unions take note of Greece

ei.sdraob

heres a country (run by a very left wing government and strong unions) that decided to continue borrowing and not face up to unions


http://www.bloomberg.com/apps/news?pid=20601087&sid=afOQz2Kq9VTc&pos=2

. Greece is seeking to raise 53 billion euros ($74 billion) in funds this year to reduce a budget deficit of almost 13 percent of gross domestic product, the biggest shortfall in the European Union.

Greek government bonds extended their declines, pushing the yield on the 10-year note 39 basis points higher to 7.14 percent.

thats quite a slide from just few days ago > http://www.rte.ie/business/2010/0122/greece.html

older graphs comparing to Ireland here > http://www.boards.ie/vbulletin/showthread.php?t=2055798021


notice how things started to diverge with last budget

do the unions still claim we are on a "wrong track" or "an opportunity was missed"? :rolleyes:


and will the unions try to steer us into a Greek like oblivion?


P.S: some interesting stuff here:

http://www.google.com/publicdata?ds=wb-wdi&met=sp_pop_totl&idim=country:IRL:GRC&tstart=-315619200000&tunit=Y&tlen=48
http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:IRL:GRC&tstart=-315619200000&tunit=Y&tlen=48
http://www.google.com/publicdata?ds=wb-wdi&met=ny_gnp_mktp_pp_cd&idim=country:IRL:GRC&tstart=315532800000&tunit=Y&tlen=28

Flex

Really good post. Also keep in mind that if the ECB increases its minimum credit rating requirement for countries to have to adhere to to be allowed to borrow from them next year, Greece is going to find its situation becoming far far worse as time goes on.

Seems to reaffirm the fact that the cuts were the correct course of action and the government needs to remain steadfast in the coming future in the face of pressure to do as the PS unions are demanding and send us down the same path we followed in the 1980's.

And no, unfortunately Id bet anything the unions wont listen. Theyre on a crusade to avoid living in the real world and have decided no amount of common sense or basic maths will stop them.

picpress

ei.sdraob wrote: »

do the unions still claim we are on a "wrong track" or "an opportunity was missed"? :rolleyes:

One post in five and a half hours too bad you did all that research not too many are jumping to your flame bait:D

Maybe you are actually trying to generate some debate if so I am very very SORRY:rolleyes:

ei.sdraob

picpress wrote: »

One post in five and a half hours too bad you did all that research not too many are jumping to your flame bait:D

Maybe you are actually trying to generate some debate if so I am very very SORRY:rolleyes:

burying head in sand not gonna change the facts

tho then again thats exactly what they trade unions are doing

gandalf

LOL do you actually thing that the unions are going to pull their heads out of the sand pit they are buried in to take notice of this.

The onus is on this government and whatever one replaces it to ensure that services that are vital to the state are protected with a no-strike clause and to diminish the powers of the unions with regard to the public service even if it means a protracted strike to bring things to a head.

Flex

picpress wrote: »

One post in five and a half hours too bad you did all that research not too many are jumping to your flame bait:D

Maybe you are actually trying to generate some debate if so I am very very SORRY:rolleyes:

This is the attitude that really gets to me. Its just complete and utter "I dont care what happens in the real world"

• We need to reduce the cost of labour in the economy as much as we can to attract FDI and MNCs and try to develop export driven economic growth like we had in the early 1990's. Its going to be hard to bring down the cost of labour when the public sector is so highly paid.
• Reports showed (on average) the public sector was paid 26% more than their private sector counterpart. There was a very good point on the detrimental effect this has on the economy made in another thread; when the PS is so much more attractive as a career path than the private sector in terms of job security, perks and benefits, pensions, lower pressure, easier promotions and higher pay, it will make the best and brightest opt for careers in the public sector, rather than going into the private sector and applying their skills to creating wealth, enterprise, employment, etc. because the risk just isnt worth it.
• Based on what happened last April, it appears income tax is at the point of diminishing returns and in order to try deal with cross border shopping, VAT needed to be dropped, os the only realistic option was to cut spending.
• The last time we were in a deep recession/depression we tried to tax and spend our way out which made things worse. Things only started to change when the government began to cut its spending.
• If you raise taxes then alot of small-medium businesses who are already struggling will have to cut their expenses to further to be able to pay these taxes, and to do so will probably make more of its workers unemployed.
• Prior to the paycut the PS had the same rate of pay as it had during the Celtic Tiger years.
• The Irish PS is the highest paid on earth.
• If you took out a 110% mortgage to buy a house when you were on ~€35k a year and are finding yourself stretched now, its your own fault.
• This is the same public sector who guaranteed they could take an extra 12 days off and still provide the same level of output and service.
• The PSs employer is borrowing over €20B a year just to cover its short term expenses.

Theres never any actual sound argument given out against why the government shouldnt have cut spending. Its usually "Make the banks/fat-cats pay", "Youve been brainwashed by the media", "Dont trust the government", "Whats wrong with continuously borrowing?", "Facts and figures dont mean anything", etc. and threats to obstruct reform (making it sound as if it was just about to start :rolleyes:)

The post by ei.sdraob points out the other obvious fact that while unions keep going on and on that we are going down the wrong road, the other option they keep saying we have to take was taken by Greece. Which country is in worse shape, economically, at the moment?

