Wage compression as a means of reducing the PS wage bill

Laminations

I'm trying to look for figures of the number of people employed in the PS on the various pay grades. Can't seem to find them, if anyone can direct me towards these figures (up to date figures) I'd appreciate it.

I think a fairer and more acceptable way of reducing pay in the PS is to concentrate on above averge pay. So if you are earning above the averge you take a cut of 20% (see below) on what you earn above that average. This way rankings stay the same but the overall avergae would reduce e.g. you'd still be paid more than the clerical officer but less than the director.

I want to get the figures to try and ascertain what percentage cut would be necessary to achieve a substantial saving (i.e. 1.5-2 billion)

Working (very roughly) on figures from 2009

Total number in PS: 360,000
Wage & pension bill: €20bn

Average pay: €55,000

Now as averages work 180,000 are on above average wage.
Its the average wage of these 180,000 that I really need to get.
Say, for want of the actual figures this average is €85,000

This is 180,000 people earning on average €30,000 above the sectoral average. This is a total of €5.4 billion. If they were to take a pay cut of 20% (only on what they earn above the average) this would cut €1.2 billion off the PS wage bill, without affecting anyone on below average wages.

Consequently the sectoral average of €55,000 would also reduce.
I would love to get my hands on proper figures and apply this pay cutting strategy

ardmacha

Why should a Brain Surgeon with several degrees and 20 years experience in a top centre in the US more deserving of having her wages cut than a clerk who has no interest in education or in anything other than getting home at 5pm? Sometimes people should be paid more. Now you can argue about the amount more, but a mechanistic formula does not establish this.

Laminations

ardmacha wrote: »

Why should a Brain Surgeon with several degrees and 20 years experience in a top centre in the US more deserving of having her wages cut than a clerk who has no interest in education or in anything other than getting home at 5pm? Sometimes people should be paid more. Now you can argue about the amount more, but a mechanistic formula does not establish this.

Because their employer has no money? And cutting at the bottom drives people to strike or onto the dole. And you cant get blood from a stone.... etc.

Those who have more should pay more, and then when the country has the money again they can get paid more again.

Brian Lucey has highlighted this L'Oreal 'because I'm worth it attitude' that exists at the moment. Yes you (as a brain surgeon or a banker) may think you are worth 500k a year but if you are employed by the state and the state is broke, you take a pay cut.

I think this approach would not result in the industrial unrest we are seeing. The Unions could not argue that their members couldn't afford to take these cuts.

Crash

Laminations wrote: »

Now as averages work 180,000 are on above average wage.
Its the average wage of these 180,000 that I really need to get.
Say, for want of the actual figures this average is €85,000

em, no its not? or am I very hungover? Say I have 20 people in my company, 5 of whom are on 50,000, 10 of whom are on 70,000 and 5 of whom are on 100,000

total pay:

250,000 + 700,000 + 500,000

total wage bill of 1,450,000
Average wage: 1,450,000 / 20 = 72,500.

Only 5 people are above the average wage, not half.

ardmacha

Those who have more should pay more, and then when the country has the money again they can get paid more again

Those who have more should pay more tax. Those who work should get the rate for the job, albeit a rate that may have declined in recent time.

Laminations

Crash wrote: »

em, no its not? or am I very hungover? Say I have 20 people in my company, 5 of whom are on 50,000, 10 of whom are on 70,000 and 5 of whom are on 100,000

total pay:

250,000 + 700,000 + 500,000

total wage bill of 1,450,000
Average wage: 1,450,000 / 20 = 72,500.

Only 5 people are above the average wage, not half.

Sorry, yes I know its inaccurate. It was for arguments sake... I did start the thread requesting the proper figures so I can work it out accurately.

Stark

Laminations wrote: »

Brian Lucey has highlighted this L'Oreal 'because I'm worth it attitude' that exists at the moment. Yes you (as a brain surgeon or a banker) may think you are worth 500k a year but if you are employed by the state and the state is broke, you take a pay cut.

Which they did. Consultants took a far greater hit than the paltry 5% taken by "low paid" workers. Many of them are down by nearly 40% when all their cuts are taken into account.

