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A legacy of FF? January 24, 2013

Posted by WorldbyStorm in Economy, Irish Politics.
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Quite a clever line from Leo Varadkar when talking about Croke Park as being a ‘legacy of the FF-led government’. It allows for the potential to change the agreement as well as distancing Fine Gael from it and implicitly pushing Labour towards ‘ownership’ of it under the current government. That said one wonders how much utility there is in it. I’m always fascinated by the lack of quantification of the supposed positive outcomes from reneging on the CPA. But the problem is that any monies saved – as is pushed by the Fiscal Advisory Council – would go into paying off the deficit rather than to support social provision.

But as interesting is the thought that if it is done away with and the situation is still there or thereabouts in its wake what cover then will the government (and others) have to hide? It’s that that makes me wonder if it will be seriously reshaped, at least this side of a general election.

And Niamh Connolly in the SBP refers to this when she suggest that:

So far, there has been plenty of sabre rattling on what is on or off the table, with trade union leaders particularly incensed by the proposal for compulsory redundancies in some circumstances. But the reality that this administration will have to take full ownership of whatever emerges in the shape of a revised Croke Park deal is also hitting home for government TDs.

It has been highly expedient to have the CPA as a goad and a prod, and particularly so given that it was shaped by the former administration. It’s interesting that that point about the Fiscal Advisory Council comes starkly into focus in the following:

The continued payment of increments – to people at all levels – is likely to be one of the crunch issues, and has allowed many employees to claw back pay cuts. A bankrupt employer can hardly afford pay increases, yet that is precisely what the state has been doing throughout the economic crisis, according to Stephen Donnelly, the independent TD for Wicklow.
Donnelly has calculated that €690 million has been awarded in pay hikes via increments since the start of the Croke Park deal in 2010. “The argument about incremental rises applying mainly to the low-paid is misleading by the unions, as loads are going to middle and higher grades,” he said.

Tellingly…

…he agreed that not paying increments could take cash out of the economy, Donnelly said that the money could also be diverted to creating thousands of graduate jobs in key areas of need in the public sector.

The key line in the above is ‘money could also be…’. Let’s be honest. It won’t be – not in the context of the Fiscal Advisory Council’s precepts, and that will be cash taken out of the economy. Indeed the whole thrust of the debate is precisely about ‘saving money’, and this is hardly a secret. Which leaves us where exactly?

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1. LeftAtTheCross - January 24, 2013

The drive to dispense with Croke Park is not about saving money, it is about pursuing a policy of internal devaluation in the economy through the suppression of workers’ wages and terms & conditions of employment. Once the public sector ‘flexibility’ issue is solved to the satisfaction of corporate interests then IBEC/ISME/SFA will be hot on their heels in the private sector. There’s also the drive to shrink the public sector to open up profit opportunities through privatisation. Any actual budget savings accrued through this process will just be icing on the cake.

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CMK - January 24, 2013

One of the ironies of whole thing, though, is that some of the keys areas under attack are those where PS employees actually enjoy flexibility and autonomy (not many, but some). The government actually want to re-introduce rigidity and lessen flexibility all in the name of ‘flexibility’. There is also the question of restructuring working arrangements that will hugely complicate the lives of workers in the public sector. It would actually suit the government, the Troika and the other Troika (IBEC/ISME/SFA) if no budget savings accrued from either iteration of Croke Park. As that would give them a weapon they can keep using to get what they really want which is the complete undermining of working conditions in the PS as part of the race to the bottom. Alas, I would bet the trade unions will, with heavy hearts, recommend a ‘Yes’ to whatever comes out of the negotiations.

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Joe - January 24, 2013

+1 on all of that, CMK.

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2. 6to5against - January 24, 2013

Very good point. I thought it odd that flexitime was being attacked in the name of flexibility, and yet the obvious irony was never mentioned on the airwaves.

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WorldbyStorm - January 24, 2013

+1, it’s hard not to conclude it’s simply punitive.

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WorldbyStorm - January 24, 2013

BTW. an entertaining thought experiment is to run it the other way, if there was no flexitime what would be the demand being made of PS workers?

