Wednesday 16 October 2019

Jody Corcoran: The public sector is hurting, but the private sector is hurting more

Everybody hurts, but the result of benchmarking is that the pain is relative, writes

Delegates applaud the union leadership at yesterday's INMO conference in Letterkenny, Co. Donegal.
Delegates applaud the union leadership at yesterday's INMO conference in Letterkenny, Co. Donegal.
Jody Corcoran

Jody Corcoran

THE anger was palpable at the annual conference of the Irish Nurses and Midwives Organisation last week. Delegates were "prepared for war", the conference was told. They had given enough and they had no more to give. By and large, I believe them – although everything is relative.

One delegate told of her two children in third-level education. Her financial strain was evident. Like just about everybody in the country, she and others like her are feeling the pain and the pain is real.

It is likely that when this recession, then financial crisis, now social catastrophe was in its infancy six years ago, her children were starting out in secondary school.

Six years ago, mine were in primary school. At the time, I felt the crisis would have passed by the time they went to college. Now I am not so sure. From September, one will enter the Leaving Cert cycle, another enters Junior Cert year and the third begins secondary school.

Last week we were told that 300,000 people have emigrated in the last four years, the majority of them young; 412,000 are registered as unemployed, but the true number out of work, or full-time work, is closer to 25 per cent of the population, the majority long-term.

This weekend, we are just three weeks shy of six months to go before we exit from the Troika bailout regime which has inflicted massive hardship on the vast majority of the people in this country.

There are two headline austerity measures yet to come to pass: the residential property tax and metered water charges, measures which will have a severe impact on everybody, be they in the public or private sectors.

Of course, there are other serious issues still facing the country, not least the level of household debt, mainly mortgage debt, which is crippling all affected not just in economic terms, but at a profound psychological level.

Right now the political classes are tripping over themselves to claim credit for the end of austerity, which is promised within two years, the first step towards which will be our exit from the bailout at the end of the year.

The truth is, there will be low-level jobless growth for several years after we exit the programme. This is not the end, then, but the beginning of the end. Post bailout, we will, at most, have more of a say over our own destiny, which is to be welcomed, if not celebrated.

By then, a decade will be lost. The scars of the devastation across the country will remain, however. More than that, those scars will continue to bleed to an extent. We have all bled, are all still bleeding, public and private sector alike, some more than others in both sectors.

It would be easy for me to again decry workers in the public sector, as I have done in the past, awkwardly on occasion, without due empathy for the nuances of all of our lives.

They are my brother in the defence forces; the much loved mother of my children, a primary school teacher; numerous relations in the health service, and many friends throughout, in the gardai, the emergency services and, indeed, the civil service.

These people are not dysfunctional, as I have clumsily stated in the past. They are good and decent people. It is the system that is dysfunctional, from top to bottom; although, that said, there are some sections of the system which work well too.

Ireland is reasonably well served by its public sector. Broadly speaking, the public administration of this country "remains close to average for the European Union", according to the last research paper of the Institute of Public Administration in November 2012.

The research shows how the Exchequer pay and pensions bill reached a peak of almost €19bn in 2009. From 2008 to 2012, as cutbacks in numbers and pay have taken effect, the Exchequer pay and pensions bill has decreased to almost €17bn.

Numbers employed in the public sector and public service generally are now back to close to 2005 levels. Those cutbacks have had a huge effect throughout the public sector, not alone in terms of pay and pensions, but also in working conditions and morale – not to mention the level of service to society at large, such as services for autistic children, which is something close to my heart.

That said, while the Exchequer bill has continued to decrease, the Exchequer pensions bill has increased, from €1.65bn in 2008 to €2.5bn in 2012.

The huge increase is directly related to the numbers in the public sector who were offered and accepted generous early retirement packages.

No such packages have applied in the private sector, where the scale of wipeout has been massive, where job losses come attached with statutory redundancy, at best. Many have no pension provision either; others will have no entitlement to draw their pensions for many years to come.

Another admission: I earn in excess of €65,000 a year, the point at which most of the "savings" proposed in Croke Park II were to apply. In fact, notwithstanding two pay cuts in recent years, I still earn comfortably in excess of that sum.

