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More from the Irish Times editorial… Meanwhile Quentin Fottrell tries light on Saturday’s March but ends up… February 26, 2009

Posted by WorldbyStorm in Economics, Economy, Irish Politics.

I might have mentioned earlier in the week that the Irish Times had modified its stance on matters budgetary, but boy, I had no idea that this would be the start of a continuing series… for its editorial today argues that:

This society enjoyed unprecedented prosperity and growth for close on 20 years. During that time the better-off sections of society benefited most. It is therefore only equitable that those who gained most in the good years should contribute proportionately now.

And it calls on an unlikely example…

That was the approach taken by the Swedish government in the early 1990s when it was confronted by a similar crisis. Nobody liked the harsh measures that were imposed. They were seen to affect high earners and the owners of wealth in a progressive fashion, however, and they were accepted by society as a whole. It took three years to turn the economy around.

Still keen on the old ‘harsh measures’, and you can almost hear the glee in the phrase ‘nobody liked…’. Still what of this?

Some 120,000 public servants protested on the streets of Dublin last Saturday over what they perceived as an unfair pension levy. They were brought there by the Irish Congress of Trade Unions (Ictu) to show what could happen if trade unions were forced to defend the interests of their members by traditional means.

And then emollient words:

Ictu general secretary David Begg is making every effort to prevent the dam bursting. He has offered to negotiate a three-year agreement that would address spending cuts, tax increases and measures to reform the financial and economic systems.

It continues:

The public service pension levy must remain but there is a crying need to demonstrate a fair sharing of the pain.Time is wasting and it is reflecting negatively on the Taoiseach and the Government.

Still, here’s a point we can all agree with:

Tánaiste Mary Coughlan sought to reassure the public yesterday that the public finances are under control. There is a thin line between competency and complacency. And she crossed it. People do not want, and certainly do not deserve, political bromides at this time. They want the truth. They want to be told what it will cost them in levies and taxes to have a realistic economic recovery plan, not a vague framework document that the European Commission criticised.

Although for all those kind words the paper also has a fairly pointless article
by Quentin Fottrell on the march at the weekend. And in his usual flip and almost entirely solipsistic way he decides to criticise rather than critique…

IT WAS an ill-conceived and potentially dangerous misadventure. Normally, when you see 120,000 people swarming into a city centre, stopping traffic, it either means aliens have landed, all hell has broken loose or, more likely, we ordinary folk have got up off our backsides, turned off our high-definition flat-screen televisions, bought americanos-to-go and let our voices be heard.

But to what end? The pension levy/pay cut for public sector workers was a convenient starting point, but there was not one common reason among the crowd last Saturday except unhappiness.

There was a consensus that life isn’t fair, that the vulnerable – old people, young people, working people, unemployed people – shouldn’t have to pay, and that something has got to give . . . just not in our backyard.

Is any of that true? People didn’t have a common reason for being in the crowd? It all devolved to ‘unhappiness’. If so then why bring in the more accurate point of the ‘vulnerable’?

But one suspects Fottrell has rarely seen a march he liked…

Marches usually celebrate the power of the little people standing up against a rusting political machine, just like the march of the elderly last year scared the living daylights out of the Government and shocked it into doing a U-turn on medical cards for the over-70s. Not this one. Behind the placards, there was obviously anger and camaraderie, but there was not a small amount of divilment too.

And so he treats us to…

The Government was right to stand firm on pay cuts for public sector workers, who earn about €10,000 a year on average more than private sector workers.

Before hastily throwing in the latest mantra of ‘reasonableness’…

However, it should have tackled higher earners first. It should spread the tough love around, taking a bigger cut of political salaries, but it would be fatal to miss the bigger picture. Irish Congress of Trade Unions general secretary David Begg was right about one thing: we need to wake up and smell the coffee.

I’d love, as an aside, if he could reference the €10,000 a year figure. Did he go to the ESRI report? He doesn’t say. Doesn he know? I’m dubious. But I’m happy to contest it and say he’s wrong.