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3. richotto - January 24, 2013

Would it not be a good idea from a socialist point of view to lower the threshold for considering that it could be possible for people to be on undeserved incomes at public expense from 100k to 60k? The 100k limit is obviously only a tokenistic gesture when the average wage is at 35k and median wage much lower than that. Is it not reasonable for citizens to be looking for value for public money under ANY economic system? Resistence to lowering of the definition for high earners who deserve to be scrutinized, from 100k to say 60k would in my opinion have more to do with protecting the professional vested interests than socialist principles.

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smiffy - January 24, 2013

“Scrutinized” against what criteria and by whom?

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Jonathan - January 25, 2013

But how many incomes in the public sector are that high? I came across something quite interesting recently here: http://economic-incentives.blogspot.ie/2011/03/who-pays-income-tax.html

“In 2008 the Revenue Commissioners handled over 2.3 million tax returns. Of these, 432,058 were joint returns by couples with two earners, so the number of earners is actually over 2.7 million. There were 379,541 returns from couples with one earner and 1,521,624 individual tax returns. It is also important to note that this total included all income earners and not just those in employment. The income range with the greatest number of cases is €0–€10,000 which accounts for nearly one-fifth of the total number of cases. This is may include part-time workers but also non-workers with a source of passive income (interest, dividends, rent etc), particularly retired people.”

(% of population) (% of total income)
Less than €20,000: 835,575 (35.9%) (9%)
20,000 to 25,000: 244,090 (9.6%) (5.5%)
25,000 to 30,000: 201,405 (8.6%) (6.1%)
30,000 to 40,000: 315,755 (13.5%) (12%)
40,000 to 50,000: 218,985 (9.4%) (10.8%)
50,000 to 75,000: 288,925 (12.4%) (19.2%)
75,000 to 100,000: 122,760 (5.3%) (11.6%)
100,000 to 150,000: 79,400 (3.4%) (10.4%)
150,000 to 200,000: 21,660 (0.9%) (4.1%)
200,000 to 275,000: 11,695 (0.5%) (3%)
275,000+ (average: 561,285, or 20 times the average): 13,185 (0.6%) (8.1%)

Just over 50% of all Irish people earning income in 2008 were getting less than €30,000 a year, or €575 a week before tax (in a country that by European standards was quite expensive). And it needs to be remembered that some of those in the €50,000 to €100,000 brackets may be joint earners each earning an average of between €25,000 and €50,000, which would change the percentages substantially. By contrast, only 5.4% of earners were getting over €100,000 (or just under €2,000 a week). Of course, it is in this 5.4% that we find those who caused, and profited most, from the property bubble. And in 2008 the combined wealth of the top 10 Irish business people (several of who are tax exiles) was around €13 billion; roughly the same as the annual earnings of the bottom 1,000,000 people…
(Please correct me if I’m wrong here; I’m just an amateur in these things…)

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4. richotto - January 24, 2013

Job evaluation criteria is well established and not rocket science. Its certainly not beyond our means to establish whether in the public interest wages to a certain level far higher than normal would be considered justifiable and fair. Camparissons with the ratios of what different sectors are earning in north Europe for example would be a good starting point for me. If no effort is made to have some objectivity in determining wages then the only alternative is a “might is right” system with manopolists and political fixers determining who gets what resulting in ever increasing inequality over the years.

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smiffy - January 24, 2013

But why focus on the public sector? It’s all very well to say that Irish public servants in certain areas are paid above the equivalent position in another country, but those kinds of comparisons rarely take into account the cost of living in Ireland, nor do they make the same comparison in relation to the private sector.

I don’t want to seem picky, but I find it hard to understand what you mean by “Its certainly not beyond our means to establish whether in the public interest wages to a certain level far higher than normal would be considered justifiable and fair.” That’s completely subjective, depending on what you mean by ‘justifiable’ or ‘normal’. It’s a circular argument.

I’m not, by any means, defending exorbitant wages, nor am I suggesting that the public sector should be above any kind of oversight. But it’s also a basic principle of the left that workers – regardless of what sector they work in – are entitled to fair compensation for their labour. The right-wing media have been relentless in their assault on the public sector, not because they are concerned with ‘equality’ or ‘fairness’, but because the public sector is the last bastion of decent employment conditions in this economy. Undermine that, and everything is up for grabs.

Income inequality is, of course, an issue which vitally needs to be addressed, and should be a priority for any party of the left. But the way to address it is to look at it in the context of the economy as a whole (we know for a fact that the those on the highest pay, over 100,000 to take a figure you mentioned, are disproportionately found in the private sector). Redistribution of wealth through a progressive tax system will do far more to address inequality in society than an approach which bolsters the philosophy of the Sindo et al.

