September 1, 2014

Public Sector: the insider story

Posted in Sunday Business Post · 69 comments ·

As of this week, both my children are in secondary school. Time flies and in no time they will be finished school. If they were to ask me (which they don’t) what they should do after school, what should I say? If they ask, “Dad, what should I do for a living?” or, “Where should I work?” what would you tell your children?

At some stage, most parents believe that they might be of some help to their kids, at least in terms of guidance. Given that in our house I am generally relegated to some pathetic lowly position somewhere between the village idiot and a human ATM, maybe my guidance phase will never come. But if it does, what will my answer be?

When assessed from the perspective of an adult who realises after a few decades in the real world that life is tricky, insecure and that nothing comes easily, an understandable default position is to consider what job pays best, where hours are tolerable and the pension is decent.

The place in Ireland that comes close to giving workers good pay, job security and a decent pension is the public sector.

Figures published last week reinforce what we have all sensed for years: on average, people in the public sector get much better paid than people in the private sector. The CSO now says that public sector workers earn on average 48 per cent more than those employed in the private sector.

Public servants are paid an average of €919 per week, compared to €622 in the private sector. Just take that in for a second. What justifies this significant disparity?

The people representing the public sector say you shouldn’t compare the two sectors because public sector workers have more degrees, have a higher standard of education and are generally older.

This is hardly a satisfactory answer for the rest of society. It is only a legitimate reason if you accept that this way of rewarding people is legitimate.

If you link pay to levels of education or age or the number of degrees, then of course older people with more degrees will get paid most. But what if such a system of rewards sets up a bizarre incentive system?

What if people are doing extra education courses not for the sake of education, but to “qualify” themselves for pay rises or to climb up the public sector promotion ladder which uses a “degree quota” as a measure of merit?

If this is the case, there will always be more degrees in the public sector. This educational inflation will be particularly attractive if there is generous study leave and courses are paid for by other taxpayers. Sure who wouldn’t do an extra degree? But does having a degree in itself qualify you for higher wages? Why should a public servant who decides to do a degree that only has a tangential impact on their actual job as part of a further education programme, be entitled to more wages?

You tell me.

However, if this reward system becomes embedded, it is easy to justify higher wages because you have the reason and the reason is enough. It also helps that the other institutions that give out the degrees are also public sector outfits. It kind of keeps things in the family.

When we stand back, we see that in a capitalist society the only reason anyone should get higher wages is if the service he/she provides is getting better. If yes, great, but if not, then the organisation can’t justify wage increases.

I am not aware of a massive change in the effectiveness of the Irish public sector or its provision of basic services over the last few years.

What I do know is that the ultimate economic sanction – losing your job – is not something public sector workers experience.

Taking wage cuts is not the same as having no wage at all. Most importantly, public sector workers are promised pensions that private sector workers can only dream of. This is an enormous positive and – when taken together with career breaks, nine to five, overtime and higher weekly wages – it suggests that I would be a fool to advise my kids to do anything but get jobs in the public sector. But we still have no real persuasive reason as to why the public sector workers are better off than private sector workers.

In truth, the real reason the public sector is a much better place to work than the private sector has nothing to do with degrees and the like. It has everything to do with unions.

The job of the trade union is to get the best deal for its members and the Irish public sector trade unions have done an amazing job for their members.

They have protected them from the worst of the recession and engineered safety nets insulating their people from the slump, so much so that the relative pay gap between the public and private sector has risen as the country became progressively poorer.

The public sector workers have a say at the top table. They have a stake in society. For many, on lower pay scales, it mightn’t seem like it, but it is the case. They have someone powerful to speak on their behalf and they have a political system that listens to them. In short, they are insiders, not the most conspicuous insiders and not insiders like their civil servant bosses, but insiders nonetheless.

The society splits in a crisis between insiders and outsiders.

The insiders are those with a stake in the society. They have access to the infrastructure of influence. They have the ability to negotiate. They have bargaining power.

The outsiders are those without such a stake. So when the self-employed electrician’s business goes bang, he can’t even get social welfare because he has no stamps.

He is an outsider, even though he has employed people and paid tax for years. He has no one to speak for him, no voice – however small – at the top table.

When the factory closes, its workers are outsiders. They are on their own.

When a pensioner who has worked in the private sector has her pension eviscerated, as her nest egg blows up in Anglo and AIB shares, she has no comeback. She is an outsider.

When the small business goes bang, its suppliers are shafted, languishing at the bottom of the creditor queue. They are outsiders.

When you talk to your kids, what will you advise them: to be an insider or an outsider?

