2007-public-private pay gap was 48%!

97i9y3941 · 12-07-2009 1:20pm

all to do with contracts,now the gov cant afford to pay the public wages,the family man that depends on welfare will have his welfare cut to make up for the wages,taken from the sunday independent today

€30m a day loans for public wage bill

Public sector now earning 50 per cent more than private workers

By Daniel McConnell
Sunday July 12 2009

THE Government is borrowing €30.5m a day to pay the unsustainable wages of public sector workers who are earning up to 50 per cent more per hour than those in the private sector.

New figures obtained by the Sunday Independent reveal that inflated wages and inflexible work practices in the public sector are punishing the Irish economy and causing Ireland's debt levels to spiral out of control.

As the Dail rose on Friday for a 10-week summer break, the economy continues to flounder, with the Government now borrowing €1bn a month to bridge the gap between tax returns and the cost of running the bloated public sector.

Early indications show that June was a "wicked month" for the retail sector, and last night it was being speculated that the July jobless numbers would show an acceleration in those out of work.

"Anecdotal evidence is that the consumer economy bombed in June as the new taxes and levies took their toll, with small businesses dependent on retail demand closing on a weekly basis. They are below the radar and don't make the news, but they are dropping like flies," a leading retail expert said.

A senior political source said that the economic numbers coming down the tracks would "leave no hiding place" for the Government and force it, however reluctantly, into genuinely tackling the cost of the public sector by the autumn.

For the first time, both main opposition parties have said that serious cuts in public sector pay and allowances now have to be implemented, with Fine Gael and Labour giving Mr Cowen the necessary political cover if he wants to tackle the public sector unions.

On Wednesday, Taoiseach Brian Cowen and his Cabinet are likely to discuss whether or not to release the report by economist Colm McCarthy, which recommends slashing up to €7bn of the Government's running costs.

Despite the latest CSO figures, which revealed the wage gap between public and private sectors stood at around 50 per cent, the new president of the Irish Congress of Trade Unions, Mr Jack O'Connor, warned that his members would engage in a sustained campaign of strikes and industrial unrest unless their pay demands were met.

In an incendiary statement, Mr O'Connor said: "I am not going to threaten the finance minister with the riots in the street that seem to pre-occupy his imagination.

"However, I believe we can offer instead the prospect of a sustained and relentless industrial campaign conducted workplace by workplace."

However, the figures severely challenge the case routinely put forward by public sector unions that the vast majority of those in that sector are on low incomes.

Labour's finance spokeswoman Joan Burton said yesterday it was time for those at the top of government and the civil service to "cop on". She said top-level wages, expenses and allowances should be capped at €200,000.

Ms Burton also criticised the comments by Mr O'Connor, saying it was in no one's interests that strikes take place. "Most union members are simply happy to have a job, and don't want to be striking. They are reasonable people and realise the state the country is in," she said.

Her Fine Gael counterpart, Richard Bruton, said the CSO figures were indisputable evidence of the major pay premium within the public sector at the expense of private enterprise and that there should be a downward benchmarking of wages to all upper grades for state employees. He said that given the CSO report was conducted in 2007, it must now be a fact that the gap is over 50 per cent.

At present, the government deficit stands at €11.1bn and is now expected to breach €24bn by December's budget. There are 303,000 people on the public sector payroll costing a massive €20bn a year in pay and pensions.

With 415,000 people now unemployed, the social welfare budget is set to reach more than €21bn this year and it is expected that the job seekers' benefit and child benefits could be cut in the coming months.

- Daniel McConnell

leeroybrown · 12-07-2009 3:21pm

Fred83 wrote: »

all to do with contracts,now the gov cant afford to pay the public wages,the family man that depends on welfare will have his welfare cut to make up for the wages,taken from the sunday independent today

I definitely agree that the public sector wage bill needs to come down quickly. Throughout the good times, years of cosy agreement between FF and the main trade unions has left us with the a more expensive public sector with very few reforms.