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richotto - January 24, 2013

What workers of all types should be earning in relation to each other is a huge subject and I’m always amazed how much in political discussion we gloss over it, though as individuals we are acutely aware of such differences and how fair and unfair they might be.
I also believe that we should try and make up our own mind as much as possible. Arguments such as this should be considered on their merits regardless of what the Sindo says or whether some one is trying to pigeon hole it as left or right wing like you have to belong to a tribe and take policy down the line.
I happen to believe that if say a power worker gets three or times the average wage mainly because he can switch off the lights and game over thats not the kind outcome we should be supporting. We should be the ones demanding high standards and big gaps in wages over what ordinary workers are getting in both public and private sectors should be held accountable. It should’nt be a case of circle the wagons and let the rich ones hide behind the same the same righteousness as the ones on fairly ordinary money.

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smiffy - January 24, 2013

“I happen to believe that if say a power worker gets three or times the average wage mainly because he can switch off the lights and game over thats not the kind outcome we should be supporting.”

Fair enough. But you could also make the argument that if a power worker is making a relatively high salary because he works in a sector which is heavily unionised, compared to workers in other sectors with minimal unionisation, that’s an argument in favour of unions, rather than against them. Trying to address income inequality by reducing salaries in certain sectors, pitting workers against workers, simply results in a downward spiral of wages and conditions of employment for everyone.

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richotto - January 25, 2013

Theres been no evidence of a relationship of very strong Unions in manopoly sectors and Unions for workers in ordinary situations. The reverse argument could be made. The Union movement aspires to be “,on the side of the angels” trying to bring a bit of dignity and equality to ordinary people. A manoploistic outcome is giving the reverse impression to society and discourages people left and right from seeing Unions from a social justice point of view.
I would see parallels between the elitest craft Unions which Jim Larkin complained about and Unions representing the over 60k public sector workers. After all what did they care when they were getting special increases time after time as the ordinary workers fell further behind?

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smiffy - January 25, 2013

I’m not suggesting that the very fact that unions exist in the public sector means that they will somehow automatically spring up ex nihilo in other areas. What I’m saying is that the fact that strongly unionised workforces have better pay and terms and conditions than in non-unionised areas should be an incentive for greater union membership.

To be honest, and this isn’t intended as an insult, your use of the example of power workers turning off the switch is straight out of the Daily Mail right-wing hymnsheet circa 1979. Do we have to hear about the dead piling up in the streets as well?

As for your Jim Larkin analogy, one of the reasons I think it’s flawed is that Larkin’s approach wasn’t to demand that the members of craft Unions have their wages cut until their pay was the same as casual laborers hanging around the docks for a days work. It was to bring all labourers up to a decent level of pay and security of employment. That’s the difference between a left-wing approach and one based solely on some vague notion of fairness.

Focussing exclusively on public sector workers will do precisely nothing to improve the condition of low-paid workers in the private sector. In fact, it will have the opposite effect, as once the unions are defeated, there’s no real impediment to dismantling the very limited statutory protections there for all workers (except, ironically enough, the obligations imposed by EU membership, one of the reasons the Tories are pushing for renegotiation of the terms of membership). An equality based on all workers scrambling in bins for food isn’t an equality worth having.

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richotto - January 25, 2013

Theres a lot of rhetoric there which was nothing to do with what I was saying above, first invoking the Sindo and now the Mail, disregarding what I said about keeping to the facts or merits of the argument. You seem determined to classify and pigeon hole as a kind of substute for that.
If what you advance is valid then consider the last 40 yrs, until 2008 total union power in sectors like electricity and education. They filled their boots but there was no knock on effect to general society. They simply used their manopoly situation climbed up the social scale much like doctors and other private professionals.

There is no relationship involved with other
trade unionists, even in the public sector.

You keep referring to public sector workers as if they are homogeneous but as I mentioned many times that the ordinary workers in the public sector would not be threatened if only the most highly paid over 60k were to be under scrutiny to see if the public is getting value for money. Why should it be a considered a victory for socialism to see the promotion of the worseing pay inequality that developed over the past 40 yrs?
I do have a position on the other forms of private sector inequality that is not being discussed here but I take the view that two wrongs don’t make a right.