  1. Kevin Lyda

    I took a 50% pay cut to work in the public sector. My only degree is a Bachelors.

    I do find it odd that using degrees and experience to justify higher pay is somehow a bad thing. If people take the time and effort to become skilled at something and they *are* good at something, then shouldn’t they be paid more?

    The public sector has had loads of lower paid jobs outsourced to the private sector. So obviously the higher paying jobs will drive up the average pay. But job for job, skill level for skill level, the public sector pay is too low for a number of jobs. You can try to hide that by trying to pit the private and public sectors against each other (which has a number of negative consequences for society beyond pay packets), but for those of us who have worked in both the public and private sector we know the real story.

    • Tony

      Kevin, the fact that somebody gets further education doesn’t mean they’re more effective or efficient at their job. It just means that they have learnt something that may or may not be relevant to their work.

      Experience isn’t necessarily worth a damn either. Promoting somebody to a management position because he is good at his job has led to many people struggling in jobs they have no clue about. Effective employees don’t necessarily make good managers. How does that saying go … Something about being promoted to a position of incompetence?

      In a well managed organisation, reward follows effectiveness. You can get all the education you want, but if there’s no increase in productivity, it’s all for nothing. My experience has been that the most effective managers have gone through on the job management training programmes, which can be the toughest and most demoralising jobs on the planet, due to new pressures, different procedures, juggling authority with camaraderie etc. It’s the struggle and challenge of the job that creates the manager/more effective employee. And it’s only then that the reward comes.

      Its interesting that you took a 50% pay cut to become an insider. Sounds about right. Most of us would be of the opinion that PS workers with perks like guaranteed pensions, no problem sabbaticals at partial pay, and 9 to 5 work days with little pressure, deserve to be paid less than people who actually produce and add value in the economy (I exclude teachers, doctors and nurses in that implication … not so sure about cops).

      • Igcuimhne81

        Isnt the irony here that, despite Public Sector workers having gauranteed pensions, employment, and little pressure, roughly 70% of them still pay into a union fund. Why would a Public sector work pay into a union fund if employment and pensions were ‘gauranteed’?
        The flip side of course is the Private sector worker. Only 16% of them pay into a union fund, this despite having to face the cut-throat challenges of the day-to-day ‘real’ economy.
        It would appear that those who work in the private sector have very little sense of solidarity for their fellow worker. A symptom of buying into Thatcherite philosophy.
        Here’s an idea, instead of complaining about Pub Sector workers pay been too high, why not start campaigning against Pri Sector pay being too low?

        • Colin

          The head of siptu, the bearded brother Jack O’Connor advised private sector workers who feel hard done by (in comparison to public sector workers) to join his union so the union could fight on his/her behalf to obtain better pay and conditions. The trouble is, if you work in the non-unionised multi national sector, and you mention the u word to your manager or HR Dept., you will find yourself out on your arse on the street before your next tea break is due.

          Comical Jack

      • Kevin Lyda

        Except the job I had didn’t have any job security, a sabbatical was not an option and a lot of the work I did was R&D for private companies. So there are a number of flawed assumptions there.

    • Danny

      I think you have misunderstood the article Kevin, it does not state that degress or experience are bad things. What it states is that ability and effectiveness should be recognised and rewarded rather than length of tenure or degress in unconnected areas.

      You also state that “job for job, skill level for skill level, the public sector pay is too low for a number of jobs” – can you give some examples of this and please take into account pensions rights, annual leave, sick pay, job security, etc.

      • Kevin Lyda

        Well, my job would be an example. Now to be fair the PS job was in Galway and the private sector one was in Dublin (and I needed to move to Galway for family reasons – I had no real interest in whether the job was private or public). So I’d say about half the pay gap was due to the location. But half was due to the public sector.

        I’d also note that my private sector job provided a better pension, far better benefits and better working conditions across the board.

        The flip side is that this particular public sector employer was the only one here that was going to give me a similar level of a work challenge as my former job. Now that the area I work in is a bit more mature, some private sector employers are willing to give those technologies a go (and I’m now going back to the private sector).

    • DB4545

      David having annoyed the establishment for so long and faced with having to provide financial security for your family maybe you’ve decided to use the public/private debate to become an insider?

