ESRI Oct 9th: public/private sector pay difference of 26% based on job characteristic

CleverUsername

jimmmy wrote: »

I and most others , if not all others, I think, understood the above, so do not know which posts you refer to.
Incidentally, the example you take is of a low paid p.s. worker ( "PS Worker earning €40,000" ...the average p.s. renumeration at retirement is a lot more ), but the principle remains the same.

The more people that understand the better Jimmmy. I believe the system needs greater understanding and transparency rather than mud slinging and rumour. That way we can move forward and form educated opinions.

Idbatterim

but would you actually have to pay them more? people in the private sector are doing exactly the same jobs for different amounts of pay...

Amhran Nua

jimmmy wrote: »

Some bankers bought bank shares out of their own money at / near the top of the market....if as you say "that they acted in expectation of a taxpayer bailout" they would not have done so, as they would have known shares would have collapsed, which they did.

That depends on how soon they were planning on selling them.

Pharaoh1

Just to get back to the pensions issue I am pretty certain that there are many people currently in receipt of a contributory old age state pension and a full Public Service pension.
In one case i know someone worked in the private sector for five years back in the sixties and paid PRSI or a "stamp" as it was called back then and then moved and worked the full 40 yrs for the govt.
Apparently only a small number "stamps" for a certain period was necessary for pension. Not sure if its a full contrib pension or pro rata between contrib and non contrib but its a pretty good situation to be in.

Could this happen in future? For example if a Garda retired on full pension at 50 and gets a job (even v short hours just to get in to the PRSI system) can he/she claim a state pension at 65/66 on the basis of these contributions as well as PS pension?

cyclopath2001

jimmmy wrote: »

Sometimes they exist in multinationals, but not always , and ...
Such pensions are not paid by the taxpayer, thats the difference.

No they're paid by the unfortunate customers of those companies.

BroomBurner

Pharaoh1 wrote: »

Just to get back to the pensions issue I am pretty certain that there are many people currently in receipt of a contributory old age state pension and a full Public Service pension.
In one case i know someone worked in the private sector for five years back in the sixties and paid PRSI or a "stamp" as it was called back then and then moved and worked the full 40 yrs for the govt.
Apparently only a small number "stamps" for a certain period was necessary for pension. Not sure if its a full contrib pension or pro rata between contrib and non contrib but its a pretty good situation to be in.

Could this happen in future? For example if a Garda retired on full pension at 50 and gets a job (even v short hours just to get in to the PRSI system) can he/she claim a state pension at 65/66 on the basis of these contributions as well as PS pension?

You're asking two very different questions.

1. If someone works in the private sector and pays in to a pension pot (be it state or private), do they qualify for an additional pension on top of their public sector pension? Yes, if they have paid for it, then they are entitled to it.

2. Can someone work after they have legally retired, and still receive their pension? As far as I'm aware, you have to declare all your earnings to the tax office, so I'm guessing that the pension would be reduced to reflect the incoming earnings.

Either way you look at it, if someone chooses to pay in to a pension, or even two or three pensions, then they get them all when they retire. You could if you want.

cyclopath2001

BroomBurner wrote: »

Yes, if they have paid for it, then they are entitled to it.
.

Isn't that the key question. Who really pays for the pensions?

Riskymove

Idbatterim wrote: »

but would you actually have to pay them more?

if you scrap the pension entitlement then you couldn't take contributions could you?

therefore rather than paying a higher gross pay the state would have to stop collecting contributions of 13.5% (i.e.a loss in revenue or an increase in expenditure depending on how you look at it)

further there is no way you could just remove current expectations from a lot of public workers who are in the system for a long time. You cannot say to someone "we are no longer going to give you a pension" after telling them for 20 or 30 years that they would get one and that they could not start their own pension plan. A more likely event is a change to defined contribution

realistically, at best such changes could be brought in for new entrants most likely


if you ended a PRSI related pension the state would have to forgo a further 10% (from the majority of the public and private workforce); however I could never see that happening; the result would be a high level of poverty for the elderly

Riskymove

cyclopath2001 wrote: »

Isn't that the key question. Who really pays for the pensions?

its an interesting point that isn't considered enough

the majority of both private and public are paye workers

many public are now full prsi and most of private is too

few people will actually contribute fully on their own to a PRSI OAP pension (based on expected lifetime) especially if their is a dependent involved

many private sector workers will have employer contributions and tax relief contributing towards their final pot in addition to their own so not too many will contribute fully on their own there either

johnnyskeleton

joolsveer wrote: »

He was unable to give a comparator for soldiers.

