190] [do the sums for those on the breadline] 70% unionised in public sector and 20% in private sector. It would appear that the segments most in need of some union support are in the low paid private sector – yet CPA ignored the private sector and and unions went along. Labour party joined with centre right Fine Gael – leading to split in Irish labour movement and further delaying any moves to social democracy in political system – Minister Bruton downgrades many appreticeship grades to a buck above minimum wage – will lead to deskilling as why bother with the apprenticeship in future. New entrants on lower scale while those in possession [union members] make not a murmur – intergenerational solidarity how are ya? Back to Figure 1.19 – skewed and screwed? Who is really being skewed and screwed? Looking forward to more up to date data and similar substantive treatment. @Jules Germans have not lost one pfinning (of any colour) on Irish loans to pay off odious financial system debt; German admin has gained billions due to capital flows and artificial bond rates. Angela can now easly afford to cut some slack for all the mac_jobs in germany as a spur to her re-election hopes in 2013 …. @ All Somewhat off-topic but related, the views of Schaeuble post the IMF meeting (seemingly covered in detail only by German press) as covered by Reuters Deutschland. http://de.reuters.com/article/domesticNews/idDEBEE89C00320121013 Weidmann pulled out of the normal joint press conference pleading some family excuse. http://www.reuters.com/article/2012/10/12/us-germany-schaeuble-weidmann-idUSBRE89B0KU20121012 What the report does not mention is that Weidmann is, in fact, Germany’s governor on the board of the IMF, Schaeuble being his alternate! Where this internal German division is going, nobody knows. The message from where it really matters, however, as relayed by Schaeuble, is that Germany is neither the naysayer nor as isolated as press comment might suggest and is not for turning. The European Council next week seems set to disappoint. What these development suggest, however, is that the intra Euro Area tussle cannot be divorced from the wider international one. The real deadline is the US Pesidential election and the economic policy that will be followed by the US in the light of the outcome. @All RE – German taxpayer – When the FF adminstration unconditionally guarnteed the banks they basically said that all the German bank losses in Ireland are going to be guannteed by the Irish tax payer. They then followed this up by paying out all unsecured bond holders by raiding the national pension pot and taking the ESRF cash they got from the German tax payer. When the administartion, which is now backed up by FG say they will meet all bank debts that is what they mean – The entire income tax take in the country is going to be siphoned up to pay the German banks untill the year dot. Now in the short term it difficult to shut down all public services overnight as some overpaid public sector workers need to paid and somebody might complain. This is where the german taxpayer is coming in – Who is financing our deficit – Is it being printed, No – It is coming in a large part from the German taxpayer. This is obviously to their benefit, it is financiang their banks who would be bankrupt without this largess on behalf of the irish taxpayers, ECB etc. but they at the moment at least have the power to tell our government to stop waisting their funds overpaying consultants and the legal profession etc. They wont listen to anyone else, definitely not the electorate. @gtfaway My plan for the health service will get £100 million from the consultants as a 20-30% reduction in pay £70-£100m extra from the insurance companies by getting the consultants to fill out forms and charging them corrrectly £150m off the 1.5 bn drugs bill by getting the NHS to buy them for us Basically the current deficit in the healthservice. This can be done without touching nurses pay I wish people would read (even is a cursory fashion) the CSO analysis before sounding off. Could I draw attention to the following facts: 1. The public sector pay premium has fallen during the period 2007-2010. 2. The premium is higher for females than for males, even though females earn less than males in the public sector. 3. The quantile regressions (which confirm work done some years ago by Anthony Murphy and others) show that the premium is greatest for lower-paid/less-skilled workers, and that for the top 20% or so there is a public sector discount. There are some interesting consequences from these observations: 1. The reduction in the premium since 2007 just might mean that Croke Park is not after all a creature of the devil. 2. Reducing the premium may bear heavily on women, especially lower-paid women: this will have interesting political consequences. 