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smiffy - January 25, 2013

“You keep referring to public sector workers as if they are homogeneous but as I mentioned many times that the ordinary workers in the public sector would not be threatened if only the most highly paid over 60k were to be under scrutiny to see if the public is getting value for money. Why should it be a considered a victory for socialism to see the promotion of the worseing pay inequality that developed over the past 40 yrs?”

You really believe that cutting the higher paid in the public service would stop there? The entire argument is a stalking horse for cuts across the board. Even on this thread – first it’s 100,000, then it’s 60,000. Where does it stop? What’s the cut-off for ‘highly-paid’?

In terms of the question of inequality (and let’s always bear in the mind that salary inequality is far more pronounced in the private than public sector), you haven’t – on this thread, at any rate – ever suggested improving the position of those at the bottom. It’s always about cutting those at the top. Which isn’t to say that those at the top are in need of any protection, but it’s a fairly pointless exercise in that the savings incurred are negligible and those struggling with hardship continue to struggle.

As it happens, I think all those working in the public sector – regardless of salary – should be subject to scrutiny to ensure that public funds are well-spent. I just happen to think that that scrutiny should come within a context of a fair and organised system of management, not vague concepts of ‘fairness’.

The reason I took issue with your use of the power workers turning off ‘the switch’ is that precisely the same logic can be used the attack the basic concept of trade unionism, and the underlying strength of organised labour: that the threat of withdrawal of labour can be used to secure improvements in conditions of employment. I’m not what it is you’re actually advocating, in practical terms, unless it’s that workers in certain sectors should forgo the benefits they’ve fought for and achieved until workers in other sectors catch up.

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richotto - January 25, 2013

I think the best way to protect those at the bottom is to take the most morally defensible line. Instead of taking a defence line of “not an inch” in which the public would stand fully behind the govt should industrial action be taken a line could be drawn at the relatively prosperous wage of 60k I suggest. The 100k was mentioned only as that figure was being used by SF and some on the left as the dividing line between the well off and the downtrodden in the public sector. But thats unrealistically high and will hardly result in any of the savings which are neccessary.
I do strongly agree with the need for a good public sector union base to be expanded into the rest of society as far as possible. Howeer the practice in this country where was that unions were not really seen as part of a labour movement and were used by the already well off and professional parts of the public sector to serve only their narrow sectional interest. In Germany and Sweden for example the Union movement in general based on the public sector backbone it had there saw to it that private sector workers were treated to similar terms and conditions, pay increases and employment protection that existed for the public sector. With all the special increases that took place over the years a similar conciousness never existed in our public sector unions and the private sector workers were pretty much thrown to the wolves.

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richotto - January 25, 2013

Sorry, I know I should proof read before I send. Words here and there are out of place.

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WorldbyStorm - January 25, 2013

The problem though is richotto that as smiffy says a) where does one draw a line, b) what is the comparison too given private sector inequities that massively dwarf public sector ones, and I’d add c) what are these savings to be made when the other side ofthe equation is a political unwillingness to increase taxes and d) what is the effect on other private sector workers if wages are brought down in the public sector in the way you suggest.

It is this latter which concerns me most having organised in private sector workplaces and seen the utility of having public sector standards of wages etc as a sort of basic level of provision that has to be matched. I’m all for curbing the excesses of the PS in certain areas but I’d be very cautious of doing that in isolation to the broad private public sectors workforces.

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smiffy - January 25, 2013

On top of that, the idea that you can attack the conditions of those at the upper end of the scale (although what constitutes that upper end appears to be slipping ever faster) in order to protect those at the lower end seems, to me, to be naive. There are virtually no savings to be made at the top of public service pay scales as the numbers involved are minuscule. This focus on the small number of high earners is just the tip of the iceberg in an attack on the conditions of all workers. It’s also naive to think that you’ll ever be able to get broad public support for protecting any public service workers, even if those on the highest pay are cut (or, it should be added, cut further). That game has been played and lost.

Once you accept the basic premise that cuts to the public service are necessary, you’ve already lost half the battle. The focus of the struggle should against the austerity policies themselves. It should involve unions saying ‘Yes, you’re right, we need to cut, but do it to them not to us’.