He continues:

Call for the heads of senior bankers, who cowardly disappear from public view, refusing to give answers or closure. Cry out for Fianna Fáil to take political responsibility for creating this mess, but be prepared to take personal responsibility and look at the role we played in it too. Look in the reflection of those shop windows on O’Connell Street as you march by and, for once, ask yourself what you see.

Ah yes, I see where this is going…

Did we march against the Government for offering extravagant SSIAs with 25 per cent bonuses . . . in return for votes? No, we didn’t. We marched to our banks, dreaming of new cars and kitchen units. We knew well the difference between MDF and the IMF. The latter is far less attractive. Did we march against round after round of a jammy public sector pay deal, which helped erode our competitiveness? What do you think? Don’t be fooled by Ictu, the pied piper of Liberty Hall. This was not an act of brotherly love to bring public and private sectors together. It was an act of vengeance to fan the flames of fear and fury. Yes, there should be more equitable cuts but, unlike the haemorrhage of jobs in the private sector, not to mention those working part-time to keep small businesses afloat, at least most public sector workers still have their jobs.

Well now. Perhaps Quentin marched to the bank. But then perhaps Quentin might like to consider that who benefitted from SSIA’s were those who put more money in. As a means of assisting small savers the scheme was a joke – for the simple reason that the lower your income the less savings you have.

As for ‘the jammy public sector pay deal’… we have one of the lowest funded public sectors in Europe. The OECD figures are quite clear on that. Throughout the late 1990s while I was in the private sector it was clear that private sector pay rates were in general far ahead of those in the public sector. So much so that there was a bleed of personnel away from that to the private sector. The successive pay deals were in part about evening out that balance and in part about bringing up low wages.

And it’s not jobs at any cost either. Already we’ve seen this state abrogate terms of employment in relation to wages. There are few in the public sector sanguine about what faces them tomorrow or next month or next year as regards their employment security. As with Bryan Dobson one wonders at the logic. Does he expect public sector workers to arrive voluntarily at dole offices in order to sacrifice themselves on the alter of some sort of equitable sharing of ‘pain’?

But for Quentin Saturday amounts to ‘soap box theatrics’, and ‘Fighting words’. He argues without presenting any justification for that argument that when “David Begg said adopting Ictu’s three-year plan would send a “very powerful signal internationally” to say Ireland was dealing with the crisis. No, it would do the exact opposite”.

That’s it. No explanation as to why it would do the opposite. None whatsoever.

And then he continues:

Saturday’s march involved just 5 per cent of the working population, consisting of public sector workers still in employment and many unionised workers from the private sector, some of whom have lost their jobs. With frozen or dwindling salaries, many others in the private sector are also struggling to pay huge mortgages (again, our choice).

For him this ‘choice’ issue is at the heart of his analysis, as if that provides some sort of inverse exculpation… we drank latte’s and therefore we’re all guilty and so must all share the pain. Again, it’s a solipsistic approach. Speak for yourself Quentin. And only for yourself.

So, all that said, what does he approve of?

There was a much smaller crowd gathering on the street this week. On Tuesday, members of the public and the media waited outside Anglo Irish Bank’s headquarters on St Stephen’s Green in Dublin, hoping for a glimpse of gardaí and officers from the Director of Corporate Enforcement hot-footing their way out with boxes of files. That’s the kind of march we need right now, one that might finally encourage us all to pull together.

Is he being entirely serious? That’s his solution? A sort of diffuse rubber-necking? That doesn’t constitute any sort of response to a financial crisis involving our elites. To term it a ‘march’ is an insult to those who do march and a massive, and one suspects entirely deliberate, evasion…

But why should we be surprised? He criticises those who take any sort of oppositional viewpoint, painting them implicitly as wreckers and hypocrites. He eschews references to any supporting material. He elides his perspective with that of others and he retreats into a cosy conservatism that may well give him comfort but is of little use to the rest of us, public and private sector who are being asked to take the pain.

And always with the bloody americanos-to-go. We deserve better. We really do.


1. Mark P - February 26, 2009

The amusing thing here is that the Irish Times clearly has Begg’s number and that of the other top bureaucrats.