There are many in this country, in the private and public sector, in a situation far worse than mine, of which I have become more aware than ever, the longer the screw of austerity has been turned.

That said, the pension into which I have been paying for almost 20 years has been virtually wiped out. Neither do I have a guarantee of a job for life; but when the time comes, in 20 years or so, I am hopeful that conditions will have improved somewhat to allow a relatively comfortable retirement.

There are others, though, in the private sector, such as a man not far from where I sit, who does not have the luxury of 20 years. He is in his 60s. His pension is gone. When he retires, or is forced to retire, he will have nothing but a large mortgage with which to contend.

I recently ran his ballpark figures through a retirement calculation on a public sector website. Admittedly, there are anomalies, but if his public sector equivalent had retired, aged 55, he would have received a lump sum of €200,000 and an annual pension of €60,000 or thereabouts.

Guaranteed. For life.

None of this is to say that they are not bleeding in the public sector, those left behind. It is just that their pain is relative, which is of cold comfort to the majority, admittedly.

In this debate, there is other statistical analysis of which we must be mindful, not least from the Central Statistics Office.

In 2009, the CSO annual National Employment Survey produced a comparison of public versus private sector hourly earnings: the median earnings were 52 per cent higher in the public sector (see accompanying graph).

Again, there are anomalies: experience, education, etc. But how can we explain that, for example, a security man in the public sector in 2008 was paid 46 per cent more than security man in the private sector?

The problem was, and remains, the so-called benchmarking process which gave rise to huge pay increases across the public sector throughout the Celtic Tiger years, mostly paid for by the questionable dividend of a property boom.

On the basis of those increases, many in the public sector, like many in the private sector, participated in the excesses of the age. They felt secure. Now that the tide has gone out, the public sector is as indebted as the private, if still more secure.

Subsequent informed opinion tells us, in fact, that there was no gap emerging between public and private sector wages when the benchmarking process was embarked upon. In anything, there was a gap in favour of the public sector.

It is beyond question that the benchmarking process, as constructed by the public sector itself, was implemented in a fashion bordering on the outrageous.

In short, the process cost the economy more than €1bn every year; but at least it established a principle – public sector pay must mirror the private sector. Unfortunately, that is still not the case.

That is not the case despite the unilateral imposition by the then Government of the pension levy and pay reductions in 2009; it is not the case despite the contribution made to cost savings in the public service pay bill, and to relative productivity improvement, under the terms of the Public Service Agreement 2010-2014 and related agreements.

None of this will be of any comfort to the nurse with two children in third level education, who, like almost everybody else, must also contend with the other ravages of austerity as applied in circumstances beyond her control.

Nor is it of any comfort to, say, my ex-wife, who must also face the prospect of our beloved children emigrating in the next few years, a prospect I felt sure would not exist when this crisis began.

Nor is it of comfort to anybody, really. But it is the reality.

The Troika has informed the Government that it must achieve €300m in "savings" this year, and a further €1bn by 2015 from the public sector pay bill.

Delegates to the INMO say they have no more to give. In many individual circumstances, I am sure that is true, but there are also many who earn more than €65,000 a year who must surely have more to give.

And there are many who earn comfortably in excess of €65,000 who certainly have more to give: those, for example, at senior level who helped construct and greatly benefitted from the benchmarking process; who stood idly by while this country went down the tubes on their watch.

They know who they are. They are not our nurses, our teachers, our gardai, or frontline workers, the emergency services, ambulance drivers and firemen who are now being asked to bear the brunt of the excesses of the age.

Reality exists in the public sector: if just 1,000 more of the 45 per cent of Siptu members who voted on Croke Park II had voted yes, the new pay deal would have passed, without celebration in the private sector, I would imagine.

If that had happened, we would now be a step closer to retrieving our country, a step closer to rebuilding our State, a step closer to, this time, creating a just society where everybody's children are truly equal and nobody's are forced to emigrate.

That's the dream, anyway.

It seems to me that there is no alternative, much and all as we may rail against the dysfunction of a system which has placed citizens here, and throughout most of Europe, in this desperate situation.

At least we still have a vote. Use it wisely next time.

Irish Independent

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