So where's the Public Sector Strike thread at???

The Rookie

bails87 wrote:

okgo wrote:

How does breaking an agreement to give public sector workers a certain level of pension make private sector pensions any better?

The employees are 'breaking' it by living 3 times longer in retirement than was originally the case, private sector pensions that HAVE to pay for themselves have long since recognised this and been forced to change T&C's from a certain point onwards, exactly the same as is happening now for public sector workers whose pension has otherwise to be propped up with even more taxation of private sector workers (So I am now paying more to fund my same 'pension' as I recognise I have to AND paying more in tax to fund someone elses who can't recognise that fact - no thanks!)

My Public sector penion from just 2 years employment on a pro rata basis of money put in is worth about 3 times any of my private sector penions - my wifes likewise, even as a very part time worker the hours are minimal, now public sector salaries have caught up with private sector there is NO excuse for this disparity any more.

Simon

rick_chasey

As an aside of course.

You cut spending, and GDP goes down...

meanredspider

Rick Chasey wrote:

The economics explains why collective bargaining is necessary and mutually beneficial when faced with a monopsonic employer (within reason), but collective bargaining can't work unless the threats get carried out from time to time.

The point is, though, that the government aren't really monopsonic - our system of democracy put them there. We had the opportunity to choose. Then, the individual representatives of the people voted on these changes.

I always thought, whilst watching tv coverage of the Greeks striking over austerity measures, how stupid it was. Did they expect their government to magic money out of thin air? I'm not sure what our public servants expect our government to do either. We have massive debts. Do we have a better wand than the Greeks?

In neither of these threads have I seen from anyone how the government should pay to maintain the levels of public sector pay and pensions. Could someone please explain?

rolf_f

The Beginner wrote:

My Public sector penion from just 2 years employment on a pro rata basis of money put in is worth about 3 times any of my private sector penions - my wifes likewise, even as a very part time worker the hours are minimal, now public sector salaries have caught up with private sector there is NO excuse for this disparity any more.

Public sector salaries haven't caught up with private sector salaries. What has happened is that low paid public sector jobs have been moved to the private sector. That has shifted the average private down and the average public up but it doesn't necessarily mean anyone is actually being paid any differently; it certainly doesn't imply parity.

In my case, I certainly could earn a hell of a lot more in the private sector - but my job would be less interesting so I don't.

rolf_f

meanredspider wrote:

In neither of these threads have I seen from anyone how the government should pay to maintain the levels of public sector pay and pensions. Could someone please explain?

Public sector pension costs are buttons in terms of the overall economy.

notsoblue

okgo wrote:

Rick Chasey wrote:

Depends what you mean by vital and what you consider 'the place' to be.

You could just have the police and army and nothing else and 'run' the place. Can't say that'd be great.

Can't say that the services in this country that we pay well over the odds for are any good though...

I've recycled this from elsewhere, because it is very much true really -

"I want the local council to sweep mud off the roads and gutters, tidy the hedges, suck the drains out and make sure litter is picked up.

I also want the roads resurfaced when they get damaged by frost and I want a good program of improvements designed to aid flow of traffic, I want affordable car parking near to work.

I want the police to operate a visual effective service that actually cuts crime down, I the courts to deal with these people effectivly so punishment is a punishment. I want the prisons to be dry and warm and provide food and training but to be a punishment.

I want public transport to be a viable alternative to cars, not just in London but all over the country, if it is to work it needs to be subsidised and run properly with times and frequency to suit the peak hours.

I want a health service that is efficient and has enough beds, doctors, nurses and surgeons, This service needs to be local, a good full hospital in every major town.

This is just for starters, at the moment we get none of the above yet we are paying for all the above many times over."

Its amazing that everyone thinks the services we have in this country are all great, and nothing needs a shake up!