    • cianireland

      I studied on my own holiday time and paid full whack top notch money, after tax, for my own education. All done at night… It is unfair to pay 52% tax to cover public sector employees courses and time off to study. Not only am I spending my holidays and cash to do the same and compete with them, I am paying massive taxes to subsidise them AND likely drive up the demand and cost of the courses I have taken… Lose, lose, lose… and despite having a BA, MBS, 4 professional diplomas and a cert I have experienced redundancy and was only able to go back to work having had massive pay cuts… I’m back now. But the advantage conferred to and subsidised by me is unfair… it is good to educate the public sector but there should be a rational limit while at the same time, if private workers subsidise their courses, surely we should receive tax breaks etc… what a crazy scenario…

      • Public1

        I think where this article goes wrong , like so many other Public Vs Private ones is that it ignores the fact that not all Public Sectore workers are equal.
        I work in IT in the “Public Service” I earn approx. 10-20% than my equvalents in the private sector . I took that hit for the holidays and reliable working hours when I had a young family and also originally for the “Pension” that most people of my age (late 30′s) believe will never materialize. I have recently decided that with my kids getting older it is time to move on as I feel the area Im in is in a rut . There is no money for new projects and it has turned into a firefighting exercise with old equipment and hence I am being stifled and learning nothing new.
        I applied for funding to do a relevant Diploma Course in IT and was turned down as there is no training budget. I am paying for this out of my own pocket and studying in my own time . Ive been told can use A/L to take days off for study and will get 2 days paid study leave when my exams come around. When I recieve my qualification it will make no difference to my employer , I wont recieve a wage increase and there has only been 1 promotion in my Dept. in the last 10 years. No-one in my Dept. are Union members , we get paid no overtime and in my Dept. last year there was an average of .7 Uncert. sick day per employee. . Im sure this isnt unique in the Public Sector , but as usual we are treated as one big group in the eyes of the media.

    • cianireland

      I HIGHLY recommend checking out Robert Reich’s book Supercapitalism. Its incredibly interesting on the impact of Unionisation vs the impact of our private pension capital working against us (we the turkeys are voting for Christmas).

      Inequality for All is his documentary, also extremely worth watching.

      Robert Reich is fascinating whether you are left or right leaning… Really really good.

  2. CorkRob

    My 2nd son starts University today, (studying BEES – Biological Earth & Environmental Science) , joining his older brother who is going into 2nd Electrical Engineering.

    Both have no illusions about where their futures lie – Overseas !

    Before they start, they are resigned about having to emigrate to find work in their chosen fields. A friends son qualified with the BEES equivalent degree 3 years ago from UCD , worked for 2 years in Australia and is now starting a Masters in Queens University, but feels that there won’t be any jobs in this area in Ireland for another 10 years.

    At no point have any of these kids considered a Public Service career – hiring bans, overly-political career advancement issues and what they see as boring desk-bound roles have steered them all towards the private sector.

    The government here is still sadly missing it’s core Raison-D’être…. to create decent jobs (Or the environment for those jobs) for Irish citizens. However, it has been caught-up in a blitz of Photo-calls, announcing evermore Call-centre jobs for incoming foreign-nationals with Native level foreign language skills.

    My kids and their friends have no confidence about ever being able to remain in Ireland and make a decent enough wage to buy a house & start a family. They see the Public Service as a closed shop, with militant unions who would impose suffering on them and society at the mere mention of performance evaluation and linked salary reviews.

    Didn’t the previous government negotiate performance-related reviews and attendant salary increases with the Public Service Unions nearly a decade ago ? Why are these agreements NOT being met?

    On the other hand, recent Government initiatives such as Internship etc have “trained” the private sector into refusing to hire anybody for a wage, or at most only paying Minimum Wage and offering 12 month contracts at a stretch.

    The private sector worker has been stripped of his ability to negotiate and secure a decent meaningful job and salary, but as time progresses, this inequity between private & public sector workers will all end in tears as the funding for annual Public Sector salaries disappears.

    • CorkRob

      Sorry about the rambling comment above – early morning scattered thoughts !!

      I suppose what I meant to say is that as a lifelong Private Sector worker who earned very nice salaries, perhaps as I’m now unemployed, I’m a little jealous of the security and rewards enjoyed by my Public Service friends, who I feel never had to take career chances, travel far and long from home (I spent a year travelling around the UK from Monday to Friday for my employer) and who, unlike me, get paid time & a Half for overtime, while I worked around the clock for a flat salary and I never got to finish at 5.30pm each day.

      Stories of time off to cash salary cheques, years after EFT came in doesn’t help.

      The frustration is also due to lack of core focus by the government in developing meaningful core industries and sectors to facilitate returning the 300,000+ IRISH long term unemployed to Full-time permanent jobs on proper wages.

      So I’ll be telling my kids to go – of the 7 of my friends & I who graduated from UCC in ’85, the 4 of us who stayed in Ireland were all unemployed last year , while the 4 who emigrated to the UK, USA & Australia were all in high level directorships earning from €250,000 – Stg£500,000+ a year each. (Private Sector jobs !!!)