The_Honeybadger

I think it is pretty clear that Greece chose the delay action and hope for the best route and it didn't work. Irish Gov have been commended for what they are doing and they should continue to correct their finances while they have the momentum. I truly understand Public Servants anger but I think deep down most of them know it had to be done. If we had carried on as we were those headlines would be Ireland in the not too distant future. The cost of the public service went completely out of control, whose fault this is is another matter, but it had to be brought back in line. We can all say that we didn't cause the crash (except for a few bankers etc) but we all enjoyed the ride while times were good. Wages should never have got to where they were in the first place and it is down to complete incompetence and bad management. I hope we don't forget this when the next election comes around.

hobochris

Flex wrote: »

And no, unfortunately Id bet anything the unions wont listen. Theyre on a crusade to avoid living in the real world and have decided no amount of common sense or basic maths will stop them.

This is why they need to be given an ultimatum, play ball or be dealt with thatcher style.

woodseb

Flex wrote: »

[*]The Irish PS is the highest paid on earth.

they were all excellent points but i fear this comment is going to throw this thread completely off topic

The_Honeybadger

Flex wrote: »

• The Irish PS is the highest paid on earth.

It isn't actually but that is beside the point, it comes down to what we can afford, Ireland made long term plans on the back of fine day tax revenue like VAT and Stamp duty. It was always going to end in tears but it would have taken a brave man to yell stop as we enjoyed one of the highest living standards in the world. That has now changed utterly, we are facing a future of higher taxes and a lower standard of living, private and public sector better get used to it. The unions will do all they can to delay the necessary as they are only interested in their members, that is what their members pay them for, they don't care about the greater good, even though I'm sure they know they would only be delaying the day of reckoning.

Flamed Diving

Top post. The silence from the other side is deafening.

silverharp

Also given the company we keep , (see chart below) if we dont get our act together , wait for labour to start bitching in the Dail using their "cargo cult" understanding of economics as to why interest rates are going up and what is the government going to to about it.



PIIG spreads are now firmly wider than BRICs

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/volcker/PIIGS%201.28.jpg

ei.sdraob

BRIC = Brazil, Russia, India and China if anyone is unaware of term

there was an interesting article here few days ago

http://ftalphaville.ft.com/blog/2010/01/26/134711/an-eye-catching-quote/

silverharp

Japan is an interesting case, a couple of % rise in gov. borrowing rates and their budgets are blown out of the water. And guess what their ageing savers have just started to become net sellers of domestic debt.

The Volt

Flamed Diving wrote: »

Top post. The silence from the other side is deafening.

They're all out at work.

WalterMitty

PS pay far too high compared to EU averages and in rest europe they also pay much higher taxes so our crowd had massive net income over past decade. Must move public sector pay and pensions to EU average while also moving costs in economy to average Eu levels too. Will be tough but essential for our economic survival. We are'nt a rich country, GNP is collpasing and public and private debt rocketing, we'll be working as a nation just to pay our debts if the books arent balanced soon and taxes cant be rised much more so expenditure must fall.

ei.sdraob

well Greece is now getting bailed out by EU

except in order to receive money they must cut PS wage bill among other things

unions of Ireland do take note, keep it up and yeer next in line

ei.sdraob

more on this story

http://www.independent.ie/business/irish/irish-banks-owed-euro6bn-by-shaky-greek-economy-2041519.html

Irish banks owed €6bn by shaky Greek economy

A SMALL group of Irish banks may be dangerously exposed to more than €6.1bn in perilous Greek debt, according to a new report.

Greece is teetering on the edge of a financial abyss, with increasing fears that the country may default on its debt as Greek bond yields soared on uncertainty over the economy.

This has led to suggestions that Europe was preparing a rescue plan for the stricken Balkan state. The exposure may take the form of sovereign, corporate and bank debt, according to BNP Paribas analyst Olivia Frieser, citing figures from the Bank of International Settlements in a report to clients.

However hedging could have reduced the overall exposure. “Irish bank exposure would be spread over a few banks only,” according to Ms Frieser. Ireland and the UK account for 23 per cent of outstanding Greek debt, according to figures published in the Financial Times last week.

“In the unlikely event that Greece lost its access to funding markets, we believe that it would get help from its European partners to avoid a default — precisely because of the potential contagion risk, we think other EU countries would not want to live through what might happen otherwise,”

Bank of America Merrill Lynch said in a note. However, the European Commission said an EU bailout of Greece was not possible, speaking as the euro meanwhile fell to the lowest level in more than six months against the dollar. Greece is not the only risky economy that Irish banks may be exposed to, according to BNP Paribas.