2. WorldbyStorm - February 26, 2009

Well, it’s never good when they start flattering you…


3. Mark P - February 26, 2009

It’s not just the flattery. They actually understand that the bureaucrats will do anything they can to “keep the dam from bursting” and that they are hoping desperately for a return to “partnership” on pretty much any terms the government offers.

This feeds back into the other discussion about the CPSU acting alone. Ideally it would be preferable for all of the unions to act together, but you have to remember who and what we are dealing with at the top of most of the unions. The big march, as far as the bureaucrats were concerned, was just about putting pressure on the government to offer them some sort of concession they could sell to the members and get them back to the partnership table. That didn’t work and they are coming under unprecedented pressure from below and so they are balloting for action. But we shouldn’t forget that the bureaucrats will seize on any opportunity to call the whole thing off.

I just find it amusing that the alleged “paper of record” has their number on this and is willing to openly say it.


4. ejh - February 26, 2009

round after round of a jammy public sector pay deal, which helped erode our competitiveness?

Ah, how specifically did it do so?

I mean are there any actual examples of private companies relocating from Ireland because of the costs of the public sector? And why would there be?

It’s a completely random accusation, isn’t it? I mean am I missing something? It really doesn’t seem to make any sense.


5. WorldbyStorm - February 26, 2009

Well you’re absolutely right… it didn’t. But it sounds good.


6. yourcousin - February 26, 2009

I hate to ask stupid a question, but what is an “americanos-to-go”?


7. Montevideo - February 27, 2009

Probably Dell, Intel, etc….:-)


8. CL - February 27, 2009

Public sector ‘ wage cuts would help reinforce the falling benchmark for wages in the private sector. This will help price Irish goods back into world markets and retain multinational investment in the economy.’ John McHale, I.T. 26/1/09

‘If the cut in public sector pay rates mirrored cuts in private sector wage rates there would be a very significant gain in competitiveness, with a consequential big reduction in unemployment after three or four years. The beneficial effects on Government borrowing would eventually also be substantial.’-John Fitzgerald, I.T, 24/1/09

These ideologues see Irish workers as being in one, unsegmented labour market. Which makes the efforts at invidious comparisons between the public and the private sector all the more spurious.

These economists are advocating wage cuts all round to please the ‘international investors’. This is a race-to-the-bottom economic policy. Whether or not Dell’s departure marks the beginning of a trend this policy has serious defects. President Obama has again pledged that U.S. companies who export jobs will not get tax breaks. So Ireland’s low tax regime for MNCs may end.
David Begg has made a major error in agreeing to accept the wage reduction, i.e, the pension levy.
But we’ve still got Paddy Healy and rank-and-file militancy.


9. Garibaldy - February 27, 2009


I presume it is what used to be called a black coffee, with an extra ‘s’ added to americano.


10. yourcousin - February 27, 2009

Well bloody hell?!?! Why don’t they just call it a cup of coffee? As my wife often says, “damn English language”.


11. Wednesday - February 27, 2009

Because in this country it’s not “coffee” unless the taste is totally diluted by milk and sugar.


12. Tim Von Bondie - February 27, 2009

Anyone see angry Irish Times journo Margaret Ward (stop squabbling let all these people with big ideas sort out the problem) and flustered Martin Manseragh on Hearts and Mind last night? The smile on Noel Thompson’s mug as he watched them squabble was priceless…


13. WorldbyStorm - February 27, 2009

Very very rarely drink the stuff to be honest. But I think that the continual dropping of lifestyle elements into the piece from the IT above and others indicates something in the approach.

Didn’t as it happened Tim. It sounds great… in a way. Is it available to watch after the fact like RTÉ material?


14. Hugh Green - February 27, 2009

I wish people so concerned about the erosion of ‘our competitiveness’, would take a look at themselves in those ‘shop windows’ and tell us what they’re doing to improve their competitiveness.


15. Garibaldy - February 27, 2009

slugger has it thanks to Pete Baker, who I think makes all this sort of stuff available via youtube. He does a great service with this sort of stuff.


