Has benchmarking been a catalyst in our economic problems?

Hollyg'lightly

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

NewDubliner

Hollyg'lightly wrote: »

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

'Catalyst' is an appropriate word. Giving pay rises to the public sector was an essential component in channeling money to the property sector.

Now, the game has changed, the property sector has captured its wage-slaves, and the property/bank cartel are changing the rules.

P. Breathnach

Hollyg'lightly wrote: »

Has the fact that the public sector compared their wages prior to benchmarking, to Tommy Joe the carpenter who was earning 1,000 euro plus in the boom time, and aligned it with his wage at the time, caused our country to crumble, or would the situation still be as dismal without benchmarking?

It didn't "cause our country to crumble", nor was it a major factor. But now that the property bubble has burst, and we are also suffering our share of the international economic problems, the appalling structure of our public finances has been exposed.

I'd guess (somebody else might have figures) that benchmarking might account for between €1bn and 2bn of our projected exchequer deficit. While that is an enormous amount, when we relate it to the other problems we face, it can seem like peanuts.

Diarmuid

It was a factor but not the major factor. But don't worry, The upcoming benchmarking (down) of wages will correct things.

Right?

Right?

Arnold Layne

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

dresden8

Anybody care to give us numbers or will all the usual prejudices be played out here?

Again.

Actual stats and figures like.

P. Breathnach

Diarmuid wrote: »

It was a factor but not the major factor. But don't worry, The upcoming benchmarking (down) of wages will correct things.

Right?

Right?

Wrong.

Wrong.

There seems to be no plan to benchmark again, even though many believe it would be a good idea. But I am sure that public service pay and pensions will be reduced in the budget. When combined with the "Pension Related Deduction" (that's what it's currently called) the total hit on the public sector will be greater than benchmarking, probably far greater.

And our problems won't be solved. Slightly alleviated.

[PS: And some of those who attack the public sector here still won't be satisfied.]

ardmacha

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

Did I miss a reversal of benchmarking pay awards? Was there a reverse benchmarking? I'll have to pay attention better.

Diarmuid

If you want facts and figures, they are here



Not that figures will make a differences to any sense of entitlements around here

NewDubliner

Arnold Layne wrote: »

Benchmarking was great for the Public Sector when wages went up. Now thats its in reverse they don't want to know.

It's no different to the way the banks won't countenance benchmarking of existing mortgage repayments.

Diarmuid

Here are some more facts and figures

The Economic and Social Research Institute has published a study which finds the pay gap between workers in the public and private sector is 26%.

Last month the ESRI came to a similar conclusion based on factors such as education and qualifications.

The Institute came up with largely the same result using a different methodology this time - job evaluations.

dresden8

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

And before Gurramok comes in to point out that the nett is only .4% or so I would like to point out that the 9% increase was also a gross figure to be reduced by tax, PRSI, pension levy et al. We can all play the gross nett game.

Remember, don't let these facts change your prejudices, that would mean you were wrong.

And we don't want that do we?

Diarmuid

NewDubliner wrote: »

It's no different to the way the banks won't countenance benchmarking of existing mortgage repayments.

"It's no different?" What cloud cuckoo land are you living in? Do you understand basic financial transactions?

NewDubliner

Diarmuid wrote: »

If you want facts and figures, they are here

According to the author:

Lest we forget the most obvious, in every year of the series, public sector workers were paid more per year than their private sector counterparts*......Public sector includes public administration and education, but excludes health. No data there for some reason. Private sector includes all sector apart from agriculture (again no data).

He did not compare like with like. For example he included low paid car salesmen and checkout assistants and excluded high paid self-employed in the private sector 'counterparts'.

NewDubliner

Diarmuid wrote: »

"It's no different?" What cloud cuckoo land are you living in? Do you understand basic financial transactions?

You mean that contracts with rich people cannot be broken but contracts with ordinary people can?

Diarmuid

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda

I don't see you factor in the value of the pension in your "calculations"?

dresden8

NewDubliner wrote: »

You mean that contracts with rich people cannot be broken but contracts with ordinary people can?

Bond holders and shareholders who gambled cannot lose their money but PAYE workers can go fnck themselves.

That's exactly what he means.

Sand

Simple answer, yes. It was a politically motivated buying of the unions and public sector voters. It was carried out on the back of unsustainable revenue generated from property transactions. It was'nt sustainable, but the unions didnt care where the money was coming from.

Now the gravy train is over and theyre furious. But they will only need to return to 2003 pay and conditions. Nothing too draconian.

dresden8

Diarmuid wrote: »

I don't see you factor in the value of the pension in your "calculations"?

You may recall the title of this thread concerns benchmarking.

If you want to comment on pensions there are several threads you can go into.

Excellent work on ignoring those numbers by the way. Well done.