  3. tomahawk

    its part of ‘the generation game’ David.
    You’ve now reached the point where the future for your kids career is on the horizon and as with all mammies & daddies down through the generations a safe job in the civil service/bank/army/nurse/guard/teacher looks attractive.
    Your article is a cheap shot at public servants. They had much more attractive pay & work hours during the ‘boom’ but I don’t remember many lauding these career paths.
    Better to go private, make truckloads, loose 10 truckloads, default (this is a good entrepreneurial sign ‘cos the Americans do it) and look around for somebody to blame. Oh look… how come those dull civil servants are making so much money compared to me?
    Ps do all workers on the min wage in the private sector bring down the average?

    • Tony

      You’re way off the mark there. Despite your assertion that few lauded the PS career route, the public service employee numbers across all sectors grew by about 50% between 1999 and 2008. Population increase in the same period was about 15%. Between 2000 and 2004 for small businesses it became so difficult to find decent employees that a friend commented “I can’t even find bad people to hire”. It seems they were all sitting pretty in the public sector.

      As for the “they made a fortune and then went bankrupt” theory … Most people didn’t buy extra houses, didn’t spend fortunes on fancy cars or holidays, yet still suffered immensely compared to PS workers when the bust came. That’s the bust that followed the boom that was, in part, driven by the policies of the same government that padded the public sector.

      • tomahawk

        most people taken on in the PS during the boom were on temp contracts and have been now been let go. I know lots of people who left the PS during the boom for the greener grass on the other side!
        Of course stupid decisions by government were made because we seem to elect people who made/make stupid decisions.
        The average pay in the ESB is €70k…now theres a good career choice.
        PS I’m not a PS

  4. sravrannies

    I worked in the private sector for 30 years and in later years got very well paid but, they did want their pound of flesh!
    Finding myself out of work, I took an 18 month contract with a Public Sector institution – found it quite disturbing that such a dysfunctional organisation can exist. The culture was destructive and the attitude of all workers was all about their own needs than that of the organisation they worked for.
    I then set up my own business where, ironically, I had to deal with several public institutions – with the odd exception, my experience was more of the same. Staff spent most of their time chatting to each other and when a problem arose, they would blame the government for not providing sufficient resources! I have to conclude though that, we can’t blame the workers. They are drawn into a culture where everyone settles at the lowest common denominator in terms of effort, engagement and professionalism. I even believe this affects the quality of their life outside of work and the same ‘entitlement’ attitudes prevail negatively impacting on the general attitudes of the country.How do we change it? I don’t know and Ireland is not the only country with a public sector problem although, there are some countries that we could learn from. Ultimately, it requires leadership from the top but, when our politicians are perceived as having their snouts stuck in the trough, it is impossible. I do despair! The public sector might be a ‘safe-heaven’ but I would not want to end up with the beliefs and attitudes of those I come across in the public sector – the private sector, is more likely to give you a more ‘realistic’ education about life and opportunity to contribute more.

    By the way – I read somewhere that if France, because of the significantly better benefits provided to public sector workers vs their private counterparts, the government ensure that like for like public jobs are paid 20% less. Now, that would be a good place to start?

  5. StephenKenny

    The ferocious defence of the public sector as it is by those within it, is quite understandable, but the question is simple, and the answer is surely, in the Public Sector. There really isn’t much else going on any more.

    The related question that should be more interesting is for how long is it possible to maintain this situation, given that public sector isn’t wealth generating?

    • It is ok Stephen as the government can borrow all the money, it needs to spend, from the central banking system. This adds to the national debt and increases the interest charges on that debt which help the deficit to be larger yet.
      There is no cause and effect here. Inefficient overpaid workers can be indefinitely retained and paid from an inexhaustible source of funding.

      That is until the overloaded bloated system collapses under its own weight dragging everyone else down with it.

      • tomahawk

        “It is ok Stephen as the government can borrow all the money, it needs to spend” to
        allow private companies to choose at the ‘intern’ hiring fair for yellow pack labour.
        allow the private industry to stack pensions with massive tax relief.
        allow multinationals pay nominal tax rates without passing on benefit to employees.
        allow the public private partnerships to facilitate a win/win earner for private operators on toll roads & bridges.
        allow farmers to cream everybody and chain a few tesco trollys while in town for the crack.
        allow the gaelgoers to waste millions because ‘its part of who we are’
        allow nama to exist to benefit all the professionals and nice soft landing for developers.
        allow banks to etc etc.
        allow and facilitate people to default on loans
        Theres lots of targets out there so take your pick.

