Public Service Pay Cut 2%

OMD

There was an article in yesterdays Sunday Times suggesting that the pay cut for public servants earning less than 60K would be 2%. Is 2% cut in gross pay, a little over 1% cut in take home pay worth all this stress?

http://www.timesonline.co.uk/tol/news/world/ireland/article6927052.ece
"As 200,000 public sector union members prepare for a one-day strike on Tuesday, government officials are examining plans for a three-tiered pay cut.
One source said this could become a 2% cut for those earning less than €50,000-€60,000 a year, a 4% cut for those up to €100,000 a year, and a cut of 6% or more for those above that amount"

Riskymove

obviously it does not say but I would imagine gross-pay

this is the main issue with the strike tomorrow....its a strike to make a point rather than being against anything concrete

Dr Galen

any workups on how much that would raise from a revenue point of view?

OMD

Mystik Monkey wrote: »

any workups on how much that would raise from a revenue point of view?

An avewrage 4% cut would save about 800 million I think.

Dr Galen

see what shot this for the government as the pension levy. They messed it up and missed the chance to get people onside. Rightly or wrongly, it's seen as a con-job. I hate saying this....but i know plenty of people in the PS who have said that if it had just of been called a cut, and not packaged up as a levy, then they'd have little issue.

I think I'm understanding you right, in saying that a 1% drop isn't much to be getting the knickers in a twist about?

Riskymove

Mystik Monkey wrote: »

I think I'm understanding you right, in saying that a 1% drop isn't much to be getting the knickers in a twist about?

I agree that if this is what the Governemnt proposed, its unlikely we'd have a strike tomorrow...but......


....its a paper quoting a source...nothing more than that

the Govt wants a saving of €1.3bn and this would not cover that so there must be other things as well

Dr Galen

i should edit that

what i mean is that :

am i understanding the OP in that he is saying that 2% isn't much to be getting riled up about?

Riskymove

Mystik Monkey wrote: »

i should edit that

what i mean is that :

am i understanding the OP in that he is saying that 1% isn't much to be getting riled up about?

yes i think that is what he is saying

P. Breathnach

Mystik Monkey wrote: »

... I think I'm understanding you right, in saying that a 1% drop isn't much to be getting the knickers in a twist about?

Nice to see that the proposed cut has already been halved.

BC

I don't think people would be striking if they were told it was 2%. The unions have been throwing around figures of 7% which is why people are up in arms.

The_Conductor

Assuming the bulk of the workers are on the higher band (which should be set a lot higher- but I won't go there) if a 2% cut is projected to save EUR800m in pay- you have to remember it will also result in a 480m loss in income tax and levies- so for a lot of aggrevation- you're only 320m better off at the bottom line.

By rights the pensions levy malarky should be abolished- and a straight line deduction factored into gross salaries too.....?

The_Conductor

BC wrote: »

I don't think people would be striking if they were told it was 2%. The unions have been throwing around figures of 7% which is why people are up in arms.

The Sunday Indo was suggesting 12% and 2 weeks enforced unpaid leave.......

Who knows what the proposal is- the unknown is worse than anything else.......

ardmacha

2 weeks enforced unpaid leave.

I'd vote for that. Hopefully at a time when flights are reasonably priced.

Riskymove

ardmacha wrote: »

I'd vote for that. Hopefully at a time when flights are reasonably priced.

no public servant i have discussed this with would be against it as an alternative to a straight cut

FGR

Riskymove wrote: »

no public servant i have discussed this with would be against it as an alternative to a straight cut

It's the approach being taken in the US and other countries - it makes sense and doesn't feel as unjustified.

OMD

P. Breathnach wrote: »

Nice to see that the proposed cut has already been halved.

1% in take home pay. A little less than that if you are top rate tax payer, a little more if standard rate.

mikemac

smccarrick wrote: »

2 weeks enforced unpaid leave.......

An excellent idea

OMD

BC wrote: »

I don't think people would be striking if they were told it was 2%. The unions have been throwing around figures of 7% which is why people are up in arms.

