Who do you believe: Sunak or the IMF?

Public Sector pay has, over all, fallen considerably in real terms since 2010. Some sections have not done too badly, but, as the charts in this analysis from June 2022 show, most sectors have lost considerably. So this is our starting point.

www.theguardian.com/society/2022/jul/19/how-public-sector-pay-has-fallen-in-real-terms-in-charts


When it comes to comparison with private sector pay it looks as though public sector are doing well, but, as one ONS analysis I found points out, a considerable number of low paid jobs have been transferred from the public to the private sector, so this skews the figures. Over all, public sector pay increases have lagged behind the private sector.

Private sector employees tend not to be unionised, individual employees are not in such a strong position to negotiate pay increases. It would be interesting, though time consuming, to compare how the rates of increases of private sector profits correlate to private sector wage increases. I wouldn't be surprised to find that increases in private sector profits correlate more to increased dividend payments to shareholders and share buybacks than they do to private sector pay increases.

Over all, I doubt that private sector employees are in a position to negotiate your feared inflation busting pay increases, whatever the public sector employees might settle for.

Your figure of 19% increase claims is highly questionable. The only sector I have seen that figure in connection with is nurses. It is set high with a view to negotiating down. That's how negotiating works. Have you never bargained for anything?

As far as I'm aware most of the unions aren't setting such a high initial starting figure. They are asking for inflation, or just below inflation increases. You like googling, though, so perhaps you can prove me wrong on that point!

Wage/price inflationary spirals tend to occur with above inflation settlements.

Printing money to cover this is thought to be inflationary by some economists.

Perhaps these same economists could explain how the some £900billion of Quantitative Easing (in effect, 'money printing') which has been effected by governments since 2008 has not caused inflation, which has been running at about 2% until the supply shocks caused by the invasion of Ukraine?

Perhaps they could also explain how pay increases for public sector staff, such as NHS workers, education staff, civil servants and lawyers could possibly be inflationary since they have no effect at all on prices.

I understand that population is an aging one and that some younger people are not particularly healthy. Even if about half the population is in receipt of various State provisions, and if anything I think they are at a poor level, then the remaining half of the population needs to find ways of financing this.

I would deal with this separately as this post is getting too long.

The idea that people can be divided into givers and takers is nonsense, as is the idea that public services don't provide value and generate wealth. A first world country needs healthy and well-educated people.

Absolutely, ^growstuff* 👏

Growstuff I agree that we need healthy and well educated people but there are some very alarming statistics on excess deaths which my husband is following with almost too much interest. I don’t want to think about it, it’s too depressing.

I certainly don’t think in terms of givers and takers. That’s far too emotional. Just try to visualise a population pyramid on a piece of paper. At the moment, I understand from some commentators that only half the pyramid is able to provide for itself and for the other half.

“Public sector needs to catch up with private”

There are a lot of lower waged workers in the private sector on a “living wage” just like public sector, some are changing jobs to get a bit more.
The advantage with public sector jobs used to be job security and pensions, with privatization that has changed a lot. Even so I doubt that an administrator in the NHS could earn much more in the private sector, not many nurses could earn more changing career, same with doctors. Older workers are retiring early and doing lower paid jobs if they can afford it, those that have not paid off the mortgage are tied to their existing job.

The government are relying on this to keep the system going, despite the strikes where is a train driver going to get better wages?.

ronib

Growstuff I agree that we need healthy and well educated people but there are some very alarming statistics on excess deaths which my husband is following with almost too much interest. I don’t want to think about it, it’s too depressing.

I certainly don’t think in terms of givers and takers. That’s far too emotional. Just try to visualise a population pyramid on a piece of paper. At the moment, I understand from some commentators that only half the pyramid is able to provide for itself and for the other half.

I'm not quite sure of the relevance of excess deaths. However, if they are proving to be an economic problem, the country needs to invest in trying to prevent them. In other words, we need an adequate number of well-trained medical staff.

ronib

Growstuff I agree that we need healthy and well educated people but there are some very alarming statistics on excess deaths which my husband is following with almost too much interest. I don’t want to think about it, it’s too depressing.