  6. threetruths

    Lies Damn Lies and Statistics.

    As public sector worker, I feel another media driven campaign coming to drive a wedge between the Private sector and public sector worker.

    Reading this article confirms my suspicion that McWilliams analysis of most things is superficial, ill informed and massively biased to whatever zeitgeist happens to fill the ether on any given day.

    So lets get down to some facts – real facts.

    Yes the public sector does need reforming, yes certain elements of the public sector are massively overpaid and yes there are inefficiencies in the system.

    The same can be said of the private sector- who is gong to reform the legal system, the bankers, – the 5% who control all the power and money in this country. who are they – insiders or outsiders?

    Why are people paying property taxes on homes whilst a site tax was refused. get that – if you own 500 acres of land – no tax – a 3 bed semi – taxed.

    Who are the REITS buying up massive amounts of real estate subsidised by the tax payers of this country – PS workers? – I don’t think so.

    So let me give you a personal view of a PS worker.

    Ok I work in the public sector – lower to middle management – in the technology end.

    My take home pay is approx 600 euro per week.

    I have three third level qualifications and many professional certifications and 18 years experience both private and public.
    My job entails a large degree of responsibility for the efficient running of a wide array of technologies and it certainly is not 9 – 5.
    If I am overpaid by 42% then I calculate that my take home pay should be 348 euro a week.

    My total deductions from my wages amount to approx 1900 euro a month.
    you get that ? – 1900 euro goes directly back to my employer- the Govt.

    I deal with private sector contractors regularly who are similarly qualified to myself. Are you seriously suggesting that they earn 200 euro a week more than unemployment assistance ????????

    I have been approached on occasions to move back to the private sector, but here is the rub – I work in a rural county – bought a home – am in negative equity – basically stuck.

    I’m not complaining – it was my choice – but the very outsiders you seem to admire so much the bankers, the property developers (remember them) the estate agents, etc the agents of free enterprise are the very ones who screwed this country – whilst us public sector works went unheeded.

    Now Mister McWilliams you are a so called economist – are you really telling me that my equivalent in the Private sector is so poorly paid – if so then it is a race to the bottom, and unemployment will definitely be looked at in a new light.

    you talk about us having a stake in society – what utter bullshit!

    you fail to mention that the croke park agreement was superseded by the haddington road agreement even thought the CP agreement had not run its course – strong unions my arse!!

    You fail to mention that certain PS workers under the haddington road agreement had extra hours added to their working week (which is an extra pay cut)

    The mantra I hear all the time is that we are borrowing so many (10,11,12) billions yearly to pay for public sector wages.

    Yet no one mentions the cult of social protection in this country which is costing us 20 billion and upwards a year.
    explain this – we are exporting over 60,000 people a year and net inward migration is running higher than that.

    you talk about when a factory closes – how can you compare a factory closure to a public sector environment – it is an intellectually delinquent statement.

    An yes there are many state mechanisms in place to help where a large employer has left. Enterprise Ireland – IDA etc.

    Articles like this only reinforce the view that PS workers are lazy overpaid and pampered. And I am sure when a public sector worker does decide to rejoin the Private sector ranks he can expect the same prejudice at his interviews that you display here.

    Ironically the very people (consultants, senior civil servants, advisors etc) in the public sector who are overpaid and who do skew the figures are the very people who come from the families of the outsiders.

    Privileged and powerful not because they are public sectors workers or union members – but because of who they know and who their parents are.

    A suggestion- next time you mention the words insiders and outsiders (and yes we all know of your predilection for childish catch phrases probably garnered from watching bruce forsyth on the generation game)ask yourself this – insider groups have policy credibility – a bit like someone who choses to chew garlic with a late finance minister. Now who is the insider and who is the outsider!

    • derry

      It is interesting to get your side of the argument.Do you know anything about how the Private Sector operates.As a Manager in the Private Sector I was expected to achieve annual targets,make a profit ,do 12 stock turns in a year.Control Debtors & collect monies due.Retired now my Pension suffered as alot of others in the Private Sector but that was due to the economic downturn,but The Public Sector Pensions are not exposed to the vagaries of the Money markets & The OECD are wrong in your view.I hope that it does not come to pass that the expenditure on pay & Pensions does not exceed Taxable income ,then you will have a problem.There is a Govt Levy on Private Sector pension funds in case you are not aware.The Truth is often bitter.

      • Kevin Lyda

        You want public sector workers to achieve annual targets and make profits? Really?

        So the police should have a quota system for tickets and arrests? An Garda Síochána should try to make a profit off of fines? Teachers should have quotas on what grades they hand out? School trips should charge parents enough to not only cover costs, but turn a profit for the schools?