That was a full on 100% ignoring of the facts and a changing of the subject in one fell swoop.

Masterclass.

Diarmuid

NewDubliner wrote: »

He did not compare like with like. For example he included low paid car salesmen and checkout assistants and excluded high paid self-employed in the private sector 'counterparts'.

The point of his article was

# As you can see, the gap has widened, not narrowed over the decade. In fact, in euro terms, it widened 8 years out of 10! And after the two years of greater private sector increases (prizes for eyesight if you can spot them on the graph), there were huge increases in public sector pay the following year.
# Public sector pay is at least five years ahead of private sector pay. What public servants earned in 2003 took their private sector counterparts until 2008 to earn (in fact, they’re not even there yet, another €500 or so to go!).

But of course you knew that which is why you ignored the ESRI study which I will quote again for you:

The Economic and Social Research Institute has published a study which finds the pay gap between workers in the public and private sector is 26%.

Last month the ESRI came to a similar conclusion based on factors such as education and qualifications.

The Institute came up with largely the same result using a different methodology this time - job evaluations.

Diarmuid

But at the end of the day, at least we can look forward to the leveling of the playing field over the next few years when the government cuts public sector wages. It's a done deal at this stage.

gurramok

Yes they were a catalyst, among a number of factors. One of the best social welfare rates in the EU is another.

Thing is, we never heard the unions at the time of benchmarking shouting stop, the money is too much.

Arnold Layne

gurramok wrote: »

Thing is, we never heard the unions at the time of benchmarking shouting stop, the money is too much.

They couldn't, the snouts of Begg, O'Connor, McLoone, et al , were too deep in the trough

namenotavailablE

At least we can look forward to the leveling of the playing field over the next few years when the government cuts public sector wages.

Do I detect a degree of schadenfreude in the above? It may be worth considering the following:

While it's extremely likely that public sector employeees will suffer significant pay-cuts in the immediate budget (and it's by no means clear that it will be a one-off cut- watch that space in 12 months- and try do a calculation of the Net Present Value of the foregone income over the lifespan of your remaining career), perhaps it's worth remembering that virtually EVERYONE suffers as a result of the lower spending which inevitably results- including pubs, cafés, clothes shops, cinemas, hotels, service industries etc etc.

Additionally, the impact is likely to be felt disproportionately in regions which are more reliant on public sector pay- the town in which I reside will almost certainly be very seriously hit as it has a weak and failing industrial base, a relatively low-end service sector (retail/ tourism/ relatively 'traditional' financial + legal businesses) and a sizeable level of public sector employment. As a public sector worker, I pity these private sector businesses as I and many of my colleagues have been making plans about what likely life-changes we'll be making when these cuts take effect- clearly a massive dollop of heretofore discretionary spending will be chopped.

We may all feel that things are not so good now but just wait until Brian Lenihan unleashes the hounds on Dec 9th.

eoinbn

Catalyst, no. Symptom, yes.

gurramok

namenotavailabl, thats a result of govt policy. Remember decentralisation?

Country towns only had construction, farming and public sector employment for opportunity.

The property bubble has destroyed this country. Its a classic example of greed over innovation and young people are suffering today because of it. http://www.rte.ie/news/2009/1112/primetime.html

namenotavailablE

Yes- I broadly agree with you, gurramok.

We will all spend much of the next generation trying to muddle our way out of the mess as we try to revert to a sustainable financial footing.

It won't be pretty. Expect further casualties....

ConsiderThis

namenotavailabl wrote: »

Yes- I broadly agree with you, gurramok.

We will all spend much of the next generation trying to muddle our way out of the mess as we try to revert to a sustainable financial footing.

It won't be pretty. Expect further casualties....

I seem to remember that also being said in the 1970's and 1980's. The problem seems to be that by the time the "next generation" comes along they'll continue to vote for the same political party which seems to always lead us to the same financial disaster, and we appear to learn nothing.

Count Dooku

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

And before Gurramok comes in to point out that the nett is only .4% or so I would like to point out that the 9% increase was also a gross figure to be reduced by tax, PRSI, pension levy et al. We can all play the gross nett game.

Remember, don't let these facts change your prejudices, that would mean you were wrong.

And we don't want that do we?

Benchmarking was only part of deal between public services and state
You forgot to mention that doesn’t matter how PS worker will work, he will get pay increase anyway

http://www.finfacts.ie/irelandbusinessnews/publish/article_10006397.shtml

Irish public service salaries have risen by 59% in the past five years and the payroll has expanded by 38,000 extra staff.

Increases in public sector over the period due to general rounds total €2,479m (or 24.3%), “special” pay increases (primarily Benchmarking) total €1,328m (or 13%), and other factors (such as extra numbers) total €2,193m (or 21.6%).

OMD

dresden8 wrote: »

Okay, I'll give it a lash.

