Tuesday, March 28, 2006

Those poor public sector workers

Wat Tyler at Burning Our Money has researched exactly how much less public-sector workers get paid than us fat, greedy privateers.
It goes like this. Straight out of college your novice banker can expect a base salary of £35-40 grand. Plus a bonus after 12 months of maybe another £30 grand. Not bad you say.

Not bad, indeed. Why are these people being grossly overpaid?
What's more, once signed they discover they're expected to work 100 hour weeks, chained in semi darkness to the oars of everlasting number-crunching and pitch-books. And they only get the bonus in the unlikely event they're still alive after 12 months (see the hilarious Monkey Business for full details).

So £35,000 pa is £673 pw. On an hourly basis that works out at just £6.73, only just above the minimum wage. Is you heart bleeding?

Not really, but I'm willing to concede that it is not an easy life. After all, I've known too many people who have done it, and some have lasted less than a year; most have transferred to lower paid jobs, that require them to spend less time at the office.

But, how does all this compare to public sector workers?
I thought of this today as I listened to a public sector union chief explaining why today's strike over pension rights was justified. He recognised that most private sector pension schemes don't give nearly such good benefits as those public sector schemes providing index-linked final salary pensions at 60. But he said that was recompense for much lower public sector pay.

Of course, we all know that public sector pay is much lower, don't we?
The facts are different. According to the Office for National Statistics (see here) full-time median gross annual earnings in 2005 were £24,344 in the public sector and only £22,247 in the private- a gap of almost 10%. And in terms of hourly rates, the gap is even bigger, at 25%. That's because full-time public sector workers put in about 3 hours a week less than private sector- 37 rather than 40. And the median public sector rate per hour is £12.48- way more than those knackered investment bankers.

Precisely.

Wat points out the main and intractable problem: no matter what the unions say, we simply cannot afford to support the public sector pension deals. As Wat has blogged before, the scale of the country's debt is scarily massive.
When you tot up the whole lot- on balance sheet and off balance sheet- the real total for government debt comes to £1.3 trillion. Which is about £55,000 per household.

In other words, Gordo has borrowed on your behalf even more than you've managed to borrow for yourself. You thought you owed £50,000 [the average figure for a British household], and it turns out you actually owe more than twice as much.

The public sector pensions hole is calculated at nearly half of that money, at about £690 billion; this is unsustainable. And don't forget, every time that a teacher or nurse gets a payrise, that amount is increased; every police officer or civil servant who retires early, and a massive percentage of them do, pushes that total up by tens of thousands of pounds.

I say again, we simply cannot afford this. Yes, the government will probably shirk their responsibility to the taxpayers—after all, this lot have not done a brave or honest thing in their entire lives—and back down; after all, they did so with the centrally employed civil servants. But that does not alter the fact that, at some point, some government is going to have to bite the bullet and cut the pensions. (And, hopefully, they will also sack hundreds of thousands of utterly unnecessary employees, which will also go towards cutting the deficit.)

There is simply no reason why the average private sector worker should subsidise public sector pensions in this way; they are being massively taxed—and many are on lower salaries then their government employed confreres—in order to fund a retirement, far more plush than they will get, for those lucky enough to be consumers of the wealth that the private sector generates.

UPDATE: This whole argument wouldn't be complete without some bollocks from The Herald editorial (behind a pay-wall tomorrow). In the main, they are pointing out that the strike runs the risk of not currying public favour, by affecting the most vulnerable. However, two particularly egregious sections stand out. The first runs thusly.
If there is to be public antipathy towards, rather than solidarity with, the unions, it will not be because people think poorly-paid workers in the public services do not deserve a decent pension. They do. The unions say the rule of 85 is necessary because it takes account of low pay and a pension scheme inferior to others in the public sector.

Firstly, we have already shown that the low pay excuse is a load of old crap. Secondly, their pension scheme may be inferior to other public sector workers but, frankly, tough; it is considerably better than those in the private sector (£5 billion a year of which has been raided by the Chancellor because, ultimately, he needs to pay for the public-sector pension scheme). To give The Herald its due, it does point out that
But ministers should perhaps have trained their sights first on employees in Whitehall, the NHS, firefighters, the police and teachers who have kept their full benefits (including retiral at 60) and whose pensions are paid from general taxation.

Precisely, but two wrongs do not make a right. Given this situation, they should cut the local workers' pensions and then attack the other public sector workers' pensions too.

The other thing that really pissed me off was this section.
Going after public-service workers with less industrial muscle appears weak and less than fair, especially as three in four in the LGPS are women and nearly two-thirds work part-time.

What the fuck? Are part-time workers more deserving of pensions than full-time workers? And are women more deserving of pensions than men, for some reason? Or is it that we big, strong men should still be protecting the poor, little missies from the big, bad world? Seriously, what is meant by this sentence?

Tossers.

4 comments:

Martin said...

DK,

Bring on the cuts.

Lots and lots of nasty, divisive, criminal justice-social-worker-shrivelling, nurse-impoverishing, asylum-seeker-ejecting, good old fashioned Tory cuts.

What do we want?

CUTS!

When do we want them?

NOW!

What do we want?

CUTS!

When do we want them?

NOW!

Devil's Kitchen said...

Reminds me of the Hom Sap cartoon featuring the march of the liberals...

"What do we want?"

"GRADUAL CHANGE!"

"When do we want it?"

"IN DUE COURSE...!"

DK

John Joseph said...

Public sector workers in the USA suppsosedly 'work' 35 hours a week. But how many of them actually WORK 35 hrs. a week. Or even half that?

Neil Harding said...

Devil, apart from the rant against women (who are sort of forced into part time work by discrimination) I actually agree with you on this. I am taking a lot of stick over on my blog over this issue.

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