        The PS is dysfunctional from my limited time in it and a lot of that dysfunction can be laid at the feet of the people making wooly-headed statements about how they think the public sector should function.

        Do you really want a government that turns a profit? Do you really want a government that views citizens as consumers it hopes to make a quid off of?

        Or instead do you want a gov’t focused on the services people and society need and trying to do that in an efficient manner?

        The private sector needs transport and security and a skilled labour force and consumers with money to spend (aka consumers with jobs). Companies and citizens need some level of assurance that the services they get from the public and private sector are reliable and fit for purpose (aka regulation). They need ways to enforce contracts (courts and lawyers and those who can enforce court orders).

        None of that comes for free. And preferably it shouldn’t really be provided by a profit-seeking enterprise.

    • Yoozername

      A couple of things:
      If you take home 600, and are overpaid by 42%, then your pay “should” be about 422, not 348 as you say, ignoring the different tax rates that may apply. In any case, 919/622 is +48%…

      And, obviously high-demand jobs, such as those in the IT sector command higher wages. David’s point is that the PubSec is overpaid on AVERAGE. This doesn’t mean everyone is overpaid. I thought that was abundantly clear.

  7. [...] “As of this week, both my children are in secondary school. Time flies and in no time they will be finished school. If they were to ask me (which they don’t) what they should do after school, what should I say? If they ask, ‘Dad, what should I do for a living?’ or, ‘Where should I work?’ what would you tell your children? …” (more) [...]

  8. Lee Mersey

    I come from a dynasty of teachers, although I am not one. I have worked in the private sector in a call-centre for a multinational and I am now self-employed.

    I must say, sometimes I do go apoplectic when dealing with the public sector. Family members of mine have told me anecdotes of unprofessional behaviour of colleagues of theirs and it astounds me that people cannot be dismissed after such things. I remember working for the multinational, where if you were unprofessional, you had a certain amount of strikes, and then you were out. I never saw anyone undeservedly fired.

    When I set myself up as self-employed, I went to the Revenue Office and was told “we have no advisory service. Everyone is responsible for their own tax”, which as a layperson is very difficult even for simple issues. I can remember ringing Revenue one day with a question, being transferred six times, and then the line went dead. I realise this is anecdotal, but as someone who has worked in a call centre environment and who is now self-employed, it drives me berserk.

    I think the big problem is that a job in the civil service is a job for life. I think it’s particularly an issue in teaching (my parents, sister and an uncle are teachers so I have an insight here). Now I think that teachers should be paid well as it’s an important profession and you want to attract the right kind of people to it. The problem is that it’s too easy to choose these careers for the wrong reasons. I think if some parts of the public service were subject to the same kind of rigorous scrutiny as private sector workers, then weaker performers could be weeded out. It sounds a bit Darwinian, but I think it works.

  9. Grey Fox

    While I could not be described as a typical PS, having spent the bulk of my life self employed I find myself now working in the PS (don’t get me wrong, thankfully working in the PS), I have however experienced the culture shock of my life in joining, I didn’t believe such insular, selfish, self centered people existed and certainly not in public administration. In my short few years I have witnessed serious addiction, mental illness and bullying on a level I can’t put into words. I have to stay where I am unfortunately for the moment but I am counting the days to when I can run out of here and never look back, in the meantime I do what I can to protect my sanity in a nightmare scenario.

  10. pauloriain

    Maybe they do have more degrees, but the real winner for them is increments, which have nothing to do with how productive or educated they are….. their pay goes up with years served.

    This was highlighted when analysis of the overall public service pay bill showed that while their salaries where cut a while back, only a couple of years later they had gained most of the cut back and worst of all increments were not scrapped, even though the country was still getting money from the troika and still continues to borrow for the current account deficit. The world has become more competitive, but not if you are a public servant.

  11. Adelaide

    I would not dare give career ‘advice’ to youngsters let alone grown adults. I know too many people who have re-trained for new ‘industries’ only to discover the ‘industry’ only exists in the imaginations of mainstream media. Renewable Energies, anyone? They are all now unemployed.

    Too many people are cracking up because of a false dogma.
    Are you an insider or an outsider?
    Forget the system.
    Japanese kids (the few not beaten down by failed capitalism) KNOW they have no future in the system, so they make their own alternative future, their own system, their own communes.

  12. RoddyC

    Well done David – This is the most unintellectual article I’ve read in some time, and believe me that’s quite an achievement in Irish journalism. The dichotomisation you’ve established here is remarkably polemical, but I suppose its perfectly suited to the readership of the Sunday Business Post who like to imagine the private-public divide as something akin to the Germany-Brazil World Cup Semi-Final.