Surely that is the problem with the strikes. Unions do not know real figures but still want to strike. The figure was never going to be 7% as far as I know. The government said it wanted cuts of a little over 6% in pay bill but a lot of that would come from job losses and reduction in overtime etc.

Riskymove

OMD wrote: »

1% in take home pay. A little less than that if you are top rate tax payer, a little more if standard rate.

a 2% cut in gross pay would not result in 1% loss in take home

OMD

Riskymove wrote: »

a 2% cut in gross pay would not result in 1% loss in take home

what would it result in?

Riskymove

OMD wrote: »

what would it result in?

very little

The_Conductor

OMD wrote: »

what would it result in?

Allowing for the reduction being at the higher rate, and levies etc- between 56 and 62% of gross pay gets swallowed up by taxes and levies. So- a 2% cut in gross would be a .8 to .9% cut in net......?

Dr Galen

P. Breathnach wrote: »

Nice to see that the proposed cut has already been halved.

my mistake P Breathnach, that should read 2% and I've edited accordingly.

OMD

Riskymove wrote: »

very little

Well I was thinking. 2% less pension contribution, less pension levy, less tax. For top rate tax payer that brings reduction to 0.6% of gross pay coming off net pay. So should be roughly a little less than 1% of net pay.

Riskymove

smccarrick wrote: »

Allowing for the reduction being at the higher rate, and levies etc- between 56 and 62% of gross pay gets swallowed up by taxes and levies. So- a 2% cut in gross would be a .8 to .9% cut in net......?

as I said very little

other things like prsi are also salary related amounts and would be slightly reduced

in some nice round figures, if you arned €1,000 a week you would lose €20 a week gross probably resulting in about €7 a week loss in net pay

nothing to get worked up over

Riskymove

OMD wrote: »

Well I was thinking. 2% less pension contribution, less pension levy, less tax. For top rate tax payer that brings reduction to 0.6% of gross pay coming off net pay. So should be roughly a little less than 1% of net pay.

yes I was implying that it would not even be 1% of take home

OMD

Riskymove wrote: »

as I said very little

other things like prsi are also salary related amounts and would be slightly reduced

in some nice round figures, if you arned €1,000 a week you would lose €20 a week gross probably resulting in about €7 a week loss in net pay

nothing to get worked up over

So you are saying a 2% reduction in Gross pay would lead to a 0.7% cut in gross pay for a top rate tax payer. Isn't that more or less what I was saying. Yet a little more than 1% if basic rate tax payer. Or on average 1% cut in takehome pay.

So back to the point. Why strike over 1% cut in take home pay.

jimmmy

Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat. Talking about cutting about 2% or 1 % or 0.6% of public sector pay is a bit like trying to save Aer Lingus by getting the Aer Lingus staff to work 1% harder. Its time for proper cuts, instead of a 2% or 1% cut which may save a few hundred million . - the sooner the better. Michael O'Leary said he would slash 20 billion of govt expenditure. Now theres a leader.;)

Riskymove

OMD wrote: »

So you are saying a 2% reduction in Gross pay would lead to a 0.7% cut in gross pay for a top rate tax payer. Isn't that more or less what I was saying. Yet a little more than 1% if basic rate tax payer. Or on average 1% cut in takehome pay.

as above, I was saying that it would not even be 1%

I wasn't arguing, actually reinforcing what you said

So back to the point. Why strike over 1% cut in take home pay.

the answer is still the same as my first post

this is just a media story


there were other stories in other papers mentioning higher cuts

Riskymove

jimmmy wrote: »

Michael O'Leary said he would slash 20 billion of govt expenditure. Now theres a leader.;)

did he say how he would do it?

The_Conductor

Riskymove wrote: »

did he say how he would do it?

On previous form- by slashing anything that couldn't be justified inside of 2 sentences. The public sector paycut would be the very least of anyone's worries- knowing Michael O'Leary- its entirely possible that social welfare could be abolished in its entirety........ Michael O'Leary represents extreme capitalism. The problem in this country is an unhappy marriage of capitalism with socialist ideology. It works when there is plenty of money to round- there isn't at the moment.........