3. Much of the media rant about “fat cats” in the higher echelons of the public service is just that – a rant. Don’t get me wrong: there is a lot that needs fixing with public sector employment arrangements, but this may have more to do with flexibility and other things apart from pay levels. On pay at the top levels, the real problem may not be that pay is too high, rather that the pay goes to people who are not of the appropriate calibre, or who are not sufficiently accountable for what they are supposed to do. FG TDs rebel on Croke Park pay deal By Paul O’Brien, Political Editor Monday, October 15, 2012 Eight Fine Gael TDs have challenged the Government’s stance on Croke Park, saying the system of pay rises and allowances for high-earning public servants must be re-examined. In an unprecedented move, the eight have co-authored an article in today’s Irish Examiner raising a number of key questions about the agreement. The development starkly illustrates the growing doubts among Fine Gael backbenchers as to whether the agreement is delivering, and seems certain to spark further tensions with coalition partners Labour. The eight TDs are Sean Conlan, Paul Connaughton, Pat Deering, Brendan Griffin, Noel Harrington, Sean Kyne, Anthony Lawlor, and Eoghan Murphy. http://www.irishexaminer.com/ireland/fg-tds-rebel-on-croke-park-pay-deal-210862.html Method of calculating Croke Park savings may be flawed Monday, October 15, 2012 ROUGHLY 17% of the working population are employed by the State. The work they do is essential; and many do it on small salaries. They are not responsible for the country’s financial woes. There is a strong argument that lower salaries be protected. The money we spend on public sector pay each year is roughly equivalent to the amount we currently borrow to bridge the deficit, just over €15bn. We are in the process of reducing the deficit, but the Croke Park Agreement means that we cannot touch core pay in the public sector to do this. Croke Park is at the centre of government policy. Core pay will not be reduced so long as other savings are made in the public sector, and long overdue reforms are delivered. Such a constraint on economic policy naturally makes the task of correcting the deficit more difficult. So we must do two things: use those tools outside of Croke Park that are available to us; but also, robustly challenge the savings that are being reported under Croke Park to satisfy ourselves that the agreement is delivering on that front. Last week, the implementation body for the agreement came before the Public Accounts Committee and both those assumptions were tested. Allowances in the public sector are worth €1.5bn. When the Government recently tried to identify savings of only 5% of that figure, it encountered resistance. The reason given was Croke Park. Earlier in the year, a Government discussion over the possibility of freezing increments in the public sector was shut down. The reason? Croke Park. Next year we will increase public sector pay by at least €170m through increments. That figure does not include pay rises being awarded in local authorities. The figure then should be assumed to be much higher than €170m. How much higher we don’t know, because the details have not been given to the Dáil. And yet, neither pay increases (increments), nor allowances, are a part of the Croke Park Agreement in the first place. They are not mentioned in the document. And the agreement’s implementation body admitted as much. So why have increments been taken off the table altogether, and why the hesitation with properly tackling allowances? Pay increases in the public sector, for those on higher wages, must be put back on the table if we are serious about correcting the budget deficit, and if we are serious about doing so in a fair way in these difficult times. It should also be the policy of those who seek to retain the Croke Park Agreement as core government policy, as not doing so only undermines the agreement itself. Separate to that point, there is a question mark now over how savings are calculated under Croke Park. Last week in the Public Accounts Committee, we heard that the method for calculating savings under the agreement includes a 25% increase when calculating the salary savings from a retiring public servant; and, an additional 40% when calculating non-pay savings from a retiring worker. There is a rationale behind why these calculations are made in both instances. The first is related to anticipated pension-related savings (though there is an argument as to when these will actually accrue as savings). The second concerns overheads that are no longer incurred for the retiring member of staff. An independent review by Grant Thornton of one particular project under Croke Park — the re-organisation of local offices in the Department of Agriculture — found that the Department of Agriculture believed “the 40% allocation for non-pay costs, while in line with Department of Finance guidelines was considered excessive, relative to actual costs incurred”. This was the Department of Agriculture’s view of the methodology for calculating the savings — excessive, relative of actual costs incurred. What is the rationale behind the Department of