That said, it still doesn't make the sensationalist '48%' figure that this thread is about in any way meaningful or correct.

97i9y3941 · 12-07-2009 3:23pm

is the gov been afraid been sued or losing support that they cant cut wages?

leeroybrown · 12-07-2009 3:48pm

Fred83 wrote: »

Is the gov been afraid been sued or losing support that they cant cut wages?

They've already cut wages indirectly using the public sector pension levy. In the event that they attempted a negative benchmarking exercise they'd find that they'd have a few hundred thousand employees, all of whom have signed written evidence of their pay rate, looking to engage in industrial action or litigate. As it is they've already re-structured the pension levy slightly to prevent an impending CPSU strike that would have taken out a large proportion of the 'lower-paid' clerical workers that keep most important government functions running on a day-to-day basis.

At the moment early retirement along with attrition among those at the upper end of the salary scales appears to be the method they've chosen in order to get the costs down. Those who represent the least value in a valid cross-sector comparison will probably be the most awkward to do anything about.

The government are probably quite happy to see the '48%' figure out there though as entrenching the two sectors against each other gives them some breathing room.

NewDubliner · 12-07-2009 4:57pm

Fred83 wrote: »

all to do with contracts,now the gov cant afford to pay the public wages,the family man that depends on welfare will have his welfare cut to make up for the wages,taken from the sunday independent today

So now it's 50% and not 48%?

Quoting the Indo as a source is ridiculous (Lawlor and the 'under-age-Russian hooker in car-crash'....what a scoop (not.)). The paper represents big business, not Joe the unemployed plumber.

ChowChow · 12-07-2009 5:16pm

johnnyskeleton wrote: »

Factor it in then. Although, paying a contribution to pension has been part of private sector employment for a long time, so this "'exclusive' tax" is not really exclusive to the public sector.

Post '95 public servants have always paid a contribution towards their pension, along with the new pension levy which is exclusive to the public service. The last benchmarking report marked p.s. salaries down by 12% to take account of differences between public and private sector pension schemes.

johnnyskeleton wrote: »

They are, but my point is that if averages are misleading, then why not do a like for like comparison?
As close a comparison as you can get between certain public and private jobs. In any event, you've taken a very minimalist view of the security industry - why not compare a private sector anti-fraud officer for a large corporation in comparison to a D/gda from Harcourt Terrace? Or a private head of security for the garda commissioner?

If you can provide a full analysis of the posts and responsibilities of the roles you have mentioned, please do so. I don't have such information, so in that context any detailed comparisons would be completely meaningless.

johnnyskeleton wrote: »

Why is it that public sector employees always compare themselves with high end developers, CEOs, tribunal barristers, top end accountants and high profile figures but never compare themselves with people on the minimum wage or people working similar jobs in the private sector?

The point I was trying to make was in relation to the general lack of transparency when it comes to private sector pay and conditions of service.
I used the now retired chair of IBEC to illustrate, the same guy who spoke about the 'gilt edge rolls royce' public sector pensions. I'll bet he is scrimping and scraping to survive on his pension as I write this :rolleyes:

johnnyskeleton wrote: »

Yes, let's add them all in, but you'll find that for the most part, the perks of the private sector pale in comparison to the public sector. It's just that in the public sector they call "corporate days out" junkets or training days and relocation allowances are decentralistion grants.

Training days? Relocation allowances? There must be some mysterious parallel public sector that I know nothing about.

johnnyskeleton wrote: »

While there is slacking off in both the public and private sectors, it is tolerated far less in the public sector in two ways - firstly, in the private sector lazy unproductive workers are often fired and secondly in the private sector promotions are based more on merit than seniority of service.

You will find that lazy unproductive people are quite adept at covering up their tracks. For example, a team leader/manager who gets their subordinates to do their work and then claims the credit (yes I have loads of anecdotal evidence of this)
With regard to promotions, I'm not aware of any part of the public service that promotes based on seniority. Sadly, shameless self-promotion and nepotism was the successful means that some used to move up the ladder.
There is now a recruitment freeze in place which will put an end to all that.