Laminations

So low paid PS workers dont want cuts because they say they cant afford them and high paid workers wont take cuts unless low paid workers get them too??

we are screwed so

ardmacha

This thread is typical of the nonsense associated with PS pay determination. People's perceived needs should not be determining factor, needs are the function of the social welfare system. If GNP is back at the 2005 levels then put peoples pay back to 2005 levels, not this take arbitrary take 10% off one group and take 5% of the other based on some sort of Marxian principle.

Laminations

ardmacha wrote: »

This thread is typical of the nonsense associated with PS pay determination. People's perceived needs should not be determining factor, needs are the function of the social welfare system. If GNP is back at the 2005 levels then put peoples pay back to 2005 levels, not this take arbitrary take 10% off one group and take 5% of the other based on some sort of Marxian principle.

The problem with that is the PS wage bill and the social welfare system all come from the same pot of money which is quite empty at the mo.

Laminations

I just think before people jump down the necks of the low paid civil servants (e.g. at the passport office) who are arguing 'we can't pay', have a look at what happens when money is sought from other sectors, they reply 'we won't pay'

ardmacha

The problem with that is the PS wage bill and the social welfare system all come from the same pot of money which is quite empty at the mo.

The fact that all government money comes from the same pot does not mean that the same criteria are used in its spending. Employment in the PS means that you work and are rewarded for your contribution. The issue here is to make sure that everyone is actually making a contribution. Social welfare means that you have a need which you are unable to fund, the State funds your needs without asking you to make a contribution. The issue here is whether you have a need. Two different things.

The notion that a PS job is primarily means of meeting your needs rather than an exchange of value with you employer is the cause of many of the problems discussed here.

Laminations

ardmacha wrote: »

The fact that all government money comes from the same pot does not mean that the same criteria are used in its spending. Employment in the PS means that you work and are rewarded for your contribution. The issue here is to make sure that everyone is actually making a contribution. Social welfare means that you have a need which you are unable to fund, the State funds your needs without asking you to make a contribution. The issue here is whether you have a need. Two different things.

I'd argue that a low paid worker needs their €25000 total pay more than a high paid worker needs the top €25000 of their pay, they can get by just fine on the other €150000.

Laminations

ardmacha wrote: »

The notion that a PS job is primarily means of meeting your needs rather than an exchange of value with you employer is the cause of many of the problems discussed here.

Every job is a means of meeting your needs. Work is a means to an end, the end being meeting our needs. If your job, public or private didnt meet your needs you wouldn't do that job?

Why did the pension levy plateau for the higher earners? Why were the senior CS cuts reversed? There is no value for money there

meditraitor

15,278 public sector workers earn more than €100,000
http://www.kildarestreet.com/wrans/?id=2009-10-21.751.0

All the figures you need are here,

also have a look at this thread, some info
http://www.boards.ie/vbulletin/showthread.php?t=2055720290&page=3

ardmacha

15,278 public sector workers earned more than €100,000
http://www.kildarestreet.com/wrans/?id=2009-10-21.751.0

Wrong tense there. All of these are 15+% down on 2007 figures.

Inquitus

This won't work because some people are actually worth what they are being paid, if a 20% cut in the portion of a Neurosurgeons wage that is above the average is taken, that could well result in a 15% cut in his Wages. If that then brings his renumeration down below other peer group nations wages he may well emmigrate. This sort of thing cannot be done broad brush as it may well result in driving out some of our best talent in certain PS Areas.

Laminations

I love the way PS wage figures lump all pay above €100k in together, makes it hard to find what pay those 15,000 are on (anywhere from 100-500k?)

Well just working on the figures meditraitor provided (which I know are old and out of date), the wage compression (20%) would have reduced average pay from €38.1k to €35.8k and saved €900million , all without touching the lower paid.

This isn't a 20% cut on earnings. Its on earnings above average wage. So a neurosurgeon on €250k would take a cut of 16% or thereabouts (using the average of €38k in those data). Its still a gradiated pay cut

Japer

ardmacha wrote: »

Why should a Brain Surgeon with several degrees and 20 years experience in a top centre in the US more deserving of having her wages cut than a clerk who has no interest in education or in anything other than getting home at 5pm?