    Public sector = secure, well paid, well pensioned but ineffective.
    Private sector = insecure, underpaid, poorly pensioned but effective.

    Given that each sector is significantly stratified within, with massive disparities between lower and higher positions and their corresponding levels of privilege, your argument is simply an attack on the public sector.

    Public sector – salary based on education and age.
    Private sector – salary based on effectiveness.

    Do better educated and more experienced workers in the private sector not get higher salaries? Perhaps they forgo any salary increases in the interest of effectiveness?

    Public sector – have bargaining stake via unions
    Private sector – have no stake

    Public sector – insiders
    Private sector – outsiders

    What you are really identifying here is that the public sector has internal solidarity when it comes to industrial protest. The private sector has individualised incentives precisely to prevent this, giving its workers as a group far less leverage in disputes. This is the private sectors ‘effectiveness,’ which you seem so keen to defend, in proper operation. If anything this is an argument for unionisation and against ‘effectiveness’. Your factory workers are not outsiders if they are allowed to form unions, but the factory management view such things as barriers to effectiveness.

    By the way, what happens to your factory owner? Is he an insider or an outsider? And his pension? The poor man! If only the public sector had been more effective…

  13. Bunty

    Please, please, please don’t start all this up again – pitting the public against the private sector. We should be working together. Don’t be manipulated by the media and the government – don’t fall for it yet again!

  14. greg

    Although in the public sector myself I think there is a very interesting point in here and it’s this: is the increased level of education in the public sector a reflection of the fact that public servants are doing high level work or is just a reflection of demand? In other words, the public sector recruits people with loads of qualifications not so much because it needs them but because it’s a reasonable sorting method for simplifying the recruitment process. I suspect that for a lot of admin roles, it may be the latter. I don’t have the figures off hand but I’m pretty sure that a large percentage of PhD graduates (and maybe the majority) end up in the public sector in admin roles – presumably because that’s where they want to be! Qualifications are on thing. What you are actually doing is another.

  15. Reality Check

    The Public sector in Ireland is effectively like what Orwell described as the “inner party” – who have a symbiotic relationship with the Government; They get generous pay & cushy terms of employment; the Government get’s a voting block in return

    Seeing as it’s not in the Government’s interest to smash the unions – It’s time for the Private sector to vote independent in all the elections (the more obscure the candidate the better). The more independents that get elected the less power the main parties have and consequently the less power the PS unions will hold over the country.

    Btw, the all too predictable “Rottweiler” response from the PS trolls to any sort of criticism is like expecting to take the indignation of a spoilt, brat, child seriously

  16. Deco

    The public sector is a broad category. There is also a grey, entities that rely on the state for sustenance.

    It includes an enormous amount of wasters who are doing nothing, who are there because of politics. And that often means that they are political party canvassers.

    There is also a useful element in the public sector, who are people do not take political party politics seriously. They have one very important aspect – they are driven by the need to serve.

    The wasters who are members of political parties are not driven by the need to serve, but by laziness, and the fact that they can get away with it.

    We need a REVOLUTION inside the public sector. Kick out the CRC pals, and the Rody Molloy factor.

    By the way somebody stated that Irish people are leaving to get better paying jobs abroad. Indeed they are. And so too are foreigners who come here with degrees to work in the high tech sector. They work here for a few years, and then they get knowledgeable. And then they look at what they pay in income tax, etc.. and they return home.

    Effectively, for many graduates who get jobs in Ireland, Ireland is a temporary location to better things.

    People are opting out of paying for useless parasites in the state quango sector, who are earning far more than nurses, or gardai.

    Ireland badly needs to reform the state. The opportunity briefly presented itself when Ireland reached insolvency. And then the EU stepped in to make sure that the issue would not get corrected, because the semi-government sector is essential to implementing EU power.

  17. Deco

    If you want to see what is wrong with the public sector, look at the Dail.

    How long have they been on their holidays now ? It seems as if they have been doing nothing since the EP/local elections. And back then they were doing stuff that is of little value to the taxpayer, and which is only of benefit to the party machine.

    Party machines are expensive parasites on the rest of the populace. And they incentivize bad behaviour. I do not know how to remedy this. Perhaps by introducing more transparency with respect to political appointments, and enabling the public to have some form of review of public bodies, to decide if they are performing to a satisfactory degree for the rest of the populace.

    And the really insightful thing about all of this is that most public sector front line employees would be in favour of this.