ChowChow · 12-07-2009 5:21pm

leeroybrown wrote: »

The government are probably quite happy to see the '48%' figure out there though as entrenching the two sectors against each other gives them some breathing room.

Absolutely, I'm pretty sure FF are delighted to see all this public/private sector bickering as a great smokescreen to a more critical issue facing the country. Interesting article on Nama here

RedNiamhy · 12-07-2009 5:55pm

cyclopath2001 wrote: »

A relation of mine works in Revenue IT, they have Accenture on site. The company supplies their staff with baskets of fruit, snacks etc (via Tesco). Then there's the golf-outings & social 'team building exercises'....all of which probably gets charged back to the taxpayer in their services invoice.

I work for a section of the Departartment of Justice and receive no perks such as baskets of fruit/golf outings etc.

We get no bonuses that are commonplace in most private sector workplaces. Our "bonus" last Christmas was a few boxes of mince pies in the canteen on our break.

Any social events are organised and funded by our social club which is solely funded by members by way of a salary deduction.

I have always paid a pension contribution - since day 1. I had no choice over paying into a pension and now have to pay double my pension contribution! I would much prefer not to have to pay anything towards this statutory pension and have my own private pension fund but this is not an option!!!

I have had a 10% drop in net income since last December and have no overtime this year which I relied on and made up to 20% of my take home pay - so now i am taking home a total of 30% less than 7 months ago!

Yes, I do have the benefit of having a pretty secure job and entered the civil service in the height of the boom and foregave much higher salaries for this.

I would love to conform to the stereotype of civil servants - sitting back with their feet up all day but I have targets to hit and outputs to achieve as well as putting up with abuse from private sector workers and abuse from customers on the telephone.

And I am constantly reminded that I am "lucky to have a job".

oncevotedff · 12-07-2009 6:42pm

irish_bob wrote: »

....wages will be cut and numbers reduced beit by the irish goverment or outside forces....

Yes they will. The propaganda about how much higher public sector wages are versus private sector is part of the reduction process. Instead of farting about leaking dodgy statistics to the media why doesn't the government just get on with it.

I'm sure public sector workers must be amazed to read this kind of pap in the same pages that report electricians getting pay rises in the middle of a recession. Presumably we'll shortly see the rest of the trades demanding the same.

Kimbot · 12-07-2009 6:55pm

cyclopath2001 wrote: »

A relation of mine works in Revenue IT, they have Accenture on site. The company supplies their staff with baskets of fruit, snacks etc (via Tesco). Then there's the golf-outings & social 'team building exercises'....all of which probably gets charged back to the taxpayer in their services invoice.

Ah good ould Accenture. I believe they are now gone from Revenue and Fujitsu-Siemens are now there in their place.
I remember seeing all the baskets of stuff they get in, bonuses, paid nights out once a week. All staff paid really well, I remember a few of them jetting all over the world on holidays a few times a year. All while I was sitting there doing the same job for 24,000 a year!!

leeroybrown · 12-07-2009 6:56pm

oncevotedff wrote: »

I'm sure public sector workers must be amazed to read this kind of pap in the same pages that report electricians getting pay rises in the middle of a recession. Presumably we'll shortly see the rest of the trades demanding the same.

Slightly OT but, that's somewhat misleading on both fronts. Most public sector employees who are not at the top of the salary scale for their position will get an automatic increment during 2009. While no one will emerge from the electricians strike with much credit, the ultimate outcome appears to be that they should receive the 2007 pay-rates that have never been paid by most employers despite an REA and a successful legal action.

Sleepy · 12-07-2009 9:05pm

jonny24ie wrote: »

Ah good ould Accenture. I believe they are now gone from Revenue and Fujitsu-Siemens are now there in their place.
I remember seeing all the baskets of stuff they get in, bonuses, paid nights out once a week. All staff paid really well, I remember a few of them jetting all over the world on holidays a few times a year. All while I was sitting there doing the same job for 24,000 a year!!