Paramilitaries? I mean, they're kinda like part time soldiers.

jimmmy

Riskymove wrote: »

many private sector workers will have employer contributions and tax relief contributing towards their final pot in addition to their own

"many" ? I would suggest a small proportion of the 1,800,000 people in the private sector ( shop workers, farm workers, labourers, factory workers, professional + business people, tradesmen, construction workers, service industry workers etc etc ) will have the "employer contributions and tax relief contributing towards their final pot in addition to their own" you talk about. Many will never even have heard of a pension pot, never mind have a pension in any way comparable to the average public sector pension. As every public service person knows, their pension is a nice little perk, thats why they want to hang on to it. It may be difficult to value such a perk ( just as its difficult to value other public service perks such as shorter working week, job security, less stress etc )

Now, back to the real thread : public/private sector pay difference of 26% based on job characteristic .....why should the p.s. not be paid slightly less than the private sector, as is the case in most developed countries ?

cyclopath2001

jimmmy wrote: »

Many will never even have heard of a pension pot, never mind have a pension in any way comparable to the average public sector pension.

facts please jimmmy: how much is the average public sector pension, how much is the average private sector pension, how much of each was paid for in full by the pensioner and how much is paid for by others?

jimmmy

cyclopath2001 wrote: »

facts please jimmmy: how much is the average public sector pension,

The cso will not release that info - maybe they are on paid stress leave ? Joking aside, it is half the salary at completion of service, plus, the ps person gets a windfall lump sum cheque for one + a half years salary.
Given average p.s. salary of 50 k ( in round figures ), due to age promotion etc finishing salaries must be more than that on average - 60k would not be unreasonable given the number of younger people on 40k.
If thats the case - and it is probably not far off the mark - then average p.s. pension is worth 30k , with the tax free lump sum of 90 k in addition.
This is paid by the government.

cyclopath2001 wrote: »

how much is the average private sector pension,

The govt pays just over 200 a week ie just over 10k a year old age pension. Not everyone qualifies for that.

Yes, there is a big difference between public sector + private sector pension costs incurred by the govt, as you can see.

cyclopath2001 wrote: »

how much of each was paid for in full by the pensioner and how much is paid for by others?

The govt received most of its tax from the private sector. Its the private sector who sends in payments for all the various taxes ( vat, capital gains, capital acquisitions, vrt, stamp duty, income tax etc ) to the govt.
The govt pays its employees + other expenditure with this money ( + borrows approx 25 billion this year to meet the shortfall ). When it pays public sector workers. When the govt pays its public sector workers, it takes back income tax etc straight away....tgiving someone 5 apples + taking back 2 apples at the same time is the same thing as just giving them 3 apples.

Now, back to the real thread , as attempted before : public/private sector pay difference of 26% based on job characteristic .....why should the p.s. not be paid slightly less than the private sector, as is the case in most developed countries ?

cyclopath2001

jimmmy wrote: »

If thats the case - and it is probably not far off the mark - then average p.s. pension is worth 30k

So you're guessing, taking the largest figure that suits your position. You don't have any figures.

jimmmy wrote: »

The govt pays just over 200 a week ie just over 10k a year old age pension. Not everyone qualifies for that.

How much if you have a dependent spouse? It's double then? And most people do qualify, yes? And what about the perks given by the government to private sector pensioners? You've leaving a lot of stuff out to make the difference appear larger than it is. And you're omitting that the private sector pensioners have not paid in enough by way of PRSI to cover what they get out again. I thought it was your position that people should pay in full for their own pensions? Have you suddenly gone all socialist?

jimmmy wrote: »

why should the p.s. not be paid slightly less than the private sector, as is the case in most developed countries ?

Why shouldn't people be paid the same for the same work? Wouldn't that be fair?

jimmmy

cyclopath2001 wrote: »

So you're guessing, taking the largest figure that suits your position. You don't have any figures.

