Tuesday 20 August 2019

Brendan O'Connor: Cut public sector wages not staff

The unions must accept spreading the pain so that colleagues can keep jobs, like in private companies, writes Brendan O'Connor

We're a funny crowd really. We have a great capacity for denial. And while the obvious can stare us in the face for ages, it can sometimes take one person to come out and state the obvious before we will actually confront it.

Whatever way you look at the Magda 'scandal', and whatever about mistranslations, the bottom line remains that for a bankrupt country, we offer a fairly good lifestyle to some people from Poland. It's pretty obvious to most Poles. But state that obvious fact here and it's incitement to hatred. But never mind us. Imagine what a very small number of Poles must think: "Those people are bankrupt and want to get their loans forgiven but you can live quite happily there without working. What a strange and wonderful country." Obvious to them, but not so much to us.

If the person who comes out and states the obvious is the right kind of person, one of the worthies, someone who is seen as wise, an official kind of person, then it is even more of a shocker when the obvious gets stated.

And so it is that Patrick Honohan, former academic and Governor of the Central Bank managed to get the obvious on the front page of The Irish Times last week. In fact, last week, Honohan managed to get the blindingly obvious presented as news.

And the news? The news was that if you need to cut back in an organisation, you're better off getting everyone to take a small pay cut rather than getting rid of people. So, for example, if you need to cut your budget by five per cent, you're better off keeping everyone on at 95 per cent of their wages, rather than getting rid of five per cent of the people.

It might sound a bit socialist to you to spread around the pain like that, but it is very common these days. In fact, that very choice -- to spread the pain -- is made in organisations all over the country every week. Boss says, "we can get rid of one of you or you can all stay and you can all take a pay cut". And inevitably people opt for a cut. It has become more or less an annual ritual in companies like this one, where a little bit is shaved off everyone rather than one person having their head shaved off. Given that there aren't many jobs out there, most workers are even more inclined not to want to put colleagues out on the street.

But that is not how it works in the public sector. Public sector unions made an extraordinary decision way back that they would rather there were fewer jobs, as long as everyone who kept their job got to keep their full pay. So when faced with the decision of whether everyone should share the pain in the form of a pay cut, or whether some people should be targeted to lose their jobs, the public sector unions opted for individuality over collectivisation.

Unusual, you might say, for the brethren of the public sector unions to plump for the individual over the collective, while all over the place, out in the big bad capitalist world, people were making more communal decisions. But that's what they did. And indeed it is the central article of faith in their creed, whose Bible is Croke Park. We will sacrifice jobs but not our wages.

And it is perhaps a sign of how mad things are here that it is rarely pointed out what a selfish and strange way this is to behave in Ireland 2012. And then mild-mannered but steely Patrick Honohan, who, remember, has always been his own man, breaks the spell by saying that while we have no choices about the bigger picture of the bailout programme, we have choices as to the specifics of how we achieve the levels of cuts required. And Honohan suggests that the reduction in salary costs in the public sector could actually be achieved not only by reducing numbers but also by adjusting some pay scales.

Stating the obvious, you would have thought. Nothing that hasn't been said before in this newspaper and elsewhere. But you would swear that Honohan had questioned the existence of Santa Claus.

And if you were expecting that it was the public sector unions who would freak out at Honohan's crazy talk, you were wrong. The most violent response to Honohan's heresy actually came from the Minister for Public Expenditure and Reform Brendan Howlin, the very minister responsible for cutting the public sector wage bill, someone who should have welcomed someone as worthy as Honohan speaking some truth, and perhaps giving some cover for a look at the public sector wage guarantee when Croke Park is opened up again in March. But no, Howlin was horrified by Honohan's statement of the obvious, pointing out that cutting the wage bill by cutting wages would be "bulldozing" change.

It is hard to see what is so outrageous and what constitutes bulldozing in asking people to take a pay cut to save some jobs. This is reality. This is what is happening in businesses all over Ireland every day, businesses where people earn on average a third less than they would in the public sector. Yet somehow this reality does not apply to the public sector, despite the fact that we are told every day by the Government that this country is bankrupt.

Indeed, like the Magda story, it is just another example of how we are bankrupt, but how we don't seem to really accept it, or act like it. How many people do you know in bankrupt companies who have their wages guaranteed and who have fine guaranteed pensions? Most of us who work even in profitable companies in the private sector are taking pay cuts on a regular basis and are growing to accept that our pensions are far from guaranteed and will in fact be nothing like what we were promised.

The most interesting word that Honohan used was choice. In life, it is always important to remember that no matter how bad things seem, and no matter how trapped you feel, you nearly always have choices, no matter how limited they may feel. Right now, as a country, we have a choice. We can choose to get real, or we can choose to destroy this country.

So let's say for a moment that we accept the bailout programme and we accept the cuts we have to make. After all, we probably cannot continue to spend way more than we take in. Then, within this paradigm, as Honohan says, we need to realise we have choices.

Howlin and the Government are acting at the moment as if they have no choice but to destroy public services in this country, particularly health and education.

They are so afraid of annoying the public sector unions that they didn't even make the very sane and obvious choice to control who would leave the public sector and when, as we can see from the chaotic and farcical exodus currently under way. You have top men leaving in the morning and pulled back in on sweetheart deals by the afternoon. It's less democracy than adhocracy.

Neither have they had the balls and the reality to say that they would like public services to be maintained at their current levels, but that they would like the people providing these services to do so for slightly less wages, similar to nearly every private sector worker in this country. Instead they have chosen to shed jobs in a country with a chronic unemployment habit.

There are few real losers in this. The ones leaving from the public sector are choosing to do so because it suits them better than staying, and who can blame them? Their colleagues who are left behind will have to pick up the slack and cover for the loss of years of experience, but they will continue to do their best with scarce resources, as frontline people in health and education are used to doing. The Government looks bad because it shows they can't manage the public sector on the most basic level, and that it is, in fact, the unions who manage the country, that the Government is not really in charge so they lose a little bit of face.

But the biggest losers will be the users of health and education services. How we treat our sick is a real barometer of what kind of a country we are. How we educate our children is a real barometer of whether this country has any hope of recovering in the future. And so on we go, choosing to ruin the present and the future of this country. And in denial that we have any other choices.

Sunday Independent

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