P. Breathnach

Riskymove wrote: »

did he say how he would do it?

It doesn't matter. He's not going to have the opportunity, and he wouldn't want it.

His pronouncements were simply another tactic for getting publicity for what really matters to him: increasing profits for Ryanair.

Riskymove

It doesn't matter. He's not going to have the opportunity, and he wouldn't want it.

On previous form- by slashing anything that couldn't be justified inside of 2 sentences

Yes thanks I know all that..and you are of course, correct...I am wondering about jimmmy's answer and his views on leadership

OMD

Riskymove wrote: »

the answer is still the same as my first post

this is just a media story


there were other stories in other papers mentioning higher cuts

So how high would the pay cuts have to be to justify a strik?
If 2% is acceptable. What is not acceptable?
To be honest a pay cut over 4% was never on the cards from government announcements

jimmmy

Riskymove wrote: »

did he say how he would do it?

There is a seperate thread and link on that : read it yourself.

jimmmy

smccarrick wrote: »

- knowing Michael O'Leary- its entirely possible that social welfare could be abolished in its entirety.........

Rubbish. Reading the papers at the weekend - and the link in the thread on Michael O'Leary - I do not recall where he said anything of the sort.

kippy

This two weeks enforced unpaid leave would work out at almost a 4% cut in gross spend by the government on wages. Nothing wrong with the idea per se. It could be the next in a line of cost saving measures.

Riskymove

OMD wrote: »

Riskymove wrote: »

So how high would the pay cuts have to be to justify a strik?
If 2% is acceptable. What is not acceptable?

in my own opinion, unless they went crazy (10% +) I dont think strikes like we are having tomorrow are acceptable at all


dont forget its actually 2,4 and 6% on top of an average 7.5% levy and 6% or so foregone from an agreed deal + reductions in allowances in many areas etc on top of income and health levies and prsi increases etc


I believe that by not telling us what they are doing, they are allowing people to be stirred up and scared into acting in such a manner

tomorrow, rather than being against any particular actions, has become some sort of "action day" to show a united front by the public sector that they are not just gonna take anything and that the government should act in agreement with unions.

kippy

jimmmy wrote: »

Rubbish. Reading the papers at the weekend - and the link in the thread on Michael O'Leary - I do not recall where he said anything of the sort.

Jimmy, seriously, whatever shred of respect people have for you in your quest, it will be all but lost if you consider MoL to be anything but a WUM and marketing man of the highest order.

Riskymove

jimmmy wrote: »

There is a seperate thread and link on that : read it yourself.

well maybe you should have stuck to that thread and not drag this one off topic like all the others!

McTigs

jimmmy wrote: »

Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat. Talking about cutting about 2% or 1 % or 0.6% of public sector pay is a bit like trying to save Aer Lingus by getting the Aer Lingus staff to work 1% harder. Its time for proper cuts, instead of a 2% or 1% cut which may save a few hundred million . - the sooner the better. Michael O'Leary said he would slash 20 billion of govt expenditure. Now theres a leader.;)

Agreed.

I will be really pissed off if this is true. If the PS are going to kick up blue murder anyway and "bring the country to a standstill" then cut 7% on lower, 12% on middle and 15% on upper and be done with it.... they'll still be very well paid.

If the country has to endure a nationwide strike tomorrow and possibly more down the road, we best make it worthwhile and make some decent savings

OMD

McTigs wrote: »

Agreed.

I will be really pissed off if this is true. If the PS are going to kick up blue murder anyway and "bring the country to a standstill" then cut 7% on lower, 12% on middle and 15% on upper and be done with it.... they'll still be very well paid.

If the country has to endure a nationwide strike tomorrow and possibly more down the road, we best make it worthwhile and make some decent savings

The government has said for ages that it wants to cut 1.3Billion from public sector pay bill. This works out at an average 6% cut. A lot of this will be cuts in overtime and early retirement/natural wastage and loss of contract workers. Why are people in both public sector and private sector surprised that the cuts will be this small. It has been flagged for months.

jimmmy

kippy wrote: »

Jimmy, seriously, whatever shred of respect people have for you in your quest, it will be all but lost if you consider MoL to be anything but a WUM and marketing man of the highest order.