Have you ever seen the burn-out rate of Accenture employees? Their entire career path is based on the fact that most of the new starts won't last 3 years. Their staff work ridiculous hours and are remunerated accordingly.

Note: I've never worked for them. Did the interviews when I was leaving college but wasn't offered a position after the final round where 30 out of 100 of the interview panel were hired (after 3 previous interviews). Was gutted initially but after encountering some of their staff socially am very, very glad I wasn't offered the job.

oncevotedff · 12-07-2009 9:34pm

leeroybrown wrote: »

...Most public sector employees who are not at the top of the salary scale for their position will get an automatic increment during 2009. .

And those that are at the top of the salary scale for their position won't. The pension levy will in fact negate any incremental increase and in real terms has reduced public sector pay for everyone but the judges.

leeroybrown · 12-07-2009 10:18pm

oncevotedff wrote: »

And those that are at the top of the salary scale for their position won't. The pension levy will in fact negate any incremental increase and in real terms has reduced public sector pay for everyone but the judges.

It depends on how you look at it. If you're a public sector employee who's been paying the pension levy since it came in and gets an annual increment in August then you're getting a pay increase. It's a gross reduction over a 12 month period but it's still a pay increase relative to the previous number of months. That's how a private sector peer would view it...

Riskymove · 13-07-2009 10:04am

leeroybrown wrote: »

It depends on how you look at it. If you're a public sector employee who's been paying the pension levy since it came in and gets an annual increment in August then you're getting a pay increase. It's a gross reduction over a 12 month period but it's still a pay increase relative to the previous number of months. That's how a private sector peer would view it...

I know there is a lot of talk about increments, especially in the current climate but they are a reasonable practice in general.

The idea is that when you get a job the salary is on a scale over a certain timescale, based on the idea that as you get more experienced you are better at your job (insert predictable public sector bashing comment here)
and so get a raise.This system means that we dont have 300,000 people involved in individual negotiations for pay rises and makes the public pay bill more predictable.

while they are technically not automatic, they are generally seen as such and thats an issue that needs to be confronted (i.e. assessment, review)

As in many other issues raised here, the reduction in numbers in the oublic service is likely to be the most straightforward way by Govt for cutting the bill and will certainly save more than freezing increments.

Time Magazine · 13-07-2009 10:16am

Just briefly perused the report but it seems to be lacking a lot of in-depth analysis.

The report, from what I saw, just looks at means. That's not much use. You need to take the mean conditional on everything else. (There are no "shop floor" jobs in the public sector, so obviously they'll get paid more on average -- what you have to do is try and compare wages for similar jobs.) So having read the report for all of 30 seconds, I'd say the media are really mis-reporting this. No surprises there.

So I don't think the gap is anywhere near 50%. Better analyses have been done by the ESRI and they find the gap is about 20% -- about 10% for the top jobs and about 30% for the crapper jobs.

P. Breathnach · 13-07-2009 10:29am

The Economist wrote: »

... about 30% for the crapper jobs.

Who sets the rates for toilet cleaners?

Time Magazine · 13-07-2009 10:31am

P. Breathnach wrote: »

Who sets the rates for toilet cleaners?

If you're punning my use of "crapper", I give you a 5 out of 10.

If you're asking who sets the wages for the low-paid public sector jobs, the answer is benchmarking.

Riskymove · 13-07-2009 10:31am

P. Breathnach wrote: »

Who sets the rates for toilet cleaners?

generally outsourced...thankfully....wouldn't fancy that on my Business Plan

Riskymove · 13-07-2009 10:34am

The Economist wrote: »

If you're asking who sets the wages for the low-paid public sector jobs, the answer is benchmarking.

in part

wages were set in the past under old bargaining system...national pay deals and in some cases Benchmarking set out % increases in wages since.