I certainly don’t think in terms of givers and takers. That’s far too emotional. Just try to visualise a population pyramid on a piece of paper. At the moment, I understand from some commentators that only half the pyramid is able to provide for itself and for the other half.

And now let's imagine that you're an entrepreneur and want to set up a business in a third world country, where hardly anybody has had any education and there is almost no medical care.

You're going to need workers. They're not going to be much good to you, if they can't understand or write written instructions, can't do basic maths and don't know how to operate a computer - and that's at a very basic level. You're probably going to want people who can understand science and technology to maintain your computers and equipment and even do some R&D.

They won't be much good either, if they keep getting ill and there's no medical care or medications to patch them up and send them back to work.

Education and healthcare are an investment not a cost.

I have no idea who these "commentators" are, but their argument is flawed. Many people on GN are pensioners and don't work. There's an epidemic of pearl clutching when it's suggested that state pensions are a benefit, but that's what they are. People have paid for them during their working lives (although not into individual "pots") and deserve them. Why can't people understand that most people's lives are like that? They pay in when they have fewer needs and receive support when they need it.

I certainly don’t think in terms of givers and takers. That’s far too emotional.

As you then claim that half the population is being supported by the other half of the population it seems that that is exactly what you are thinking.

And I forgot that (as an entrepreneur) you're going to need infrastructure to transport your goods and communicate with people and defend your country and deal with crime and and and ...

MaizieD

^I certainly don’t think in terms of givers and takers. That’s far too emotional.^

As you then claim that half the population is being supported by the other half of the population it seems that that is exactly what you are thinking.

Just pretend you are a Martian and observe.
Forget all the baggage and really look.
Takes some doing and not everyone is up for it.

I havent been foloowing this this morning.

I have a few points but the conversation has moved on.

hyperinflation will definitely not be helped by huge worker pay rises. not that we are likely heading to hyperinflation now thankfully.

cant say i like much the idea, well private salaries have risen so public ones should too. Does the world work like that? not sure.

Would love to know which sector the Phd scientists with salaries over £120k work in.
Certainly not research I would have thought?

I think the current thinking is that printing of money certainly contributes to inflation. But it depends where the money ends up going. If it goes to prop up Banks, it isnt so inflationary?

Of course it’s a major economic problem if 50000 excess deaths are occurring. Don’t assume it’s the pensioners necessarily who are dying!

fancythat

I havent been foloowing this this morning.

I have a few points but the conversation has moved on.

hyperinflation will definitely not be helped by huge worker pay rises. not that we are likely heading to hyperinflation now thankfully.

cant say i like much the idea, well private salaries have risen so public ones should too. Does the world work like that? not sure.

Would love to know which sector the Phd scientists with salaries over £120k work in.
Certainly not research I would have thought?

I think the current thinking is that printing of money certainly contributes to inflation. But it depends where the money ends up going. If it goes to prop up Banks, it isnt so inflationary?

Okay definitely research in microfluidics is attracting major investment at the moment. Definitely state of the art research.
Other very high paying areas - IT and IT security, and yes you do need to keep up with latest developments. Oil industry is paying megabucks but probably not requiring phd.

Also the other point which I can’t understand is that traditionally civil servants, teachers and academics were all grade bands so that each year, salaries rise to the next increment. Usually when you reached the top of the scale, you would apply for promotion to the next band. Has this stopped?

IT security, or It for that matter, you dont always need Phds as far as I am aware.
But I take your point.

fancythat

IT security, or It for that matter, you dont always need Phds as far as I am aware.
But I take your point.

About 30 years ago a certain phd working in IT security sold his company for £16 million. Depends what you want out of life I guess.

ronib

Whitewavemark2 PhD scientists can command salaries in excess of £120k with start ups in the Uk plus share options. I understand how you feel about your son but in fact scientists with entrepreneurial skills can become very wealthy both here and abroad.
There’s no way that the State can compete with these financial opportunities . At the end of the day, it’s a personal choice about the direction of travel.

