Friday, June 18, 2010

No smoke without fire

Great jobs apartheid: Public sector staff spend nine fewer years at work over lifetime than private employees AND earn 30% more

OK, it's not related directly to HPC. However, as has been argued before on HPC, the public sector does get a better deal than the private nowadays and although it is a typical Mail article, the facts cannot continue to be denied.

Posted by mr g @ 02:11 PM (2062 views)
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32 thoughts on “No smoke without fire

  • In order to support my argument, I cite the examples of 7 friends / neighbours / acquaintances who are former public sector employees who retired early:

    5 are ex teachers, 2 retired on full pension on health grounds at around 50 years of age, the other 3 all retiring before 60.

    The sixth is an ex council employee at management level who retired at 52 on full pension.

    The seventh is my son’s father in law who is an ex police inspector who retired at 55 on full pension.

    Yes, all these are examples of professional or managerial types and I’m sure someone will tell me how cleaners, road sweepers, etc are badly paid but you can’t get away from the fact that the examples I have quoted have done well for themselves and good luck to them.

    This isn’t sour grapes by the way, as I retired at 60 myself from the private sector.

    What is immoral, hence the use of the word apartheid is fitting, is that:

    1. Private sector employees effectively subsidise public sector pensions out of their earnings.

    2. Public sector unions are already sabre rattling and threatening strike action if any attempt is made to resolve this iniquitous situation.

    I await the tirade of hate comments from the usual suspects.

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  • The secret of success in the civil service (non-military) is to not be sacked.

    Take no risks, keep your head down, blame others and you will be promoted to the top.

    When there, enjoy.

    The taxpayer is so generous, he doesn’t mind.

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  • mr g – Why is it immoral for private sector workers to ‘subsidise’ public sector workers? Assuming people want things like NHS, schools, roads, parks, army, police etc. , we are stuck with having to pay peoples’ wages I’m afraid. How else could we do it? Volunteers?

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  • cyril,

    I’m all in favour of paying their wages. I just don’t see why we should be paying into their pension plans too. My employer isn’t paying into mine – any pension contributions I make are a deduction from my salary.

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  • “Why is it immoral for private sector workers to ‘subsidise’ public sector workers?”
    — I think the point is excessive subsidising. More pay, less work.

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  • The problem lies in the pension system and not inflammatory words like ‘subsidy’.

    As for private sector workers many of my older colleagues are currently over 65 and having to continue working simply because they have been ripped off by former employers and private pension companies over the years and we even have one engineer who is 74.

    Things will change for the public sector even if it just more economically viable pensionable ages; inflamatory language is just a smoke screen for the inevitable!

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  • Once upon a time public sector jobs were low paid but secure for life and non-contributory pension. Private sector jobs were higher paid because you had to perform better compared to the public sector. Broon changed this by employing loads of people in invented jobs in the public sector and part privatising things not only that but pay has increased as well for the public sector. This suited him because it let him pretend that his “Brownism” was working – reducing unemployment. This we can see now was a complete sham and needs to be re-balanced in favour of the private sector, i.e. real jobs need to be created and the public sector needs to shrink.

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  • mark wadsworth says:

    Mr G, agreed. As Cyril’s comment suggests, the gold plated public sector ‘managerial’ types like to use the badly paid roadsweepers etc as cannon fodder in their propaganda war, despite the fact you pointed out that even within the public sector there is apartheid.

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  • Successive Governments (crash Gordon as Chancellor being the main culprit) have destroyed both the confidence in pensions and undermined their ability to function correctly – particularly in the private sector. There now appears to be a campaign (which the public appear to be falling for) to have a level playing field, so instead of building back up what we once had privately we knock down the superannuation schemes etc.. and everything gravitates to the lowest level (which is no retirement provision at all in a lot of cases).

    The situation needs re-balancing not destroyed

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  • the number cruncher says:

    I think its about time the private sector offered its normal workers a proper pension instead of just its senior management. I offer my staff a 9% contribution and ask them to put in 4% which should provide them with a proper pension(same offer I give myself). I also offer 4 times salary death in benefit cover. I think all employers from whichever sector have a duty of care to thier employs and should make such a provision. At the moment much of the private sector are not fulfilling their obligations and as such are receiving an unfair subsidy from the state to provide a safety net.

    The state makes proper provision for its staff and so should the private sector. We should of course penalise people who abuse the system, but not make that and excuse for lowering the proper provision of peoples benefits.