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5. crocodile - January 24, 2013

As a union activist, I’ve been taking a few soundings in my workplace. Public sector workers are in a tight corner if my colleagues are anything to go by. One of the Sunday papers ran a scare story that the collapse of CPA negotiations would mean a 7% pay cut: ‘better that than more work. We can do no more’ was a common reaction – from people who surely can afford no more loss of income.
And nobody in my office is on increments, meaning that incomes have fallen without relief for many years now. Frankly, what happens to people on 100,000, whatever their sector, is irrelevant to us. The tiny number of public sector employees who earn that much – half of them medical consultants – serve only to provide headlines for a media that would have us believe that they’re typical of the PS.

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smiffy - January 24, 2013

“One of the Sunday papers ran a scare story that the collapse of CPA negotiations would mean a 7% pay cut: ‘better that than more work. We can do no more’ was a common reaction ”

Unfortunately, it doesn’t look like that’s even the choice available. The principle which appears to have been conceded by the Unions is the 1billion cut to the PS pay bill by 2015. The open question is how that’s to be applied: whether it’s cut to basic rates of pay and/or further cuts to numbers, or whether there are other ways of finding it, including through longer hours (and less premium payments, which only applies in some areas of the PS in any case). It’s actual cash savings that are being sought, not nominal productivity increases. So it’s 7% one way or the other.

Should the public sector unions have conceded this basic point to begin with? I’d like to say no, but I wonder what the genuine alternative is. I think the labour movement had effectively been neutralised by the partnership process, and has no clear strategy of how to operate in the absence of that system. But at the same time, I don’t get the sense that there is a willingness among the union membership to take the kind of action (or even be able to contemplate taking) which would be required to effectively oppose the politics of austerity. I do think that, by and large, the union leadership tends to be somewhat to the left of the bulk of the membership, even if there’s a minority of activists further to the left again. It’s too easy to complain about the complacency of the leadership. The challenge for those of us involved in unions is how to radicalise the majority of members in order to make the movement an effective oppositional force. Wish I knew how to do it, though.

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WorldbyStorm - January 24, 2013

+1

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CMK - January 25, 2013

Smiffy, spot on; painfully true. One dimension to the debate is the extent to which the ‘material conditions’ of many in the public sector have markedly deteriorated since the Croke Park I was agreed and implemented. I think the trade union leadership have far less of a handle on their public sector membership and have less of a sense of what might be ‘red lines’. Consequently, these negotiations are fraught with uncertainty. While we’re not Greece I think the trade union leadership and their erstwhile ‘partners’ in government are wary of the fabled ‘riot at the ballot box’ with Croke Park II. Any agreement may well be rejected, despite the hard sell and threats of apocalypse from the union leadership; like with the children’s referendum which was presumed to be a done deal and ended up far closer than anticipated. Rejection of Croke Park II by union members would create a massive crisis for both union leaderships and government. What are they going to negotiate about if they have to go back to the table?

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6. crocodile - January 24, 2013

The thing about ‘nominal productivity increases’ is that they’re imposed anyway, savings or no savings, in the name of spreading the pain equally and appeasing the austerity advocates. Many of the roster changes and limiting of flexitime will save no money, but we have this ridiculous salami slicing that means all areas have to take equal cuts.
A good example is the drumbeat about new contracts for teachers that will insist on a 40-hour in-school week: it wouldn’t save a cent, but it would show that teachers were suffering as much as others – and kill off any residual goodwill that might lead them to, say, take a debating theme in the evenings.

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smiffy - January 24, 2013

Absolutely. Similar to increases in working hours elsewhere, and reductions in flexible arrangements. In many cases, large numbers of people are working above and beyond what they’re contracted to do. However, you insist that people come in at 9:15 (as it was in the pre-flexitime days in the civil service, in any case) you can be damn sure that they’re going to be leave bang on the time that they’re due to go, and won’t be doing any unpaid overtime to cover the workload, as is happening at the moment.

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Ciaran - January 25, 2013

+1 Smiffy

I put a longer version of what you said in an email to my union rep, imploring him and his fellow negotiators not to use flexitime as a bargaining chip, as well as to refute the lies being spun about it by ‘management’ in the lead-up to CP2 negotiations.

The response I received was that it’s a ‘privilege’ and therefore not referrable to the unions. I was also told that there’s nothing they can do about anything put out by the other side.

Ah well, at least there won’t be compulsory redundancies!

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