Last week’s report suggests that Irish banks may be on the hook for nearly €23bn worth of Spanish debts of various varieties, including sovereign, corporate and bank debts. This may become more of an issue, with “rockstar” economist Nouriel Roubini describing Spain as posing a bigger problem for the EU than Greece.

why do I get a feeling that if Greece goes down then the taxpayers of this country will be presented with another bank bailout despite any opposition

alex73

I do often wonder is unios reps passed maths in the leaving cert. But the facts are they are only interested in getting the best deal for their members. As regards to the FF ministers who got use in this mess we are in, It seems their go honores in PR but e's in Maths. At the end of the day they bought the last 2 elections on money from a bubble. 10 years ago the town I live in has 1 hotel, 10 years later it has 6 hotels and all of them with only 20% occupancy and staff on short time. All down to a tax incentive that has left Ireland in ruins.

ei.sdraob

alex73 wrote: »

But the facts are they are only interested in getting the best deal for their members.

Ha

q. whats the difference between Unions, FF and other lobby groups/organisations?

a. they all want to screw the country, the average person on street and the taxpayer for the benefit of their "members"

Euro_Kraut

ei.sdraob wrote: »

Ha

q. whats the difference between Unions, FF and other lobby groups/organisations?

a. they all want to screw the country, the average person on street and the taxpayer for the benefit of their "members"

Dont you mean 'What do they all have in common?'

Of course every organization exists for it own benefit (expect charities) despite them saying otherwise. I'm puzzled as to why Unions should be expected to act differently.

Euro_Kraut

ei.sdraob wrote: »

BRIC = Brazil, Russia, India and China if anyone is unaware of term

there was an interesting article here few days ago

http://ftalphaville.ft.com/blog/2010/01/26/134711/an-eye-catching-quote/

I like that graph too. We certainly need to get our economy closer to Sweden, Finland, Holland model and further away from the US/UK model.

ei.sdraob

primetime had a thing on greece last night

http://www.rte.ie/player/#v=1065741

skip to 21:40 (the first half was about min wage)

ballinatray

ei.sdraob wrote: »

heres a country (run by a very left wing government and strong unions) that decided to continue borrowing and not face up to unions


http://www.bloomberg.com/apps/news?pid=20601087&sid=afOQz2Kq9VTc&pos=2





thats quite a slide from just few days ago > http://www.rte.ie/business/2010/0122/greece.html

older graphs comparing to Ireland here > http://www.boards.ie/vbulletin/showthread.php?t=2055798021


notice how things started to diverge with last budget

do the unions still claim we are on a "wrong track" or "an opportunity was missed"? :rolleyes:


and will the unions try to steer us into a Greek like oblivion?


P.S: some interesting stuff here:

http://www.google.com/publicdata?ds=wb-wdi&met=sp_pop_totl&idim=country:IRL:GRC&tstart=-315619200000&tunit=Y&tlen=48
http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:IRL:GRC&tstart=-315619200000&tunit=Y&tlen=48
http://www.google.com/publicdata?ds=wb-wdi&met=ny_gnp_mktp_pp_cd&idim=country:IRL:GRC&tstart=315532800000&tunit=Y&tlen=28

Your economic data is impressive, however it only serves to prove in my view, the ultimate responsibility of Government regardless of political systems to manage an economy, independant of the money makers and use wise counsel ( preferably academics ) to regulate an supervise the whole market.....Yes I agree Unions have not yet woken up to the reality of Irelands chaos and are seeking to preserve existing conditions, but that is equally because Government has equally failed to acknowledge that this is economic armageddon here and still look after the pension and salary benefits of a chosen few....THEY SHOULD LEAD FROM THE FRONT...and perhaps a cut of as much as 30% in dail salaries would have been a start to show their genuine intent.....Strange how now the markets are in turmoil, that socialist concepts are used to protect the financial system...

ei.sdraob

ballinatray wrote: »

Your economic data is impressive, however it only serves to prove in my view, the ultimate responsibility of Government regardless of political systems to manage an economy, independant of the money makers and use wise counsel ( preferably academics ) to regulate an supervise the whole market.....Yes I agree Unions have not yet woken up to the reality of Irelands chaos and are seeking to preserve existing conditions, but that is equally because Government has equally failed to acknowledge that this is economic armageddon here and still look after the pension and salary benefits of a chosen few....THEY SHOULD LEAD FROM THE FRONT...and perhaps a cut of as much as 30% in dail salaries would have been a start to show their genuine intent.....Strange how now the markets are in turmoil, that socialist concepts are used to protect the financial system...

you are right the govt should have acted earlier (they shouldn't have brought us to such a point in first place, but what can you do ), it can prove to be a case of too little too late

now we have a case of another EU country (yes there are some differences between us) who decided to take a path similar to what the unions here proposed (ie borrow more for longer), and it went sour

ballinatray

Flex wrote: »

This is the attitude that really gets to me. Its just complete and utter "I dont care what happens in the real world"