    Mr G – your grapes are indeed very sour. and this article is very suspect – results of a right wing think tank misrepresenting ONS data, mmmm… no vested interests there then to skew the results…

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  • I agree with Cyril – if you want your kids, if you have any, or the future of the country, educated then either you have to pay for it in private education or you have to pay for it via taxation if your kids are state educated. The same with your health and your security, all of which would be significantly more expensive in the private sector, and therefore take a huge lump out of your pay packet. Also don’t public sector workers also pay tax so are in effect helping to pay for themselves. If you want a system where you pay for everything upfront, ie the private sector, then the USA is still the place for you. On second thoughts, if we all had to pay for our kids education, fully (unsubsidised by the tax payer, either private or public), and our health and our personal and national security out of our pocket to private companies, then we would have a lot less to spend on mortgages and therefore house prices would have to come down. There, brought this all back to HPC. Also I am not a fan of Broon’s bloated public sector, just to make unemployment figure look good and guaranteed pensions are a joke, especially when you consider all those who lost money in Equitable Life, after being sucked in with government propoganda.

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  • @Cyril

    I’m in agreement with Drewster. Obviously we have to pay for the services that the public sector provides which includes wages but I draw the line at contributing to pension schemes that allow the examples I have quoted when the majority of the private sector has to currently work until 65 and 67 in the future. Therein lies the immorality of the situation.

    @Enuii My use of the word subsidy is not intended to be inflammatory but a statement of fact, what else is it, if not a subsidy?
    I am well aware that there has been many examples of malpractice by employers and private pension companies but with respect, I feel that this irrelevant in the discussion about public sector pensions as no one, to my knowledge has ever been ripped off in this sector. The only malpractice and rip off is the underwriting of these pensions by private sector employees.

    @MW A good point, there is apartheid within the public sector.

    @Jack C The principle of levelling or dumbing down in anything is anathema to my view. I would be delighted to see private sector pension provision return to it’s former health but there is no excuse for public sector pensions to be maintained as they are on the back of support from private sector workers.

    A number of contributors to HPC complain about or use expressions such as wage or debt slave or neo serfdom. Surely private sector support of public sector pensions is no more than another form of slavery or serfdom?

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  • Major Des Aster. says:

    I know two friends who swapped public sector jobs for private sector jobs and vice versa. The person who went to the public sector from the private sector was constantly told to “speed up you are working too slow” and the other guy (who went private to public) was told to “slow down you are getting too much work done”

    Enough said.

    Except the Ex public guy is safely back in the public sector.

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  • @NC I take issue with you on 2 of your comments but agree with you on another:

    No my grapes aren’t sour. As I said, I retired at 60 and life’s fine thank you.

    This is not aimed at you personally but a general question. Why is it that right of centre views, reports, think tanks, the Daily Mail, Express, Telegraph etc are always at least suspect if not downright wrong, yet left of centre views, think tanks, articles in the Guardian or Independent are gospel truth?

    Where we are in agreement is on the subject of private sector employers making decent contributions to ordinary employees’ pensions and not just to senior management.

    However, with respect, I feel that you are missing the basic point in this argument:

    There is nothing wrong with public sector pensions per se, as long as they are properly funded by the the NHS, council or whichever organisation is the provider, through cost saving efficiency and not “topped up”, supported, call it what you will, by private sector employees through taxation in one form or another.

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  • mr g – as someone who has worked all of my life in the private sector (including self employment) I suspect I have a reasonable understanding of how you arrive at you current view/opinion. I have been advising on pensions (retirement planning as I prefer to call it) spanning 3 decades and as a nation the situation has deteriorated beyond belief – as a consequence I don’t want to see everyone’s pensions destroyed accross the board. Taking one of your points to the extreme it could be argued that the current Tax and NI payers should all stop subsidising the State Retirement Pension which is unfunded ie NI contributions paid now find their way into OAP’s pockets at the post office roughly 3 months after they are collected.

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  • There’s nothing to worry about. The people in the private sector are just jealous that they didn’t have the talent to make in the public sector. It has been pointed out on this blog before that the UK cannot go bankrupt because it controls its own currency and our gilts are AAA rated so we can always finance any temporary financial shortfalls. If you don’t have enough money then you’re obviously not saving enough.

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  • Council employees are required to make contribution to local government superannuation scheme, but they need to pay reduced NI contribution.

    The only difference between public and private sector retirement scheme is benefits on retirement.

    For private sector employees, most of the pension scheme is defined contribution, that means what your contribution (plus investment return) is what you will get on retirement.

    However, public sector employees’ pension scheme is defined benefits where no matter for whatever reason (e.g. bonds or stock market collapse) causing a significant reduction in the pension funds value, the government will make good any deficiency out from the public purse.

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  • @ Jack C

    I don’t see a similarity between the state pension and public sector pensions. The first is calculated on NI contributions which are paid whether you are in employment or not, the second is underwritten by private sector employees who are effectively contributing to 2 pensions simultaneously; their own and someone else’s and if they can’t afford to contribute to their own pension they still have top up the public sector’s. Where’s the fairness in that?

    @QG “The people in the private sector are just jealous that they didn’t have the talent to make in the public sector”

    ROFL!

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  • Daily Mail?