He is one of the top businessmen in the country, and someone who has created the biggest brand to come out of Ireland since the eighties. Its one of the biggest airlines in the world, and one of the few of Irelands home grown success stories. Along with another top Irrsh business person, they were asked in the papers at the weekend wat they would do with the economy ( he does seem to know a lot about controlling budgets etc ). Most people would find his opinions on the real world and economics more believeable and his business track record more plausible that the muppets - the social partners - who have been running the counrty / deciding govt expenditure over the past decade.
My point was"Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat." " Its time for proper cuts, instead of a 2% or 1% cut public sector pay cut which may save a few hundred million . - the sooner the better."
In my opinion , and others, the 2% cuts outlined by the original poster would be a case of too little, too late.

kippy

jimmmy wrote: »

He is one of the top businessmen in the country, and someone who has created the biggest brand to come out of Ireland since the eighties. Its one of the biggest airlines in the world, and one of the few of Irelands home grown success stories. Along with another top Irrsh business person, they were asked in the papers at the weekend wat they would do with the economy ( he does seem to know a lot about controlling budgets etc ). Most people would find his opinions on the real world and economics more believeable and his business track record more plausible that the muppets - the social partners - who have been running the counrty / deciding govt expenditure over the past decade.
My point was " Its time for proper cuts, instead of a 2% or 1% cut public sector pay cut which may save a few hundred million . - the sooner the better." "Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat."

Jimmy. I read your post earlier on the titanic and its deck chairs. No need to repeat it ad nausem throughout this and other threads.

I dont give a flipping toss who MoL is or what he has done. Fair play to him. His aims are to maximise profits for his airlines through whatever means are legally possibly. Why dont you ask bastions of business such as former chair people of banks for such as Anglo for their thoughts? They had the same roles within their companies and for a time were very good at it.
The top business people in this country up until the last 24 months were the heads of banks, did you hang on their every word?
I respect MoL as a business man, however his soundbits and lack of in depth specifics is laughable and anyone that cant see through what his intentions are when he speaks about politicians in this country is at the very least foolish.

I could do what he said, I'd cut the bill by 20 billion and increase income to state coffers by 10 more billion.

wandatowell

Im thinking around 6.5% pay cut

Dr Galen

jimmmy wrote: »

He is one of the top businessmen in the country, and someone who has created the biggest brand to come out of Ireland since the eighties. Its one of the biggest airlines in the world, and one of the few of Irelands home grown success stories. Along with another top Irrsh business person, they were asked in the papers at the weekend wat they would do with the economy ( he does seem to know a lot about controlling budgets etc ). Most people would find his opinions on the real world and economics more believeable and his business track record more plausible that the muppets - the social partners - who have been running the counrty / deciding govt expenditure over the past decade.
My point was"Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat." " Its time for proper cuts, instead of a 2% or 1% cut public sector pay cut which may save a few hundred million . - the sooner the better."
In my opinion , and others, the 2% cuts outlined by the original poster would be a case of too little, too late.

in fairness Jimmmy I'd find a lot of peoples opinion more plausible than those running the country for the past while. Where Michael O'Leary comes on the plausibility ladder is still far from top though

Taxipete29

jimmmy wrote: »

He is one of the top businessmen in the country, and someone who has created the biggest brand to come out of Ireland since the eighties. Its one of the biggest airlines in the world, and one of the few of Irelands home grown success stories. Along with another top Irrsh business person, they were asked in the papers at the weekend wat they would do with the economy ( he does seem to know a lot about controlling budgets etc ). Most people would find his opinions on the real world and economics more believeable and his business track record more plausible that the muppets - the social partners - who have been running the counrty / deciding govt expenditure over the past decade.
My point was"Talking about 2% or 1 % or 0.6% of public sector pay is a bit like re-arranging the deckchairs on the Titanic. Public servants in this country are paid 40% more than the average in the eurozone, according to Eurostat." " Its time for proper cuts, instead of a 2% or 1% cut public sector pay cut which may save a few hundred million . - the sooner the better."
In my opinion , and others, the 2% cuts outlined by the original poster would be a case of too little, too late.