• We need to reduce the cost of labour in the economy as much as we can to attract FDI and MNCs and try to develop export driven economic growth like we had in the early 1990's. Its going to be hard to bring down the cost of labour when the public sector is so highly paid.
• Reports showed (on average) the public sector was paid 26% more than their private sector counterpart. There was a very good point on the detrimental effect this has on the economy made in another thread; when the PS is so much more attractive as a career path than the private sector in terms of job security, perks and benefits, pensions, lower pressure, easier promotions and higher pay, it will make the best and brightest opt for careers in the public sector, rather than going into the private sector and applying their skills to creating wealth, enterprise, employment, etc. because the risk just isnt worth it.
• Based on what happened last April, it appears income tax is at the point of diminishing returns and in order to try deal with cross border shopping, VAT needed to be dropped, os the only realistic option was to cut spending.
• The last time we were in a deep recession/depression we tried to tax and spend our way out which made things worse. Things only started to change when the government began to cut its spending.
• If you raise taxes then alot of small-medium businesses who are already struggling will have to cut their expenses to further to be able to pay these taxes, and to do so will probably make more of its workers unemployed.
• Prior to the paycut the PS had the same rate of pay as it had during the Celtic Tiger years.
• The Irish PS is the highest paid on earth.
• If you took out a 110% mortgage to buy a house when you were on ~€35k a year and are finding yourself stretched now, its your own fault.
• This is the same public sector who guaranteed they could take an extra 12 days off and still provide the same level of output and service.
• The PSs employer is borrowing over €20B a year just to cover its short term expenses.

Theres never any actual sound argument given out against why the government shouldnt have cut spending. Its usually "Make the banks/fat-cats pay", "Youve been brainwashed by the media", "Dont trust the government", "Whats wrong with continuously borrowing?", "Facts and figures dont mean anything", etc. and threats to obstruct reform (making it sound as if it was just about to start :rolleyes:)

The post by ei.sdraob points out the other obvious fact that while unions keep going on and on that we are going down the wrong road, the other option they keep saying we have to take was taken by Greece. Which country is in worse shape, economically, at the moment?

everything you said here is so obvious, all i need to know why was it not obvious to government for the last 10 years, because it was obvious to me....competitiveness is now this governments catch - cry...10 years too late.. but to maintain its hold on all services it introduced Benchmarking with grandiose expectations of PS reform and it was only window dressing.. Private industry is strangled by maintaining a huge government quango combined with a huge administrative PS, in a dwindling market ... Thanks to Berties please all politics...Keep in mind population of UK 60 million ( approx ) 600 mp's....per head of population by comparison, it means that we in ireland should have perhaps 40 /45 mp's / td's....Just imagine the size of our PS to service that...14 times as many as britain...and every entrepreneur in the country swetting to maintain that collosus of waste and privilage....

ballinatray

Flex wrote: »

This is the attitude that really gets to me. Its just complete and utter "I dont care what happens in the real world"

• We need to reduce the cost of labour in the economy as much as we can to attract FDI and MNCs and try to develop export driven economic growth like we had in the early 1990's. Its going to be hard to bring down the cost of labour when the public sector is so highly paid.
• Reports showed (on average) the public sector was paid 26% more than their private sector counterpart. There was a very good point on the detrimental effect this has on the economy made in another thread; when the PS is so much more attractive as a career path than the private sector in terms of job security, perks and benefits, pensions, lower pressure, easier promotions and higher pay, it will make the best and brightest opt for careers in the public sector, rather than going into the private sector and applying their skills to creating wealth, enterprise, employment, etc. because the risk just isnt worth it.
• Based on what happened last April, it appears income tax is at the point of diminishing returns and in order to try deal with cross border shopping, VAT needed to be dropped, os the only realistic option was to cut spending.
• The last time we were in a deep recession/depression we tried to tax and spend our way out which made things worse. Things only started to change when the government began to cut its spending.
• If you raise taxes then alot of small-medium businesses who are already struggling will have to cut their expenses to further to be able to pay these taxes, and to do so will probably make more of its workers unemployed.
• Prior to the paycut the PS had the same rate of pay as it had during the Celtic Tiger years.
• The Irish PS is the highest paid on earth.
• If you took out a 110% mortgage to buy a house when you were on ~€35k a year and are finding yourself stretched now, its your own fault.
• This is the same public sector who guaranteed they could take an extra 12 days off and still provide the same level of output and service.
• The PSs employer is borrowing over €20B a year just to cover its short term expenses.

Theres never any actual sound argument given out against why the government shouldnt have cut spending. Its usually "Make the banks/fat-cats pay", "Youve been brainwashed by the media", "Dont trust the government", "Whats wrong with continuously borrowing?", "Facts and figures dont mean anything", etc. and threats to obstruct reform (making it sound as if it was just about to start :rolleyes:)

The post by ei.sdraob points out the other obvious fact that while unions keep going on and on that we are going down the wrong road, the other option they keep saying we have to take was taken by Greece. Which country is in worse shape, economically, at the moment?

everything you said here is so obvious, all i need to know why was it not obvious to government for the last 10 years, because it was obvious to me....competitiveness is now this governments catch - cry...10 years too late.. but to maintain its hold on all services it introduced Benchmarking with grandiose expectations of PS reform and it was only window dressing.. Private industry is strangled by maintaining a huge government quango combined with a huge administrative PS, in a dwindling market ... Thanks to Berties please all politics...Keep in mind population of UK 60 million ( approx ) 600 mp's....per head of population by comparison, it means that we in ireland should have perhaps 40 /45 mp's / td's....Just imagine the size of our PS to service that...14 times as many as britain...and every entrepreneur in the country swetting to maintain that collosus of waste and privilage....

