Memo to public sector: Get real — or suffer
It is great to see that the spirit of free speech is still alive here and that people are prepared to engage in rational debate without resorting to personal insult. Not.
It worries me that many people are either unaware of the economic and financial morass in which Ireland now finds itself, or are unwilling to admit it. This is dangerous because if individuals and businesses fail to adjust to changed economic circumstances, they may just be storing up much greater problems down the road.
The live register figures for October were truly frightening and what is even more frightening is that the 300,000 mark is likely to be breached over the coming months, and it could go considerably higher from there. To my way of thinking this represents an unemployment crisis that could get a lot worse if we do not tackle it immediately.
For many private sector workers, the choice is now between taking a wage cut or losing their job, and even if wage cuts are taken, there are still no guarantees about job security.
As well as lower wages and intense employment uncertainty, pensions are being decimated and for many the future is looking quite bleak, particularly those who are buried in debt. In contrast, public sector workers have guaranteed employment and guaranteed pensions and are much less exposed to the damaging vagaries of the free market.
The notion that private sector workers should bear the full brunt of the painful economic adjustment that is now taking place strikes me as a bit unfair, but perhaps I do not understand the situation fully.
It is obviously essential for a properly functioning economy to have an effective and efficient public sector. Many people who work within the public sector have said to me (in private) that there is gross inefficiency in many parts.
True or not, it is essential that we ensure that our taxes are being used in the most efficient manner possible.
It is now time to have a full and detailed root-and- branch forensic examination of every euro we spend on the public sector and of every employee working in it to ensure that we, as taxpayers, are getting the best possible value for money.
This should have been a precondition for the first benchmarking award, but it is clear that it was not. That benchmarking award is now costing taxpayers €1.5 billion per year, which would be very handy to have as we go into uncharted waters.
The logic of benchmarking was to bring public sector wage levels up to private sector equivalents. This was more than achieved. Applying this logic to the current environment where private sector wages are falling would suggest that public sector wages should also be adjusting in a downward direction.
However, when one makes such a suggestion, one is immediately subjected to a barrage of personal insult from trade unions and some public sector workers.
It is ironic that if trade unions cared about their private sector members, they should be buying into the logic of my argument.
The Irish economic and fiscal situation is now bad and looks certain to get worse. As a nation we must face into this reality and if adjustments are not made in relation to what we spend on the public sector, it is inevitable that we will see further barmy decisions such as those contained in the recent budget in relation to education and medical cards. We cannot have our cake and eat it.
Jim Power,
chief economist,
Friends First