Remember, don't forget to ignore any facts that don't suit your agenda.

Base before benchmarking 100

Average benchmarking of 9% 109

less pension levy average7.5% 100.8

Benchmarking is worth an increase of approx .8% in public sector earnings. Approximately .4% this year.

?

Where are you getting the figure that benchmarking increased the salary of the average public servant by 9%?

OMD

dresden8 wrote: »

You may recall the title of this thread concerns benchmarking.

If you want to comment on pensions there are several threads you can go into.

Excellent work on ignoring those numbers by the way. Well done.

That was a full on 100% ignoring of the facts and a changing of the subject in one fell swoop.

Masterclass.

He wasn't ignoring the figures. You said base 100. Benchmarking increased it to 109. Pension levy decreased it to 100.9

However pension base 50. Benchmarking increased it to 54.5. Pension levy did not lower pension at all. So even with your figures benchmarking and pension levy combined lead to an extra 0.9% pay increase (over and above all other pay increases) a 9% increase in your pension and a 9% increase in your tax free lump sum on retirement.

So well done you for ignoring the facts.

Masterclass.

Tipp Man

I think that anyone who tries to dismiss the contributory factor of benchmarking to our current mess is living in cuckoo land, its obviously a factor, not the only, but still a major factor.

The worst thing about benchmarking is that we have seen absolutely no reform for the billions it has cost us, in fact there are thousands and thousands more PS workers than 10 years ago, teachers are still getting 5 months holidays, productivity has not increased 1 iota.

What exactly was the money for??

jimmmy

Tipp Man wrote: »

What exactly was the money for??

I remember asking one retired public servant on this board what the retired public servants did with their 18 months tax free lump sum pension payment, and he was honest enough to say in his experience one of the things was to buy property for offspring. Thanks for helping the bubble, lads;)

P. Breathnach

jimmmy wrote: »

I remember asking one retired public servant on this board what the retired public servants did with their 18 months tax free lump sum pension payment, and he was honest enough to say in his experience one of the things was to buy property for offspring. Thanks for helping the bubble, lads;)

You refer to me, and you are wrong. Never let the truth get in your way.

jimmmy

P. Breathnach wrote: »

You refer to me, .

no actually, I was not.

P. Breathnach wrote: »

and you are wrong. Never let the truth get in your way.

In your experience, what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

P. Breathnach

jimmmy wrote: »

no actually, I was not.


In your experience, what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

I don't believe you. I could ask you to back your claim up, but I am well used to what happens when I do that: you fail to do so. What the hell, I'll ask you anyway: can you back up this claim:

I remember asking one retired public servant on this board what the retired public servants did with their 18 months tax free lump sum pension payment, and he was honest enough to say in his experience one of the things was to buy property for offspring.

Dannyboy83

jimmmy wrote: »

I remember asking one retired public servant on this board what the retired public servants did with their 18 months tax free lump sum pension payment, and he was honest enough to say in his experience one of the things was to buy property for offspring. Thanks for helping the bubble, lads;)

Wheter its true or not, nobody has the right to dictate to another person how they spend their own money. They are entitled to spend it how they choose.
The fault is at the foot of the government here, not the PS employees, for allowing the situation to occur.

(You can't take last nights debacle out on the French people who have benefited from it. You have to take it up with Fifa and henry.)

If we are going to find effigies outside of government and banking, there are plenty of devious property agents across the country where we can start first.

jimmmy

P. Breathnach wrote: »

I don't believe you.

I do not care if you do or not...I have more to do with my time than to read through over 2000 posts to show you a sentence.:D

Now, any chance you will answer the question already asked of you :
In your experience, what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

P. Breathnach

jimmmy wrote: »

I do not care if you do or not...I have more to do with my time than to read through over 2000 posts to show you a sentence.:D

Now, any chance you will answer the question already asked of you :
In your experience, what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

I already answered that question for you. I have more to do with my time than repeat what I told you.

jimmmy

P. Breathnach wrote: »

I already answered that question for you.

Not in this thread or in the recent past.
So go on, ah go on, go on, go on, ..."what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ? Property ? Retirement homes ( even though some retired public servants on full pension are in their late forties / early fifties )? Hardly shares ? It must be a worry to know what to do with 80 or 90 k lump sum tax free ( and sometimes € 300,000 plus ) these days. Some much so I am reliably informed "retirement courses" lasting two days are on offer to at least some retiring people with problems such as that.;)

P. Breathnach

jimmmy wrote: »

Not in this thread or in the recent past.
So go on, ah go on, go on, go on, ..."what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ? Property ? Retirement homes ( even though some retired public servants on full pension are in their late forties / early fifties )? Hardly shares ? It must be a worry to know what to do with 80 or 90 k lump sum tax free ( and sometimes € 300,000 plus ) these days. Some much so I am reliably informed "retirement courses" lasting two days are on offer to at least some retiring people with problems such as that.;)

Find my previous answer. And find the other post on the subject that you claim exists. Prove that I am wrong in my belief that jimmmy doesn't do evidence.

jimmmy

P. Breathnach wrote: »

Find my previous answer.