ardmacha

Private industry is strangled by maintaining a huge government quango combined with a huge administrative PS,

Do you suppose that there are more people in the Irish public sector than in Denmark, in the virtuous circle above? The Danish parliament has 179 seats, so not vastly different from here. Ireland has a public finance problem because much of the private sector was engaged in a giant pyramid scheme, not because of the size of the public service.

ei.sdraob

ardmacha wrote: »

Do you suppose that there are more people in the Irish public sector than in Denmark, in the virtuous circle above? The Danish parliament has 179 seats, so not vastly different from here. Ireland has a public finance problem because much of the private sector was engaged in a giant pyramid scheme, not because of the size of the public service.

didn't the govt "cream off" money from this pyramid scheme, and proceeded to increase expenditure (based mainly on once-of transaction taxes), which as illustrated in a parallel thread grew by leaps and bounds...

The_Honeybadger

ardmacha wrote: »

Do you suppose that there are more people in the Irish public sector than in Denmark, in the virtuous circle above? The Danish parliament has 179 seats, so not vastly different from here. Ireland has a public finance problem because much of the private sector was engaged in a giant pyramid scheme, not because of the size of the public service.

If by pyramid scheme you mean property bubble didn't the publc sector buy houses the same as private, and while private sector banks lent recklessly to developers where were the central bank regulators (public sector), asleep at the wheel thats where. We also had one county council (public) come out recently with the frankly shocking admission that it didn't check if builders were complying with regulations, despite all the development levies they were paying, leaving us with some very substandard dwelling that NAMA now has to deal with. This pyramid scheme paid countless billions in exchequer taxes, if this money had been spent wisely, and even some saved we'd also have less of a public finance problem, we might even have money for some stimulus measures. Public expenditure doubled in the last decade you can hardly blame the private sector for that, in fact the public sectors relentless appetite for wage increases had alot to do with that. There was and is good and bad in both sectors so I really think that statement is not true.

View

ardmacha wrote: »

Ireland has a public finance problem because much of the private sector was engaged in a giant pyramid scheme, not because of the size of the public service.

Regulation and enforcement of regulation is the exclusive perjogative of the government/public sector, so stop this "It's all the private sectors fault" nonsense.

We (continue to) have a public finance problem today because - despite Government Revenues starting to drop in Summer 2007 - Government Expenditure has just kept going up.

ardmacha

If by pyramid scheme you mean property bubble didn't the publc sector buy houses the same as private,

The public sector did buy some houses, they have to live somewhere. But as there were more people in the private sector this is where the greatest damage was done. The weakest point in the pyramid were those with ephemeral incomes drawn from the boom who were borrowing to the hilt and inflating the boom.

Regulation and enforcement of regulation is the exclusive perjogative of the government/public sector

Regulation and enforcement of regulation is the exclusive prerogative of the government/public sector

Government sets the policy, nobody suggests that the public sector failed to implement government policy in this matter, the government promoted the boom as a matter of policy.

As noted several times in this forum the government is voted in by the private sector, who are more numerous. The gombeen men voted in a government that set policies that supported their destruction of the country.

We (continue to) have a public finance problem today because - despite Government Revenues starting to drop in Summer 2007 - Government Expenditure has just kept going up.

Indeed it has, as the government has had to support lame duck private sector banks and those who these charlatans have put out of work.

The_Honeybadger

ardmacha wrote: »

The public sector did buy some houses, they have to live somewhere. But as there were more people in the private sector this is where the greatest damage was done. The weakest point in the pyramid were those with ephemeral incomes drawn from the boom who were borrowing to the hilt and inflating the boom.



Regulation and enforcement of regulation is the exclusive prerogative of the government/public sector

Government sets the policy, nobody suggests that the public sector failed to implement government policy in this matter, the government promoted the boom as a matter of policy.

As noted several times in this forum the government is voted in by the private sector, who are more numerous. The gombeen men voted in a government that set policies that supported their destruction of the country.



Indeed it has, as the government has had to support lame duck private sector banks and those who these charlatans have put out of work.

I don't think its a case of one sector being at fault, there is plenty of blame to be shared around, the government must carry the heaviest burden IMO. To say either sector is at fault is a bit simplistic, while the central bank are public workers, so too are Gardai who had no part to play, much the same in the private sector, for every banker there are 10 factory workers. The whole celtic tiger was a myth based on an unsustainable property bubble, and bar a few economic commentators who were largely ignored I didn't hear anybody cry stop.

Sleepy

ardmacha wrote: »

As noted several times in this forum the government is voted in by the private sector, who are more numerous. The gombeen men voted in a government that set policies that supported their destruction of the country.

Got anything to back this up?

Whilst the private sector may be larger, I'd be inclined to think that voting levels are much higher amongst the public sector. Most party hacks I know are part of the public payroll in some form or another.