Honestly, I think we get pretty much all of the above. Only thing I can't speak for is the health service because I don't have to use it very often. And with regards to public transport - barely any of this is considered public sector anyway. When I lived in the country it was private companies providing the bus services, and some of them were only there because they received subsidies...

rick_chasey

meanredspider wrote:

Rick Chasey wrote:

The economics explains why collective bargaining is necessary and mutually beneficial when faced with a monopsonic employer (within reason), but collective bargaining can't work unless the threats get carried out from time to time.

The point is, though, that the government aren't really monopsonic - our system of democracy put them there. We had the opportunity to choose. Then, the individual representatives of the people voted on these changes.

I always thought, whilst watching tv coverage of the Greeks striking over austerity measures, how stupid it was. Did they expect their government to magic money out of thin air? I'm not sure what our public servants expect our government to do either. We have massive debts. Do we have a better wand than the Greeks?

In neither of these threads have I seen from anyone how the government should pay to maintain the levels of public sector pay and pensions. Could someone please explain?

Of course gov'ts are monopsonistic. If I'm a fireman, who else will employ me as a fireman?

From what I've read, the anger is about the agreement they felt they had with the gov't - that they'd take the pay freezes over a prolonged period of time, in return for index linked pensions. So even when growth was strong, they'd still be paid sh!t, but could expect a stronger pension.

They feel the agreement has been broken. They get that there needs to be cuts. Hence they agreed without protest to take long term pay freezes.

And like I said, it's like a kid. You can say "you won't be able to play with your friends if you keep this up", but only unless you actually do that once or twice will they listen.

The aim is to improve their position, since currently, it's pretty weak.

If my boss cuts my pension, I can easily point to the many other firms who have exactly the same role as me with better pensions, and say, pay me or lose me.

Your average road sweeper and nurse can't do that.

jds_1981

bails87 wrote:

How does breaking an agreement to give public sector workers a certain level of pension make private sector pensions any better?

This is the main bit I'm confused about. Are the pension schemes detailed in the contract of employment? If so I don't understand how the government are changing it.

Koncordski

When I see a union leader agree with the basic fact that people now live far longer after retirement than 30yrs ago (thanks in a large part to the NHS to give credit where it's due) and something has to change then I'll have some sympathy. It's little more than an anti-coalition rhetoric filled war which in my opinion will severely harm the unions going forwards and make ordinary hard working public sector workers suffer in the long run through gov't retribution. The union bosses having their little class war will be fine, the ordinary cleaners, nurses, teachers etc will pay the price many times over. Nobody likes changes that adversely affect them but some change is going to have to happen, you can negotiate and soften that change but you can't bury your heads in the sand and stop it completely. The offer on the table is a good starting point and can be improved, but talking will achieve this not striking.

SimonAH

Some fair points Rick, however I have just driven around Cwmbran to run a few errands.

I have seen (what I assume is a protest?) which was four or five crusties getting a brazier going next to the roundabout at the bottom of the industrial estate where I work. Despite going around all of the likely locations, that was it at 12.30.

On the other hand ALL of the feeder roads into the shopping centre carparks and feeder roads are absolutely nose to tail. I have never seen that level of congestion on a weekday in this town.

If you feel strongly enough to withdraw your labour at your mistreatment and feel that the governement is unfairly persecuting you then you vote in a majority to strike, and then you make the greatest impact with that strike by picketing and protesting until you bring the government to it's knees.

Or you could slope off for a spot of Christmas shopping.

Now even allowing that a reasonable percentage of those people jamming into the retail heart of this town are parents forced to take the day off work because their school is shut - I think it is an inescapable fact that the latter of these two options has been taken. Not judging, just stating.

jds_1981

Rick Chasey wrote:

Your average road sweeper and nurse can't do that.

I think there are private companies that will employ road sweepers and nurses?
I suspect there probably aren't many jobs where an equivalent role can't be found in the private sector apart from things like fireman or policeman & I've not read what the government is offering them but they were listed as a special case in the hutton report weren't they?