I am not willing to trawl through over 2800 posts. In any case, I am more concerned with what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

P. Breathnach

jimmmy wrote: »

I am not willing to trawl through over 2800 posts.

Of course not. Nor are you willing to use the search function. Or find evidence for anything.

In any case, I am more concerned with what do you currently think retired public servants spend or spent their 18 months tax-free lump sum payment on ?

I think the same as I did last time I posted on the matter.

And I still think that you invented the "retired public servant on this board [who] was honest enough to say in his experience one of the things was to buy property for offspring".

jimmmy

P. Breathnach wrote: »

`
Of course not.

would you trawl throgh 2800 posts either ? I would not expect you to.

P. Breathnach wrote: »

`
Nor are you willing to use the search function.

I have often used the search engine but I doubt if the search engine would be able to pluck that one sentence out of the many hundreds of posts you made about the public service.

P. Breathnach wrote: »

`
Or find evidence for anything.

I often found evidence for you, many times. The most recent time being ( yet again ) the link to c.s.o. pay.

P. Breathnach wrote: »

`
I think the same as I did last time I posted on the matter.

So its property no.1, followed by retirement homes, followed by what else...please elaborate to save people trying to find your post from a few months ago. Maybe there is a business in this ...trying to market to people who have high disposable income, after their kids are reared, mortgage paid off etc. Maybe a thread if not new business could be started on that. Thanks.;)

namenotavailablE

In general it is beneficial if the money is spent in the economy- spending supports economic activity and employment as well as contributing to the government's taxation revenues.
It doesn't terribly matter on what exactly it's spent on, whether it's a house or a handbag. I don't think anyone can dictate that another person should spend their capital on anything in particular or indeed spend it at all- it's a free market and a matter of personal preference and choice.

jimmmy

namenotavailabl wrote: »

In general it is beneficial if the money is spent in the economy- spending supports economic activity and employment as well as contributing to the government's taxation revenues.
It doesn't terribly matter on what exactly it's spent on, whether it's a house or a handbag. I don't think anyone can dictate that another person should spend their capital on anything in particular or indeed spend it at all- it's a free market and a matter of personal preference and choice.

I still think maybe there is a business in this ...trying to market to people who have high disposable income, after their kids are reared, mortgage paid off etc. Public servants who retire after completion of service with a tax free lemp sum of 18 months salary....mmmmnnn. Another poster who has worked in an auctioneers office revealed that in their experience most people who purchased holiday homes were public servants - specifically teachers. Now that people are not buying property I wonder where does all this windfall tax free lump sum money go ?

namenotavailablE

There absolutely IS a business in it and a well established one at that- think of hotels offering 'Golden years' breaks and the level of advertising of goods and services (especially health and financial) aimed specifically at the retiree/ older market- even Woodie's offer a 10% discount on Thursday's to over 65's.
My own parents are probably typical of people of their generation- once their mortgage was repaid and the offspring fled the nest, they found that they had more disposable income than before. Add in the possibility of an inheritance when their own parents ultimately die and you can see the possibilities.

Dr Galen

could you two please stop bickering and discuss the actual topic. Like two old women arguing all day long!

to respond to the OP, no IMHO it didn't cause the mess we're in right now. Now that we're in this mess, is it causing a major problem, yes.

We can talk about benchmarking adding fuel to the property bubble fire, and that probably has some merit, as it raised the disposable incomes of many workers. This same effect though happened in the private sector too, with people earning increased wages for work done, one of the main reasons that we lost competitiveness over the last decade.

Unsustainable tax revenues and general short sightedness on behalf of the government in power, along with a gullible electorate made more of an effect IMO. Add into that the sub-prime crisis in the US and the knock on effect to the Euro economies and you have the real catalysts. Everything else, is nearly more of a follow on symptom

namenotavailablE

could you two please stop bickering

I presume that you aren't referring to me - I didn't think I was bickering with anyone!

P. Breathnach

jimmmy wrote: »

... So its property no.1, followed by retirement homes, followed by what else...please elaborate to save people trying to find your post from a few months ago. Maybe there is a business in this ...trying to market to people who have high disposable income, after their kids are reared, mortgage paid off etc. Maybe a thread if not new business could be started on that. Thanks.;)

We are in jimmmy's world of invention again. Don't make things up: it's not honest.

Scofflaw

P. Breathnach, jimmmy, stop bickering, or take it to PM. It's disruptive, which means it will attract the obvious sanction if it continues.

moderately,
Scofflaw