Amhran Nua

Flex wrote: »

• We need to reduce the cost of labour in the economy as much as we can to attract FDI and MNCs and try to develop export driven economic growth like we had in the early 1990's. Its going to be hard to bring down the cost of labour when the public sector is so highly paid.

While I agree with your overall point, I think too many people are clamouring for a general reduction in wages (private sector) without really contemplating the consequences. FDI brings jobs yes, but it also results in €50 billion capital flight from the economy annually, and lets not forget, its not a final destination, its a stepping stone.

Whats good for individual businesses might not be good for the overall economy, and really, how are we going to reintroduce liquidity to the economy by reducing private sector worker wages? Reduce their spending power even further?

ei.sdraob

/sarcasm
did you hear that people, the public sector are innocent and are saints and in no way were involved or fueled the boom! its business as usual and we should increase our borrowings to keep the gravy train running
/sarcasm

@ardmacha can you explain how the rest of the private sector has adjusted back to 2004 levels (and some like construction have been wiped out altogether)
while the public sector is still rolling in (now borrowed) fat

you dont want to admit that the government (part of the PS), the regulator (part of the PS), the Central Bank (part of the PS) and local authorities (part of the PS) have had anything to do with fueling and ignoring the boom

neither do you want to admit that the rest of the PS at the bidding of the unions have managed to suck up twice as much money while in no way improving the services offered, with most of the money going in wages while infrastructure like schools is badly neglected

no it was all the fault of someone else :rolleyes:

the people who were supposed to monitor, regulate and manage the country have got hopelessly suckered into a bubble, and are now in denial, hell we still haven't got an apology from FF and the buddies

everybody is gonna pay for this mess one way or another, one has to be deluded to believe that the public sector will somehow be "protected" and "were not involved", whatever you may claim what happened happened and the public sector not only rolled in mud they added to the muck pile

ei.sdraob

Amhran Nua wrote: »

to reintroduce liquidity to the economy by reducing private sector worker wages?

you got it sideways, its not about reintroducing liquidity (the banks and ecb can take care of that) but about ensuring people keep their jobs or/and new jobs are created, and remember without the private sector paying taxes the public sector wouldn't survive for long

the longer we remain uncompetitive the more jobs disappear forever or move elsewhere

Amhran Nua wrote: »

Reduce their spending power even further?

yes because we all need to keep buying overpriced houses, expensive cars, and shoddy medical care

the imports into this country have collapsed by a huge amount, (people realizing they dont need junk? or cant afford it?) thankfully the exports are holding strong, if we loose the exports due to uncompetitiveness then this country is totally screwed

Amhran Nua

ei.sdraob wrote: »

you got it sideways, its not about reintroducing liquidity (the banks and ecb can take care of that) but about ensuring people keep their jobs or/and new jobs are created, and remember without the private sector paying taxes the public sector wouldn't survive for long

Reduce private sector wages -> taxes they pay are reduced, direct and indirect -> people spend less -> more businesses close. You need to draw the line and hold it, compete on something besides wages, which we have no option but to do anyway.

ei.sdraob wrote: »

the longer we remain uncompetitive the more jobs disappear forever or move elsewhere

We're not terribly uncompetitive compared to most other developed countries, if you want us to compete with Poland and China on wages, well that doesn't work in any way shape or form.

ei.sdraob wrote: »

yes because we all need to keep buying overpriced houses, expensive cars, and shoddy medical care

Not at all. But you do need a large middle class in order to have a properly functioning economy, and you don't get that by removing spending power. After all thats what all the spin about "confidence" in the media is trying to do - getting people spending again.

ei.sdraob

Amhran Nua wrote: »

Reduce private sector wages -> taxes they pay are reduced, direct and indirect -> people spend less -> more businesses close. You need to draw the line and hold it, compete on something besides wages, which we have no option but to do anyway.

you just described a deflationary cycle in which were in now

once all the imbalances are corrected (were after living thru' a huge inflationary cycle) a floor is reached and growth resumes, think of it as a hangover after a heavy night of drinking

the business most affected are the ones selling luxuries or/and tied to construction, and deserve to be closed, these were a manifestation of the waste and mis-allocation of capital

Amhran Nua wrote: »

You need to draw the line and hold it

draw the line with what? more borrowed at high interest money? in case you havent notice we need to borrow 25billion a year just to keep the country rolling, does you party have a trick up its sleeve than can raise that much money on short notice?