Time Magazine · 13-07-2009 10:39am

Sorry, you're right. I meant social partnership, not benchmarking.

gurramok · 13-07-2009 10:43am

P. Breathnach wrote: »

Who sets the rates for toilet cleaners?

What are the rates for toilet cleaners in the public service?

Riskymove · 13-07-2009 10:48am

gurramok wrote: »

What are the rates for toilet cleaners in the public service?

not sure...but apparantly they holiday in Australia once a week!

steof1984 · 13-07-2009 10:50am

Usually those kind of jobs (cleaning,security) are tenured out to a private company.

So they dont get Public Service pay scales.

All public sector pay scales can be found on

www.publicjobs.ie

I think there are scales for nightwatchmen and cleaners but (and i might be wrong open to corresction) i think there for people who have those jobs years and years and are such dying out.

Time Magazine · 13-07-2009 10:53am

gurramok wrote: »

What are the rates for toilet cleaners in the public service?

"Cleaners" start on €21,700, moving up to €25,500.

Let's take the mid-point there which is about €23,500. Let's be honest here: cleaners should be on minimum wages, or very close to it. The minimum wage is €17k afaik, so that's a difference of €6,500, or a gap of about 40%.

On the other hand good graduate level jobs are on €42k after two years. BoI graduates are on €36k after two years, a €6k gap, or about a 17% gap.

So these very quick figures indicate that the ESRI's figures of "about 20% on average, more for lower grades" is about right.

Gumbo · 13-07-2009 10:58am

gurramok wrote: »

What are the rates for toilet cleaners in the public service?

in Dublin City Council, the security staff are from a contracted company, ie they dont work for the public service directly.

Edit - some cleaning staff are directly employed by DCC and from the link posted above, their starting salary is €400.80 per week (€20,841.60 iirc)

Riskymove · 13-07-2009 10:59am

The Economist wrote: »

"Cleaners" start on €21,700, moving up to €25,500.

Let's take the mid-point there which is about €23,500. Let's be honest here: cleaners should be on minimum wages, or very close to it. The minimum wage is €17k afaik, so that's a difference of €6,500, or a gap of about 40%.

there are not that many "cleaners" in the Civil service these days...most have retired and not been replaced and the task outsourced by contract to private cleaning firms

while the above rates are for a FTE I do not think they were fulltime either so were probably only earning a proportion of that

Time Magazine · 13-07-2009 11:15am

Riskymove wrote: »

there are not that many "cleaners" in the Civil service these days...most have retired and not been replaced and the task outsourced by contract to private cleaning firms

Yeah, in both public sector places I've worked they've been outsourced, too.

while the above rates are for a FTE I do not think they were fulltime either so were probably only earning a proportion of that

It doesn't matter once they're paid pro rata. A lot of people who work in shops etc are only part-time, so we're looking for the per-hour rate, which holds if they're paid pro rata.

Fat_Fingers · 13-07-2009 12:43pm

ChowChow wrote: »

Lets also add in a mix of private sector perks such as corporate days out, bonuses, free health care, relocation allowances, petrol allowances, various freebies (phone, mobile internet, laptop) to balance things out a little.
Having worked in both sectors I can promise you that 'slacking off' is in fact a well-known human condition that does not discern between public and private sectors.

I dont think this is correct. I work for US company and there is no corporate days out, bonuses, free health care, relocation allowances, petrol allowances, various freebies (phone, mobile internet, laptop).. nothing. Maybe somewhere else or it used to be for some high up managers. What we did get recently was 15% layoff's , 10% pay reduction. But you wont hear about 120 people let got from X company because they do it smartly so it doesn't hit headlines. They let go 2 -3 people this week, then 2-3 next week , then 6 next week and all like that.

BTW, not here to bash one or the other side , just to correct possibly wrong perception.

Riskymove · 13-07-2009 12:50pm

Fat_Fingers wrote: »

I dont think this is correct.

unfortunately both public and private sector can be tarnished with "a one brush for all"

and unfortunately there are those who are happy to do that

2007-public-private pay gap was 48%!

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