16. Tim Von Bondie - February 27, 2009

Didn’t like the Times woman at all but Manseragh was a sight; you can tell he’s used to gettting his own way.


17. Garibaldy - February 27, 2009

Just watched the interview at slugger. She was very rude, and wouldn’t let him finish, though he should be better at dealing with that as a now professional politician. Her answer to Mansergh saying you can’t make people feel all the pain at once was why not. Much as it pains me to say it, I thought Mansergh was the more reasonable of the two.


18. RealWorld - February 27, 2009

Davy Stockbrokers on 4Q Unemployment data: The public sector dominated areas of health, education and public admin, still managed to grow by 2.2% yoy in Q4, while private sector employment fell 5.8% yoy.”

Eurostat data shows that in Ireland the average public sector employee earned 46,000 euros in 2004 compared to 36,000 in the private sector. 2004: before that year’s “Sustaining Progress” deal.

ECB President Jean-Claude Trichet in Dublin on Thursday: “Sizable wage increases in the public sector during normal or good times may have provided the wrong signals for wage bargaining in other sectors.”


19. ejh - February 27, 2009

I wonder what M. Trichet is on?


20. barry - February 27, 2009

Two things –

1. Trichet; I’ve commented on The Irish Economy blog to the effect that his was a routine bland, boiler plate phrases, speech, move on, nothing to see here….

2. Sweden; can we stop quoting the Swedish solution, as if it would a) ever be applied and b) work here. As anyone who knows anything about Sweden will tell you there is a sophisitcated socio-democratic political environment there [note socio, not social] We are nowhere near that.


21. The Irish Right and an Economy at War « The Cedar Lounge Revolution - February 27, 2009

[…] 27, 2009 Posted by Garibaldy in Economy, Irish Politics. trackback There has already been some mention here of the remarkable ten minute televisual feast that was Junior Finance Minister Martin Mansergh and […]


22. The Irish Right at War « Garibaldy Blog - February 27, 2009

[…] has already been some mention here of the remarkable ten minute televisual feast that was Junior Finance Minister Martin Mansergh and […]


23. WorldbyStorm - February 27, 2009

RealWorld, those figures are highly contested and contestable, I’d suggest you go to Michael Tafts blog, Notes on the Front to see why.


24. WorldbyStorm - February 27, 2009

Actually, no, let me paraphrase Michael’s argument.

You’re using the same EUROSTAT data as David McWilliams did last December. Problem is that it doesn’t distinguish between all public and private employments in Health or Education. So the categories in the EUROSTAT data under public sector actually contains private sector. This, at the very least, contaminates the datea (and the figures are 50/50 public/private sector workers in Health for supposedly public sector, and 25% private sector workers included in the public sector under Education). It gets better. Under the EUROSTAT figures generally in eurozone countries public sector workers make marginally more than private sector workers (possibly due to higher numbers with higher qualifications working in the former sector, 70% of public sector workers as against 28% of private sector workers) and in all EU countries covered by the EUROSTAT data 11 out of 17 have public sector wages higher than private sector. Averages of course. Averages.

And etc, etc. I hope this is real enough for you.

As for wrong signals, well that’s an imponderable. I’ve mentioned before that I worked almost two decades in the private sector (before working on contract to the public sector, a thankless position I can tell you) and I can’t think of any point where in numerous employments private sector employers of mine (and I hit managerial level) paid a blind bit of notice to the public sector. Why not? Because they don’t, they look at competing companies. Obviously. That’s how commercial enterprises work. They don’t fear the public sector, they fear their competitors poaching staff or whatever. One of the biggest pressures on wages in terms of pushing them upwards? Multinational companies entering the market who competed in similar areas, because they tended to bring higher standards (bar unionisation).

None of this is particularly novel, but I don’t hear it a lot, frankly because I think an awful lot of people opine at length about business culture with frankly remarkably little experience of it. And that’s as true on the right and ‘centre’ as it is on the left. Certain sectors, such as the financial, are so hugely insulated in the main from reality of business that it makes me laugh. Work in an SME , or even slightly larger Irish companies, and you’ll have a radically different experience of life at the hard end.


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