Amhran Nua wrote: »

compete on something besides wages, which we have no option but to do anyway.

you are right we cant compete on wages alone, but please dont tell me yee lot also fall for that whole "smart" economy nonsense, not everyone in this country will become a white collar worker and not everyone has high education

Amhran Nua wrote: »

We're not terribly uncompetitive compared to most other developed countries, if you want us to compete with Poland and China on wages, well that doesn't work in any way shape or form.

our public sector is "terribly notlike" the similar sectors in other developed countries (who are for most part screwed as well)

go start a different thread your taking this offtopic altogether now, this one is about the public sector putting a noose around the heads of taxpayers and dragging them down not about competing with china or poland, this is being illustrated in Greece where the cuts will come in one way or another, you simply can not continue to borrow and ignore reality

Amhran Nua wrote: »

Not at all. But you do need a large middle class in order to have a properly functioning economy, and you don't get that by removing spending power. After all thats what all the spin about "confidence" in the media is trying to do - getting people spending again.

for f sake its borrowed money being removed (money that has to be payed back) not hard earned money, thats one huge point that invalidates that your argument, you would have a point if that money being cut was "earned" in first place

i cant believe that your party falls for the exactly the same shallow rhetoric as other parties sprout, it falls apart under any close examination

what would you rather we continue to borrow billions a year? we already borrowed 5bln last year just to pay off an existing loan
would you go get a loan from a loan shark to pay off your mortgage? no because anyone with any financial sense would realise its daft
every year that we continue to borrow, more and more money raised via taxation ends up being used just to service interest

i sure hope your party thinks carefully about economic policies

by failing to address government expenditure (borrowed money) your wasting more of the income (earned money) on unproductive activities such as servicing debt

Amhran Nua

ei.sdraob wrote: »

draw the line with what? more borrowed at high interest money? in case you havent notice we need to borrow 25billion a year just to keep the country rolling, does you party have a trick up its sleeve than can raise that much money on short notice?

As I mentioned, private sector wages should be maintained as much as possible. Public sector wages (one reason for the abovementioned borrowing) and practices need to be looked at.

ei.sdraob wrote: »

you are right we cant compete on wages alone, but please dont tell me yee lot also fall for that whole "smart" economy nonsense

Particularly outspoken against it, as it turns out.

ei.sdraob wrote: »

go start a different thread, this one is about the public sector putting a noose around the heads of taxpayers and dragging them down

not about competing with china or poland

I was responding to a poster making a comment about private sector wages.

ei.sdraob wrote: »

for f sake its borrowed money being removed (money that has to be payed back) not hard earned money, thats one huge point that invalidates that your argument, you would have a point if that money being cut was "earned" in first place

You are quite right, but I think we might be talking at cross purposes here - I'm referring to private sector wages when I say they should not be reduced, which is to say not borrowed money. And if you had to count on borrowed funds, a point I made in another thread, for the money being pumped into NAMA you could create literally hundreds of thousands of businesses, not just jobs, many of which would end up being viable if carefully targetted. And with near full employment again watch the debt problems clear themselves up.

ei.sdraob

i see the confusion now, ok lets clear it up


A) theres the part of the private sector which services domestic demand (spas,restaurants,car showrooms etc)

and then theres the part of the private sector which exports and in doing so brings in wealth into the economy

C) and finally theres the public sector which is setup to serve the above



B has slowly but surely shrunk in last decade, B is responsible for generating true wealth by selling stuff that people in other countries need, B is responsible for the first "proper" boom in 90s, without B we are truly screwed

A has grown by leaps and bounds in the 00s, but as we now know most of that growth was wasted and misalocated capital (think construction), most of the current job losses are in A

C has doubled in size or more while not producing any better results, C workers are now 30% better paid than A+B, C workers are protected and are now holding A+B ransom


* the income (taxation) from B has fallen slightly (thank god) and exports are still more or less strong
* the income from A has fallen by a huge amount,for such a small market we dont need so many houses etc

* the expenditure to C has grown by leaps and bounds and they are resisting cuts back to the level that A + B already reached (2004 or there abouts)

the money to pay C is being borrowed at large interest, and will have to be paid back by B, unless you hugely increase B (not possible) then who will pay for C? A has suffered the most and were not going back to housebuilding led boom

so that means that C has to be cut (to about 2004) level

you seem to have a problem with cutting C, stating that it will affect A + B (ignoring the fact that they are already negatively affecting the public via strikes)

but short of finding a 20-25 billion worth of oil of the coast of Ireland (or a pot of gold) year on year i dont see how C can continue without cuts

MaceFace

Amhran Nua wrote: »

Reduce private sector wages -> taxes they pay are reduced, direct and indirect -> people spend less -> more businesses close. You need to draw the line and hold it, compete on something besides wages, which we have no option but to do anyway.

This type of justification of keeping wages high annoys me. You could equally say:
Reduce private sector wages -> make Ireland more competitive -> attract investment -> higher employment -> nirvana.

There are many other things that increase competitiveness, but wage cost is one of them.

Amhran Nua wrote: »

We're not terribly uncompetitive compared to most other developed countries, if you want us to compete with Poland and China on wages, well that doesn't work in any way shape or form.

This is true - we have some real advantages over places in Eastern Europe - language and time zone being two. We are however losing jobs to these places because of the cost of doing business here, and we need to reduce that.

Amhran Nua wrote: »

Not at all. But you do need a large middle class in order to have a properly functioning economy, and you don't get that by removing spending power. After all thats what all the spin about "confidence" in the media is trying to do - getting people spending again.