The cso or the govt will not release any figures - at least that I can find - on the average public service pension. However, we do know the average public sector wage, as confirmed by the c.s.o., so we have a rough idea of what the average public sector pension is....it is certainly more than half the average p.s. wage, due to age , promotion etc

cyclopath2001 wrote: »

Why shouldn't people be paid the same for the same work? Wouldn't that be fair?

And no allowance made for the p.s. perks of pension, shorter working week, security etc ?

N.B. if you think "shouldn't people be paid the same for the same work", I am glad that you therefore agree by deduction there should be a 26% decrease in average public sector pay.

irish_bob

Hydrosylator wrote: »

On the bright side, at least health has improved in results.
Education is criminally under-funded, and always has been. I went to a school that was 25% prefabs, finished in pre-tiger years. That school is now about 60% prefabs.

If we let education slip, we lose one of our greatest advantages in the international job market.

i could say i was underfunded for going out in wet weather even if i spent all my money on a coat and none on a hat , most of the education expendeture goes towards teachers wages which are very high by international standards

jimmmy

well put, better than I ever could

cyclopath2001

jimmmy wrote: »

I am glad that you therefore agree by deduction there should be a 26% decrease in average public sector pay.

Not so fast. A 26% across the board cut would be unfair. Some PS workers have much less of a difference when compared to the private sector, some have more. After the pension-levy-pay-cut, some may now be underpaid relative to comparable private sector positions.

We'll also need to define a mechanism to prevent excessive levels of pay in the private sector or it will feed inflation.

Amhran Nua

cyclopath2001 wrote: »

We'll also need to define a mechanism to prevent excessive levels of pay in the private sector or it will feed inflation.

You combat inflation with interest rate rises, not by telling private companies how much they can pay people.

cyclopath2001

Amhran Nua wrote: »

You combat inflation with interest rate rises, not by telling private companies how much they can pay people.

The higher wages will result in higher charges for services & calls for pay parity by the public sector. For example - embeded IT companies that effectively run major government computer systems.

The free-marketeers have already abandoned capitalism when it comes to the banks and property market, why not control the labour market too?

irish_bob

cyclopath2001 wrote: »

Not so fast. A 26% across the board cut would be unfair. Some PS workers have much less of a difference when compared to the private sector, some have more. After the pension-levy-pay-cut, some may now be underpaid relative to comparable private sector positions.

We'll also need to define a mechanism to prevent excessive levels of pay in the private sector or it will feed inflation.

no guard i know would have a snowballs hope in hell of doing aswell in the private sector, same with teachers and nurses , which area are you refering to

Amhran Nua

cyclopath2001 wrote: »

The higher wages will result in higher charges for services & calls for pay parity by the public sector.

If your intended purpose is to control inflation, you don't start by reducing wages. That leads to stagflation, which is the quick route to becoming a third world country. The other levers of the economy are there for a reason, so citing inflation control as a reason to cap wages doesn't work.

cyclopath2001

Amhran Nua wrote: »

If your intended purpose is to control inflation, you don't start by reducing wages. That leads to stagflation, which is the quick route to becoming a third world country. The other levers of the economy are there for a reason, so citing inflation control as a reason to cap wages doesn't work.

Pay levels are certainly not the only factor affecting inflation. Controlling all salaries would play an important role in stablising the economy. It's a logical extension of the private sector's desire to contain public-sector costs. For example, high salary levels in the past sustained hyper-inflation in property values here and huge outflows investing in dodgy Bulgarian properties and over-priced Italian handbags.

We're already well on the way to being a 3rd world country as the property market and banking sector are in the control of a wealthy elite whose newspapers are pushing to reduce the pay, conditions and rights of ordinary workers.

Hydrosylator

irish_bob wrote: »

i could say i was underfunded for going out in wet weather even if i spent all my money on a coat and none on a hat , most of the education expendeture goes towards teachers wages which are very high by international standards

Of course most of the spending goes on wages, but that doesn't make education over-funded. Look how we rank among the rest of Europe.
Source

Slightly below the EU average.
Equal to the Eurozone average.

I was under the impression that all wages in Ireland were high by international standards.