TheStone

okgo wrote:

Rolf F wrote:

okgo wrote:

I've been seeing some of the figures quoted for pensions and they are quite frankly, ridiculous, and make any private sector schemes look totally shoot in comparison, and lets not forget the amount of companies out there that do not offer contributions at all.

What - like the average public sector pension being £80 per week?

You are right - some of the figures quoted are ridiculous (i.e wrong). Who knows what is right for sure?

I've read of 3.5% employee contribution and 20% employer contribution, that's from a public sector employee.. That seems a tad mad to me.

Still, I'm sure striking will sort it all out.

It's actually more like 33.5% from the employer (obviously not paid now ... paid later by our kids).

Also the £80/week pension excludes any higher end pensions and includes everyone on the lower end, even if they've only worked a week.

rick_chasey

Look Simon,

You have no idea whether they are strikers shopping, whether that's an average day (since you're at work all day any other day), or whether people have taken time off to look after the kids and have gone shopping.

It's a pretty expensive shopping day if you give up a day's pay to go and do it. That could get me a lot of presents.

Plenty of pickets in London apparently.

notsoblue

SimonAH wrote:

Now even allowing that a reasonable percentage of those people jamming into the retail heart of this town are parents forced to take the day off work because their school is shut - I think it is an inescapable fact that the latter of these two options has been taken. Not judging, just stating.

What are you stating exactly? Even if (and thats a big if) all or a large proportion of those people going shopping were strikers, they don't get paid when they're on strike. Its not just a free day's annual leave. How is not being at the picket devaluing their position anyway?

TheStone

Rolf F wrote:

The Beginner wrote:

My Public sector penion from just 2 years employment on a pro rata basis of money put in is worth about 3 times any of my private sector penions - my wifes likewise, even as a very part time worker the hours are minimal, now public sector salaries have caught up with private sector there is NO excuse for this disparity any more.

Public sector salaries haven't caught up with private sector salaries. What has happened is that low paid public sector jobs have been moved to the private sector. That has shifted the average private down and the average public up but it doesn't necessarily mean anyone is actually being paid any differently; it certainly doesn't imply parity.

In my case, I certainly could earn a hell of a lot more in the private sector - but my job would be less interesting so I don't.

They have. There's a few studies out there. Most like for like comparisons put the public sector pay just 8% higher than the private sector. Plus the pension difference.

jds_1981

Rick Chasey wrote:

Plenty of pickets in London apparently.

Saw a couple on my run in at about ten to nine.
One in front of city uni (St John street) - 2 people
One next to Barts hospital - about ten people.

TheStone

jds_1981 wrote:

bails87 wrote:

How does breaking an agreement to give public sector workers a certain level of pension make private sector pensions any better?

This is the main bit I'm confused about. Are the pension schemes detailed in the contract of employment? If so I don't understand how the government are changing it.

I'd be annoyed. I get why they're striking.

However, this happens all the time in the private sector. Promises were made that couldn't be funded. Final salary replaced by money purchase. Now lots of places capping the money purchase at today's wages.

meanredspider

Rick Chasey wrote:

Of course gov'ts are monopsonistic. If I'm a fireman, who else will employ me as a fireman?

From what I've read, the anger is about the agreement they felt they had with the gov't - that they'd take the pay freezes over a prolonged period of time, in return for index linked pensions. So even when growth was strong, they'd still be paid sh!t, but could expect a stronger pension.

They feel the agreement has been broken. They get that there needs to be cuts. Hence they agreed without protest to take long term pay freezes.

And like I said, it's like a kid. You can say "you won't be able to play with your friends if you keep this up", but only unless you actually do that once or twice will they listen.

The aim is to improve their position, since currently, it's pretty weak.

If my boss cuts my pension, I can easily point to the many other firms who have exactly the same role as me with better pensions, and say, pay me or lose me.

Your average road sweeper and nurse can't do that.

Except that governments aren't constant and, in theory at least, they represent the will of the people. It's not the same as being a supplier of car parts tht only, say, Ford buys. If you're a fireman, you can at least hang around until another government comes along after the next election.