Forget this "get people spending again". We have just gone through the largest spending spree in the history of the state, and are now left with massive debts. To encourage people to continue the splurge instead of bringing down these debts is not what we should be doing (imho).
Yes, this will result in much more short term pain, but considering most the people had their gain already, lets pay for it now so the next generation will not have to pay for the mistakes we made.

Amhran Nua

ei.sdraob wrote: »

you seem to have a problem with cutting C

Not really, I think its one of the last areas where it should be cut, since public sector wages do feed into the wider economy in exchange for neccessary services, but reductions must be made, from the information I currently have.

Can't say I see a lot wrong with your analysis, the confusion seems to have arisen as I was talking to someone about private sector wages.

MaceFace wrote: »

This type of justification of keeping wages high annoys me. You could equally say:
Reduce private sector wages -> make Ireland more competitive -> attract investment -> higher employment -> nirvana.

No, unless you want to compete with the likes of Eastern Europe for wages, which is a non runner. To an employer to whom wages are an important factor (like Dell with its razor thin margins), it will almost certainly outweigh anything else. To everyone else, its not as important. Unless you can drop wages to that level, its best to reap the overall economic benefits by keeping wages at a reasonable level.

MaceFace wrote: »

This is true - we have some real advantages over places in Eastern Europe - language and time zone being two. We are however losing jobs to these places because of the cost of doing business here, and we need to reduce that.

Absolutely agreed, electricity, broadband access and cost, rental rates and cartel behaviour on the part of importers and suppliers are all areas where we can make real inroads with a little forward planning and the oul' joined up thinking.

MaceFace wrote: »

Forget this "get people spending again".

Can't really, if people don't spend, there won't be much of an economy left to talk about. The difference between what I am saying and what the government is saying is we want to build jobs and industry to help repay those debts, the government just wants to shunt as much money as possible into the banks to somehow force them to start lending again. Of course the problem is, why would they bother going to all that troublesome business of lending while someone is dumping truckloads of cash on them for just sitting still.

ardmacha

Forget this "get people spending again". We have just gone through the largest spending spree in the history of the state, and are now left with massive debts

well you could encourage the people who don't have personal debt to spend.

irishh_bob

ardmacha wrote: »

Do you suppose that there are more people in the Irish public sector than in Denmark, in the virtuous circle above? The Danish parliament has 179 seats, so not vastly different from here. Ireland has a public finance problem because much of the private sector was engaged in a giant pyramid scheme, not because of the size of the public service.

it was the revenue generated by this pyramid scheme ( and nothing else ) which allowed staff numbers and pay rates in the public sector to reach the level they did

ardmacha

it was the revenue generated by this pyramid scheme ( and nothing else ) which allowed staff numbers and pay rates in the public sector to reach the level they did

The Irish public sector has not had large numbers in many sectors at any time, for instance class size never fell below that in other countries. The boom drove up prices and wages for everyone, the public sector included. However there was real growth in there too, the puff element in the pay has now been removed in the public sector, but not in all of the private sector.

ei.sdraob

ardmacha wrote: »

The Irish public sector has not had large numbers in many sectors at any time, for instance class size never fell below that in other countries. The boom drove up prices and wages for everyone, the public sector included. However there was real growth in there too, the puff element in the pay has now been removed in the public sector, but not in all of the private sector.

is there anything to back up so many statements of yours?

ardmacha

s there anything to back up so many statements of yours?

I didn't realise backup was required, ill informed prejudice seems more common here.

As to the overall I quote the OECD "In comparison with other OECD countries, Ireland thus has been able to deliver public services with a public sector that is relatively small given the size of its economy and labour force".

As for the class size

ei.sdraob

im refering to the

ardmacha wrote:

the puff element in the pay has now been removed in the public sector, but not in all of the private sector

tho its interesting to note that we are behind OECD and EU averages and countries like Mexico and USA for primary school class sizes, speaks volumes ...

ardmacha

the puff element in the pay has now been removed in the public sector, but not in all of the private sector

Pay has been reduced in the public sector by something like 13-15%. The unsustainable boom was perhaps 4 years 2004-2007 when 2-3% were added on to pay that was unjustified. This has now been removed.

While some parts of the private sector have had big cuts, others have had none.

Head The Wall

Amhran Nua wrote: »

As I mentioned, private sector wages should be maintained as much as possible.

You are quite right, but I think we might be talking at cross purposes here - I'm referring to private sector wages when I say they should not be reduced, which is to say not borrowed money.

You only want private sector wages not to be reduced so you can use it to fight for the PS not getting cut. Next thing you'll be telling us your are going striking on our behalf as well. Oh I've already heard that

ardmacha wrote: »

well you could encourage the people who don't have personal debt to spend.

Yes , the PS are the ones paid 25% above the private sector, only contribute a fraction to their pension and won't get fired. They should be out spending and saving the economy. Get your union on to it

ardmacha wrote: »

Pay has been reduced in the public sector by something like 13-15%. The unsustainable boom was perhaps 4 years 2004-2007 when 2-3% were added on to pay that was unjustified. This has now been removed.

Those are great figures, PS pay was less than private sector and it's now more than 25% above pay. Here you are going on about a 2-3% increase.

Does not compute