Yawn....zzzzzzzzzzzzzzz

The_Conductor

Arguing that Irish public sector workers are paid 40% more than some of their European counterparts is taking an incredibly blinkered view though. Private sector employees are paid a commensurate amount above their EU colleagues also- and the cost of living in Ireland is according to Eurostat 38% higher than the EU average.

If you want to cut pay- you also need to cut the cost of living- or else you risk putting people who you would consider to be on reasonable wages, in penury.

If you are insistent on playing the public sector versus the private sector card- which you seem to be- the fact of the matter is that the public sector have had their net pay cut by 9% thus far. According to IBEC (who should know), over 75% of private sector employees have not had any reductions in salary thus far.

The whole exercise is moot.

Ireland is quite simply too expensive- on all levels. Pay in both public and private sector has to fall to levels that make us competitive when compared to international competitors. The cost of living also has to fall. We have the most expensive electricity in Europe, the second most expensive gas, the third highest rate of indirect taxation on goods and services, and stupid tax shelters that have hotels plonked around the country like so many mushrooms.........

Why do people insist on allowing the media herd us like sheep into a public sector versus private sector bashing frenzy? We need to sit down and figure how to get our costs down- and we need to reinvent Ireland from the bottom up.

If people imagine that the public sector and its paybill account for the lions share of Ireland's ills- think of all the companies in the private sector laying off workers- because its cheaper to up sticks and move elsewhere. I am not suggesting a race to the bottom- simply, if we are unable to compete- it indicates that we are probably in the wrong market. If we're insistent that we want an assembly line in Limerick- or a pill plant in Waterford- we need to see how we can add value to a process that can be performed literally anywhere in the world- and not throw our hands up in surprise when we hear about more redundancies.........

Ireland has a lot going for it- but if we are to succeed- we need to reinvent the country from the bottom up.......

Paulzx

jimmmy wrote: »

In my opinion .

Which we truly value:D

The_Conductor

OMD wrote: »

The government has said for ages that it wants to cut 1.3Billion from public sector pay bill. This works out at an average 6% cut. A lot of this will be cuts in overtime and early retirement/natural wastage and loss of contract workers. Why are people in both public sector and private sector surprised that the cuts will be this small. It has been flagged for months.

In 2009, Public Servants delivered savings of €1.3 Bn (Levy = €940m; Payroll Savings due to non-filling of vacancies = €150m; Pay Freeze = €230m)

In 2010, without any additional measures this will contribute €2,.4 Bn
(Levy = €1.1Bn; Payroll Reductions = €300m; Pay Freeze = €990m)

61% of government current expenditure was funded by borrowings in 2009.

A further EUR4billion in savings is actually peanuts- and only the first of many similar steps. We need to remove similar or higher amounts from the budget each year for the next 4-5 years, if we are ever to escape the spiralling effects of our ballooning national debt.

OMD

smccarrick wrote: »

In 2009, Public Servants delivered savings of €1.3 Bn (Levy = €940m; Payroll Savings due to non-filling of vacancies = €150m; Pay Freeze = €230m)

In 2010, without any additional measures this will contribute €2,.4 Bn
(Levy = €1.1Bn; Payroll Reductions = €300m; Pay Freeze = €990m)

61% of government current expenditure was funded by borrowings in 2009.

A further EUR4billion in savings is actually peanuts- and only the first of many similar steps. We need to remove similar or higher amounts from the budget each year for the next 4-5 years, if we are ever to escape the spiralling effects of our ballooning national debt.

I accept all you are saying. (although how did the pay freeze save money except reduce the amount they expected to spend rather than actually reducing the spend)

My point though is about the current pay cuts. I posted the Times link because it agrees with what I have also thought. The coming pay cuts are going to be relatively small. I don't see the point in striking about them.