Anyhow, I'm not really seeing the difference between what's happening with the public sector and what's happening with my pension (and just about everybody else's in the private sector) - except that it's happening all at once for the public sector. Sure, I could say to my employer, I'm off to company B (and lose the benefits I've accrued with service) but company B is in the same economic boat and, whilst it might have a great pension scheme today, chances are it won't tomorrow.

And, just because you're a road sweeper, that's not to say there's not very similar jobs in the private sector (same for nurses, firemen, teachers, etc)

And I'm still not hearing how we are meant to pay for all of the things that are being demanded...

TheStone

Rolf F wrote:

meanredspider wrote:

In neither of these threads have I seen from anyone how the government should pay to maintain the levels of public sector pay and pensions. Could someone please explain?

Public sector pension costs are buttons in terms of the overall economy.

The NPV of the public sector pensions is around £1.2tr, so not insignificant.

rick_chasey

Re monopsony - I was probably incorrect. The state employs them, not the elected gov't.

The difference is the management and how its run, not the employer.

Your average fireman doesn't get a new contract every time there's an election... Anyway,

How will we pay for it?

Well, economic growth would be a start. Gilt yields are very low at the moment (though I did read the UK's AAA wasn't as safe as perhaps it was a few months ago, but that's mainly down to poor growth), so some strong, well placed stimulus would be well received.

Just cutting and cutting will take even more heat out of the economy.

notsoblue

TheStone wrote:

The NPV of the public sector pensions is around £1.2tr, so not insignificant.

Are public sector pensions a discrete fund grown by contributions and investment or does its funding come also from general taxation?

meanredspider

Rick Chasey wrote:

Well, economic growth would be a start. Gilt yields are very low at the moment (though I did read the UK's AAA wasn't as safe as perhaps it was a few months ago, but that's mainly down to poor growth), so some strong, well placed stimulus would be well received.

Just cutting and cutting will take even more heat out of the economy.

Some of those things Might help but a degree of austerity (especially in the structural deficit) is a must. I'm not sure I'm seeing too many countries spending their way out of this crisis right now

rick_chasey

meanredspider wrote:

Rick Chasey wrote:

Well, economic growth would be a start. Gilt yields are very low at the moment (though I did read the UK's AAA wasn't as safe as perhaps it was a few months ago, but that's mainly down to poor growth), so some strong, well placed stimulus would be well received.

Just cutting and cutting will take even more heat out of the economy.

Some of those things Might help but a degree of austerity (especially in the structural deficit) is a must. I'm not sure I'm seeing too many countries spending their way out of this crisis right now

No, but they didn't in the '30s either and made it plenty worse until finally gov'ts got they Keynesian argument and spent like mad - which sorted it out.

TheStone

notsoblue wrote:

TheStone wrote:

The NPV of the public sector pensions is around £1.2tr, so not insignificant.

Are public sector pensions a discrete fund grown by contributions and investment or does its funding come also from general taxation?

It's a mixture. I believe the £1.2tr quoted is what the funds are currently short to cover the liabilities of all the public sector work that has taken place up to today.

If the public sector was a company that promised final salary pensions they'd need to have 1.2tr more saved up today to cover those liabilities.

At the very least, it should be included as government debt.

meanredspider

Rick Chasey wrote:

meanredspider wrote:

Rick Chasey wrote:

Well, economic growth would be a start. Gilt yields are very low at the moment (though I did read the UK's AAA wasn't as safe as perhaps it was a few months ago, but that's mainly down to poor growth), so some strong, well placed stimulus would be well received.

Just cutting and cutting will take even more heat out of the economy.

Some of those things Might help but a degree of austerity (especially in the structural deficit) is a must. I'm not sure I'm seeing too many countries spending their way out of this crisis right now

No, but they didn't in the '30s either and made it plenty worse until finally gov'ts got they Keynesian argument and spent like mad - which sorted it out.