Finance’s methodology? Is it robust, or are the percentages being used excessive? What then are the actual savings being achieved under the agreement? This one instance with Agriculture is relatively small in financial terms. But if the methodology is not the best one, should we continue to use it? These questions are important. If we cannot rely on the numbers that are coming back to us from the public sector, how can we have confidence in the agreement and what it says it is delivering? How can we then defend the agreement rigorously? It is now time to bring people from outside the public sector on to the implementation body for Croke Park so that we can have a more independent view of what is happening. Aside from the independent chairman, all other members of the overseeing body will be directly affected by its outcomes. It is only fair to ask: In whose interests are they working? An agreement was made to protect public sector core pay through these difficult times while other reforms and savings were achieved. The actual extent of these savings is now, at the very least, in question. The independence of the implementation body needs to be strengthened. And protecting core pay does not mean protecting pay increases and unnecessary allowances for those on higher salaries. Every euro saved is a euro better spent on vital frontline public services that benefit us all. * Sean Conlan TD, Paul Connaughton TD, Pat Deering TD, Brendan Griffin TD, Noel Harrington TD, Sean Kyne TD, Anthony Lawlor TD, Eoghan Murphy TD http://www.irishexaminer.com/ireland/method-of-calculating-croke-park-savings-may-be-flawed-210907.html David : bad form to paste the whole of an article Also note that the Magnificent 8 took 37k in expenses while the Dail was in recess in August alone. Just saying ….. Also, as TD salaries are linked to PO and they are on an automatic increment im correct in presuming that they would be happy to see their own salaries stopped as is? @John Sheehan. Interesting points indeed and most of them valid no doubt but the ‘elephant in the room ‘ is that we ,as a country, are broke/bust/down the financial tubes/at best in ‘receivership etc etc and we have a public sector structure,right through from the Oireachtas,Central Govt,Semi-States,Local Government etc which is no longer affordable,if indeed it ever really was,and we must take radical action to bring the cost into line with a total tax take which gives some glimmer of hope to a domestic economy which is on its knees. Proposal -in total 50% cuts across the board with immediate effect at Oireachtas,Central Govt,Semi-State,Local Govt with the emphasis on back-office management and bureaucracy – say 80% for these non value adding/service provision roles. The proposal of the current administration to ‘lose’ just 8 TD’s is a sick,very sick joke! @BL Plenty ammo for your next Examiner piece – must keep up the ol demand! How about the ‘vested interests and the professions’ …. ? BREADLINE: MOne in 10 too poor for proper diet One in 10 people in Ireland are too poor to afford a properly balanced diet, a study has shown. The unemployed, low-paid workers, people who are ill, disabled or poorly educated, families with more than three children and lone parents are most at risk. Safefood, the agency which published the research, said the numbers in danger of food poverty rose by 3 per cent between 2009 and 2010. Researchers identified three new costs to determine food poverty – not being able to afford a meat or vegetarian equivalent meal every other day; being unable to afford a weekly roast dinner or vegetarian equivalent; or missing a meal in the last fortnight due to lack of money. Safefood said the unemployed were most at risk, followed by lone parents, the ill or disabled, large families and low-income families. Jerry Buttimer, chairman of the Oireachtas Committee on Health and Children, said the report was valuable advice. “Whether in rural towns or urban cities, the experience of food poverty is very real and damaging to the health of children and adults, and also impacts on their future prospects,” he said. “By identifying those most at-risk, we can begin to work towards helping those most at need in what is a key health issue.” Safefood is the all-island body for raising awareness of healthy eating habits. The research was published in the report, Measuring Food Poverty In Ireland – The Indicators and Implications, covering the Republic only. It took in data from the Central Statistics Office survey on income and living conditions. http://www.irishtimes.com/newspaper/breaking/2012/1016/breaking8.html @ EWI Yes, I guess I was not being quite accurate. “Some people in trade unions welcome this response to the economic apartheid” It is not that the welcomed it, rather it was that they are the architects, plotters and planners of it. “Unfortunately’! I am not the only one that referrs to the Croke Park agreement as “economic apartheid” Cormac Lucey has stated the blindingly obvious also along with severa others. Comments are closed.