Rob67

johnnyskeleton wrote: »

Paramilitaries? I mean, they're kinda like part time soldiers.

Don't go comparing terrorists with the Defence Forces, it is a huge disservice to those who have served (and those who died for) this country and a personal insult to me, having served too. You probably meant it as a joke, believe me it isn't funny.

Lets get something straight here, there is no comparator for the DF. The taskings and hours of operation are not governed by the statutes that every other employee in this country get to enjoy ie maximum hours of work, certain health and safety regulations. The training that each soldier undergoes is radically different from any other employee. They are also required to maintain skills training, constant up-skilling, service obligations (overseas missions etc) just to be retained in service, unlike most, if not all, other employees.

irish_bob

Rob67 wrote: »

Don't go comparing terrorists with the Defence Forces, it is a huge disservice to those who have served (and those who died for) this country and a personal insult to me, having served too. You probably meant it as a joke, believe me it isn't funny.

Lets get something straight here, there is no comparator for the DF. The taskings and hours of operation are not governed by the statutes that every other employee in this country get to enjoy ie maximum hours of work, certain health and safety regulations. The training that each soldier undergoes is radically different from any other employee. They are also required to maintain skills training, constant up-skilling, service obligations (overseas missions etc) just to be retained in service, unlike most, if not all, other employees.

soliders the world over tend to be under paid , i disagree with this strongly , how much does an irish soldier earn btw

Amhran Nua

cyclopath2001 wrote: »

It's a logical extension of the private sector's desire to contain public-sector costs.

The public sector is a part of the private sector - it essentially represents one large corporation that all the rest of the private sector pays into for services. Thus the more the rest of the private sector earns, the more they will have to pay the public sector. It really is that simple.

cyclopath2001 wrote: »

For example, high salary levels in the past sustained hyper-inflation in property values here and huge outflows investing in dodgy Bulgarian properties and over-priced Italian handbags.

Salaries and house price inflation do not track one another at all. The property boom had nothing to do with high salaries, and much more to do with lax lending rules from the banks, allowing a higher and higher multiple of lower salaries to be loaned out.

Although while we're on the subject I'd love to see a comparitive study of equity release, specuvestment properties and similar costs among public sector workers, given the perception of job stability they would have had.

cyclopath2001 wrote: »

We're already well on the way to being a 3rd world country as the property market and banking sector are in the control of a wealthy elite whose newspapers are pushing to reduce the pay, conditions and rights of ordinary workers.

Whats an ordinary worker? I agree they are wildly out of control and I have serious objections to taxpayer money going to shore up their bottom line (this whole NAMA farce can be summed up by the banks saying that the current market is "insufficiently profitable").

If AN get into power that lot will be repatriated in an awful hurry.

cyclopath2001

Amhran Nua wrote: »

The property boom had nothing to do with high salaries, and much more to do with lax lending rules from the banks, allowing a higher and higher multiple of lower salaries to be loaned out.

People can only repay out of earnings. The more they feel they can afford, the higher the loan they'll take on, the higher the price they'll bid.

Amhran Nua wrote: »

Whats an ordinary worker?

Someone who travels economy class, doesn't have a swimming pool and does their own laundry.

Amhran Nua wrote: »

If AN get into power that lot will be repatriated in an awful hurry.

I won't vote for a party with an Irish-langauge name.

cyclopath2001

jimmmy wrote: »

And no allowance made for the p.s. perks of pension, shorter working week, security etc ?

Do you measure productiivity or hours worked? If you take account of 'job security' you'll have to define what that means, effectively guaranteeing 'unsackability'.

Amhran Nua

cyclopath2001 wrote: »

People can only repay out of earnings. The more they feel they can afford, the higher the loan they'll take on, the higher the price they'll bid.

Not really. One notable effect of the boom was of people taking on loans as high as they could possibly get - affordability didn't come into it.

cyclopath2001 wrote: »

Someone who travels economy class, doesn't have a swimming pool and does their own laundry.

That might also describe a couple of well known millionaires.

cyclopath2001 wrote: »

I won't vote for a party with an Irish-langauge name.

Every party has an Irish language name. Some might choose to go with their English name first and foremost, but nonetheless. In any case our name was selected for a very specific reason.