And I know that there are plans for a fiscal stimulus through some grand public works (Boris's Thames Estuary airport and others). The French are much better at these things (TGV etc) than we are.

rolf_f

notsoblue wrote:

TheStone wrote:

The NPV of the public sector pensions is around £1.2tr, so not insignificant.

Are public sector pensions a discrete fund grown by contributions and investment or does its funding come also from general taxation?

The pensions are self funding. Hence why the £1.2tr isn't relevant. The tax payer (which includes Public sector workers) does fund the employer contributions but it funds the wages as well so treating them as two different things is unhelpful. Probably the bit which is fairest to pick on is where employers have increased contributions to keep he pension funds at the desired level. That effectively becomes a pay rise for publc sector employees that nobody hears about - not even the staff themselves unless they read the small print.

Hence why the costs aren't great and the potential savings to be had effectively minimal.

1) Cutting public sector pensions won't save any money that will make everyones (non public sector obv) lives better in any way.
2) You'd save more money cutting tax relief on private sector pensions
3) people do need to work a bit longer - and paying a bit more might not be a bad idea at least whilst the recession lasts (ie forever)
4) cutting pensions benefits may damage the funds sufficiently to make them less sustainable due to ignorant people chosing to opt out - ultimately you just end up with loads more people needing state support after retirement.

TheStone

Rick Chasey wrote:

No, but they didn't in the '30s either and made it plenty worse until finally gov'ts got they Keynesian argument and spent like mad - which sorted it out.

I don't think it's a clear cut the keynesian stimulus ended the 30s slump.
There are many that would argue the slump ended, because the contraction required had taken place. They'd found the bottom, wiped out the gains from the boom and were ready to reinvest.
... probably somewhere in between.

Paulie W

I work in the public sector but am not currently a member of a Union and have not gone on strike. I recognise, however, that the Unions (and their members) have to resist these reforms - personally I think a strike is step too far at this stage and other approaches could have been explored first - because if they didnt - if they held up their hands and said fine we accept the whole package - then they would be presenting themselves as an easy target for the future when "savings" need to be made. I suspect that the reforms will go through in a form not a million miles away from that currently on the table but that the Unions will ensure that they are hard won.

rick_chasey

There are plans for fiscal stimulus, for sure.

I don't think they're impactive enough to be honest.

With the debt crisis the Keynesian argument had to become a bit more nuanced. It has become a balancing act - keeping the markets at bay and keeping lending cheap with austerity, but at the same time providing stimulus.

Now, currently, Britain was doing OK on the first bit, but the 2nd bit not so. That the UK has a 1/3 chance of receding again (and that's assuming the Eurozone gets sorted out), shows that not enough people are spending. You can't force people to spend, so the only way you can get things going is for the gov't to show the way and spend.

It disappoints me that the left across Europe hasn't been able to articulate this argument.

The 'treat macro economics like micro-money management' argument, whereby the simple "we have a lot of debt, we need to save and pay it off", has really resonated with the public. It has some economic grounding for sure (the Hayek argument), but, without the detailed Hayek bit, isn't applicable to macro economics.

I was taught Keynes first, and it really resonates with me. The logic is sound, the maths makes sense etc etc. Right now, the whole world (bar America..., though they're heading that way) is going Hayek and it's not working.

Ultimately, the solution to it all is strong economic growth. Then we can afford everything again.

There are long-term structural changes that need to be made, but right now we need to get it going however we can before it scars too deeply.

TheStone

Rolf F wrote:

The pensions are self funding. Hence why the £1.2tr isn't relevant.

But the future tax payer is funding this missing £1.2tr. We've had the extra pay and the increased services, but we've not paid the full price for them. Our kids will be paying off the debt and these liabilities so will not be able to enjoy the same level of services (despite paying more for them).

Now, this has always been the case, but before now, public sector wages (and future pensions) were lower and there was a much smaller proportion of people working in the public sector. It was easy to fund from general taxation.