Because the public service brain surgeon ( not that there are many of those ), as well as the consultant in each and every backwater Irish hospital, earns practically the same as Barack Omama, and their employer ( the Irish govt ) cannot afford this carry on any more. Even the consultants six figure public service pensions are an absurdity.

Stark

Laminations wrote:

So a neurosurgeon on €250k would take a cut of 16% or thereabouts (using the average of €38k in those data). Its still a gradiated pay cut

Anyone earning €250k would have taken a 15% cut in the last budget. Most medical consultants would also be losing out on various bonuses meaning they took a further cut. What you're proposing has already happened.

Tbh, if I want my passport form stamped, I don't care who stamps it. If I get a brain tumour, I want the best surgeon that we can reasonably afford.

Laminations

Stark wrote: »

Tbh, if I want my passport form stamped, I don't care who stamps it. If I get a brain tumour, I want the best surgeon that we can reasonably afford.

I'd agree with you there. Frontline staff may not be brain surgeons but they are nurses and junior doctors, firefighters and garda.
There are plenty of people on 200k who push paper, similarly there are people on 20k who push paper. You can use the neurosurgeon to protect the high paid, I can use the nurses to protect the low paid, and we get nowhere.

meditraitor

Stark wrote: »

Anyone earning €250k would have taken a 15% cut in the last budget. Most medical consultants would also be losing out on various bonuses meaning they took a further cut. What you're proposing has already happened.

Tbh, if I want my passport form stamped, I don't care who stamps it. If I get a brain tumour, I want the best surgeon that we can reasonably afford.

Off topic but I want to know how can you be sure your getting the best surgeon? Is there a league table? Does the person who gets paid the most get paid because they are the best or because they have the longest service or best results?

beeno67

Laminations wrote: »

I can use the nurses to protect the low paid, and we get nowhere.

Except average nurse earns 60k. Perhaps better use nurses to protect the higher paid.

beeno67

meditraitor wrote: »

Off topic but I want to know how can you be sure your getting the best surgeon? Is there a league table? Does the person who gets paid the most get paid because they are the best or because they have the longest service or best results?

There is competition for the job and extensive training. So a doctor wanting to be a brain surgeon first has to qualify as a doctor. Then he/she will have to get 10-15 years experience and do numerous other exams. These exams have an 80% failure rate (but can be repeated). After this the doctor will be expected to travel abroad to get experience and usually do a PhD. Obviously many drop out along the way. During this 15 year period they will have changed job on average every year needing a successful reference from one job to carry on to next position.

After this time when a job comes up they will be in competition with others who have been through a similar process.
Most who set out to become neurosurgeons will never become neurosurgeons in Ireland

Laminations

If you say high paid PS/CS workers have already taken a 20% pay cut (which I'll agree with you) then how have more savings not been made?

My calculations, rough as they were and on old figures saved €900million without touching anyone below €38k. Didn't the last budget cut just €1.2billion from the wage bill and that cut across the board?

Stark

Laminations wrote: »

I'd agree with you there. Frontline staff may not be brain surgeons but they are nurses and junior doctors, firefighters and garda.
There are plenty of people on 200k who push paper, similarly there are people on 20k who push paper. You can use the neurosurgeon to protect the high paid, I can use the nurses to protect the low paid, and we get nowhere.

Well you specifically mentioned neurosurgeons as a group that should be cut. If you had actually picked out someone who was doing unimportant work and getting paid too much, I would have been in agreement.

Laminations

Stark wrote: »

Well you specifically mentioned neurosurgeons as a group that should be cut. If you had actually picked out someone who was doing unimportant work and getting paid too much, I would have been in agreement.

Inquitis brought up neurosurgeons, I was replying to that but thats neither here nor there.
I do agree we need to make a distinction at all pay grades between frontline/professional staff and bureaucrats/admin

Laminations

The idea of wage compression is just a fancy name for wage cuts. I just think if it was done this way, rather than have different % decreases for different pay grades, one % for pay above average would be easier to understand and it wouldn't hit low paid workers (The resulting reductions and savings would have been the same). A broadening of the tax net could have then been used to have the lower paid contribute more - if necessary.