Category: Fiscal Policy

Civil Service Pay Cuts Not the Answer

Dave Thomas (general secretary of the Association of Higher Civil and Public Servants) argues that pay cuts for civil servants are ‘not the answer’ :  the article is here.

Without having the time today to fully discuss this contribution, I will note the following sentence:

“First and foremost, public servants did not cause the economic crisis.”

This type of argument has been used by many interest groups to argue against expenditure cuts of various forms. However, it is also the case that ‘group X did not inflate the property bubble’ and the problem is that the windfall tax revenues during the bubble period allowed a rapid increase in public sector pay and many expenditure lines.  The goal now is to restructure the economy and the public finances in order to undo the the adverse impact of the whole bubble-crisis episode and the relevant benchmark is not the level of earnings or public expenditure at the peak of the bubble but the appropriate levels of earnings and spending in order to ensure that Ireland can grow along a sustainable, non-bubble path.

McCarthy on the Green New Deal, Tol on the carbon tax

Colm is not impressed in today’s Irish Times

This continues the earlier discussion in this house

He also comes out in favour of a carbon tax, which I discuss at another page of the same newspaper

The Public-Private Sector Pay Gap in Ireland: What Lies Beneath?

This new paper responds to the recent CSO study and also tackles several new dimensions of this question.

Paper here.

Abstract:

This paper provides a sub-sectoral analysis of changes in the public-private sector pay gap in Ireland between 2003 and 2006. We find that between March 2003 and October 2006 the public sector pay premium increased from 14 to 26 per cent and that there was substantial variation between subsectors of the public service. Within the public service the premium in 2006 was highest in Education and Security Services and lowest in the Civil Service and Local Authorities. In the private sector the pay penalty in 2006, relative to the public sector, was most severe in Hotels & Restaurants and in Wholesale & Retail and least severe in Financial Intermediation and Construction. The paper tests for the sensitivity of the pay gap estimates using a matching framework, which provides a stronger emphasis on job content, and finds the results to be broadly comparable to OLS. Finally, the study highlights the problems associated with controlling for organisational size in any study of the public-private pay gap in Ireland.

September Exchequer Returns

These are now out.  The general government balance for 2009 is now projected at minus 12 percent of GDP.

More on the Public/Private Wage Gap

The CSO has released a multivariate analysis of the 2007 National Employment Survey which shows broadly similar results to the recent ESRI study (which used data from the 2003 and 2006 surveys). I imagine that next week’s ESRI seminar should stimulate some interesting debate on this important topic.