    Report by “Centre-Right think tank Policy Exchange”?

    Utter crap. Not even worth wasting time thinking about.

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  • @Mr G

    I should apologise. My last posting is pretty much the antithesis of my beliefs. I was just curious to see what kind of response I would get.

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  • mr g – personal question – are you in receipt of the state retirement pension?

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  • for the ‘Alf Garnetts’ here,

    repeal the factoy acts, bring back the work houses, abolish the minimum wage, ban trade unions, bring back the twelve hour working day six day week, build bigger prisons, bring back hanging, reintroduce slavery and so on. same old same old.

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  • If private sector pensions are so low even when fat cat bosses are still raking it in why are people calling for public sector pesions to be destroyed as well in the name of fairness? That’s akin to saying that in order to have gender pay equality that men should have their wages dropped to that of women.

    I notice that today the Daily Mail is bemoaning our position in the quality of life league tables and the fact that we work longer for less with higher taxes than other nations. Such opposing messages in the space of two days!

    I wonder how Paul Dacre treats his staff? Silly question really as he abuses them regularly and is well known for it.

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  • @novice pete
    Absolutely.The Alf Garnetts have a real problem with people who are nt able to “compete in the private sector”,particularly the old and children.So its back down the mines for the lazy young loafers and into the workhouse for the idle old people who cheat early death .A good public hanging would n’t go amiss.

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  • @bystander “The same with your health and your security, all of which would be significantly more expensive in the private sector, and therefore take a huge lump out of your pay packet.”

    I disagree, in Switzerland where everyone must have private health cover, it’s a flat rate regardless of any previous conditions, and works out to a lot less than what you would pay in National Insurance, and most critically you actually get a service you pay for, unlike the NHS where so many people die waiting for treatment it’s criminal.. what price do you put on that?

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  • There’s nothing to worry about. The people in the private sector are just jealous that they didn’t have the talent to make in the public sector.
    I think you will find it the other way around.

    It has been pointed out on this blog before that the UK cannot go bankrupt because it controls its own currency and our gilts are AAA rated so we can always finance any temporary financial shortfalls.
    There will be a bond and currency crises, when the world realises what rot sterling is.

    There simply have to be big public sector cuts – UK plc can’t afford it.

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  • mr g

    Take a close look at the facts.

    For instance “teaching professional” (is that a teacher?). Most are employed by the public sector. Private school teachers are not paid less. Those teachers who are belong to that unhappy band of part-time “trainers” employed and exploited by those shoddy training companies.

    Cleaner: hardly surprising they are paid less in the private sector, notorious for exploiting low-paid labour.

    Marketing manager: few if any exist in the public sector.

    One could pick the rest of this rubbish apart quite easily. Look at who produced it: a “centre-right think tank”. Hardly unbiased, as number cruncher notes

    More accurate figures show that public and private sector wages are similar, though the comparison is almost meaningless anyway, taking no account of job type and spread of qualifications, and no account of the dichotomous distribution of private sector incomes (the cluster of poor saps at the bottom of the pile).

    Statistics are completely meaningless unless placed into context and presented and analysed correctly. On early retirements, there was a lot of this a couple of decades ago; the reason was to save money. Pensioning off the higher paid and substituting with cheaper young ones was thought a good idea at the time.

    As for private sector subsidising public – what nonsense! You may as well say that buying something in a shop is subsidising the staff or the company.

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  • @Jack C

    No, I’m not in receipt of the state retirement pension yet but having paid in 44 years NI contributions I’ve every intention of drawing it when I reach 65, which, no doubt, will provoke some bile from certain people.

    @LTF “Statistics are completely meaningless unless placed into context and presented and analysed correctly”

    Unless they are compiled by a left leaning think tank and reported in the Guardian of course.

    “As for private sector subsidising public – what nonsense!”

    If public sector pensions are underfunded who picks up the tab for paying them? Private sector employees of course, purely and simply because more people work in this sector. QED, the private sector subsidises the public.

    If you’re honest, you’ll know full well that this is true and that it is a morally indefensible situation.

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  • You cannot but help show your prejudices mr g. Left or right leaning means in effect that the “think” tank is not actually thinking but looking for ways to reinforce its bias.

    You are happy to collect your pension after paying into it for 44 years, but you do not wish those in similar positions to collect theirs. What makes you so different?

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  • @LTF “You are happy to collect your pension after paying into it for 44 years, but you do not wish those in similar positions to collect theirs.”

    Absolute tosh! I’m not denying anyone their pension.

    Besides, you are confusing state and occupational pensions.

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  • But is not the state pension funded directly from taxation, which is what you object too?

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  • @LTF

    I may be wrong but isn’t it funded through NI contributions?

    If not, it adds weight to my argument about public sector employees, they’re subsidised twice:

    Firstly through their occupational pension and secondly through the state pension!

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