There’s no way that the State can compete with these financial opportunities.

I really don't understand this thinking. At any other time, those on the far right, opposed, as you seem to be, to a mixed economy, will go to great lengths to tell us the person with the extreme salary, share options, etc., is paid this because they would not get them otherwise.

Obviously, you can keep salaries down by ensuring more people can do the job. This government neither pays those we are short of properly nor sets out to increase those doing the job. That is simply incompetence.

As for not being able to complete, everything a government does is a choice. Of course, they could choose to pay these people properly.

“And now let's imagine that you're an entrepreneur and want to set up a business in a third world country, where hardly anybody has had any education and there is almost no medical care.”

The Third World countries I have been to basic education is fairly good in urban areas.
It would be very difficult for a westerner to set up a business the local corruption would make it impossible, if you had a local politician as a partner it would be easier but don’t trust him.

I am very confused by your comments. You must be aware of the large salaries paid to managers in the NHS, senior civil servants, and a whole host of public sector workers at management level. Paid for by the tax payer.

Who is far right?

In reply to Daisy Anne

Who do you believe: Sunak or the IMF?

Neither.

ronib

I am very confused by your comments. You must be aware of the large salaries paid to managers in the NHS, senior civil servants, and a whole host of public sector workers at management level. Paid for by the tax payer.

Who is far right?

You must also be aware of the extremely high salaries paid to managers and executives in the private sector. Also paid for by 'the taxpayer.'

What is wrong with giving people proper remuneration for doing a high powered and responsible job?

MaizieD I was trying to make sense of Daisy Anne’s comments about how public servants are in short supply and not properly paid. At management level this doesn’t appear to be the case.
In fact the civil service is burgeoning.

I imagine though that PhD researchers, academics etc are in short supply and poorly paid in the public sector . I was just trying to point out that they have opportunities. Good ones with potential life saving products in development and can be very lucrative too.

Please don’t suggest my belief or not in a mixed economy as a result of these statements.

ronib

fancythat

IT security, or It for that matter, you dont always need Phds as far as I am aware.
But I take your point.

About 30 years ago a certain phd working in IT security sold his company for £16 million. Depends what you want out of life I guess.

I was talking in general
And generally they do not have PhDs

Katie59

“And now let's imagine that you're an entrepreneur and want to set up a business in a third world country, where hardly anybody has had any education and there is almost no medical care.”

The Third World countries I have been to basic education is fairly good in urban areas.
It would be very difficult for a westerner to set up a business the local corruption would make it impossible, if you had a local politician as a partner it would be easier but don’t trust him.

I would agree.
Times have moved on in lots of 3rd world countries.
By no means all of them though.

ronib

MaizieD I was trying to make sense of Daisy Anne’s comments about how public servants are in short supply and not properly paid. At management level this doesn’t appear to be the case.
In fact the civil service is burgeoning.

I imagine though that PhD researchers, academics etc are in short supply and poorly paid in the public sector . I was just trying to point out that they have opportunities. Good ones with potential life saving products in development and can be very lucrative too.

Please don’t suggest my belief or not in a mixed economy as a result of these statements.

I would say there is no shortage of PhD researchers and acedemics.
Though pay is on average poor, considering the amount of years studying and work put in.
Either in private or public sector.
I talk generally.
And depends on peoples' definition of poor.
And that is the case in the Uk and republic of Ireland.
Couldnt speak for Europe and elsewhere.

fancythat

Katie59

“And now let's imagine that you're an entrepreneur and want to set up a business in a third world country, where hardly anybody has had any education and there is almost no medical care.”

The Third World countries I have been to basic education is fairly good in urban areas.
It would be very difficult for a westerner to set up a business the local corruption would make it impossible, if you had a local politician as a partner it would be easier but don’t trust him.

I would agree.
Times have moved on in lots of 3rd world countries.
By no means all of them though.

Times have moved on for the worst, governments don’t want western influences and it’s very difficult to get residency permits now in many states, citizen employees only regardless of ability.