  18. derry

    What David said is correct,but the truth is bitter for alot of people.When the Private sector worker pays the same contributions as the persons in the Public Sector & gets the same pension for the same number of years worked then we will have made a big step in the equality of our citizens.Private sector pensions are invested & may fluctuate with the market.Public Sector Pensions are paid out of current income revenue.The OECD have got it all wrong again.370000 in the Public sector,1.8m in the Private sector.80000 Public sector workers in New Zealand Pop 4.5m .It will be great when we are all the same,but I think Pigs may fly before that will happen

  19. A relative of mine who was in the public sector was earning around €100k, got to retire at 57, would have got a six figure retirement sum and must be on a pension well over the average industrial wage- it’s simply money I’ll probably never see despite having a degree and having to work twice as many hours.
    It’s a flawed system where if you’re on a huge salary, your pension is then half of that huge amount for the rest of your life!(we have failed politicians on around €90k a year pension). The relation flatly refuses to believe that PS workers earn more than private sector workers (he brings up the high paid professionals such as Solicitors etc.)As mentioned by someone else, the average salary in ESB is €70k but I think it actually used to be €82k and the same for Aer Lingus. The whole point the unions were originally set up was to protect workers who were paid poorly and working long hours – now they have become more like a mafia organisation demanding more than they’re entitled to. If I had got a job I applied for the civil service last November, my salary would have increased 53%! but I came 207th place. At least now the government are appearing to be hiring more qualified people now in the civil service but it’s a pity there is no real centrist political party in this country to get the balance right between standing up to the bully trade unions and have equal pay for all according to the amount of effort.

  20. McGoo

    >somewhere between the village idiot and a human ATM

    I bet that got a wry smile from every family man in the country. I would have laughed out loud, except it’s too close to home to be really funny.

    I work in the private sector. My wife works in the public sector. I say, if you can’t beat them, join them. If being unionised has worked for them , let’s all unionise. Private sector incomes are too low relative to the cost of living. Let’s focus on the common problems and enemies, instead of wasting time and energy squabbling amoungst ourselves.

    Like some of the other posters, I have come to the conclusion that the most sensible advise to give our children is to leave. Lack of opportunity here crushes people, and financially the numbers to not add up, on either a micro or macro level, and they never will.

  21. Mike Lucey

    Parents should not worry too much about what their teenage kids think of them. Mark Twain says it well.

    “When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.” ? Mark Twain

    My daughters (now 36 and 34) and I have some very down to earth mutually beneficial discussions on a regular basis. Then again one is in Sydney OZ and the other is in the UK about to immigrate to Auckland NZ with her Kiwi hubby and my newborn grandson.

    I now look at the Kerrygold advert of some years ago with new eyes. I am referring the the one where the old mother comments that Ireland exports its ‘best’. She was seeing off her son, his wife and her grandchild.

    IMO one of our major problem here in Ireland is that the population for the size of the country is far less than what it should be in order to be a viable economy. I imagine we would be looking at a population of possibly 10m+ if we did not suffered colonial domination for so long and the Irish Holocaust otherwise know as The Great Famine had not occurred.

    The quicker Ireland reclaims its possibly largest natural resource, our waters the better. We should really have a vibrate sustainable Fishing Industry that employs over 500,000. The longer we continue to rely on multi-nationals to provide employment the deeper the hole we dig.

    As for the public / civil service goes, surely the bench-marking deal of some years ago should have been agreed to work both ways, up and down! Then again when a country has career politicians that regard themselves as civil servants what could one expect.

  22. In the private sector by and large, the paymaster is the business owner. The employees negotiate as best they can and the market plays a strong supporting role. The public service paymaster is not the owner, nor a stakeholder, in fact it is an employee of the state, another civil servant.
    Even the argument, that Independant bodies are employed from the private sector to review wages in the public sector holds no real credibility, we all know about benchmarking. Let’s face it, what company would go in slash the wages of the client who puts gravy in their bottom line.

    An interesting comparison to last week’s figures, was a comparison to the British public versus private sector wage average, in the uk there is no great disparity between the two.
    Your assessment of qualifications having no great bearing on wages is true, in the real world productivity and your intrinsic value to the business hold most sway.

    In saying all this, our family is divided down the middle, an electronic engineer who took the safe route and became a secondary school teacher, and myself a self employed creative. The public sector wage, guaranteed food on the table when times got fairly rocky.
    What to tell the kids if they listened, I would say, give the civil service some serious thought. After about 10 years, I can see it becomes fairly mindless as productivity is not rewarded, a few favours and handshakes go a little further. But the roller coaster of earnings in the private sector is a stress they may want to skip.

    Perhaps I have found the answer in my own life, do what makes you happy, follow your dream and along the way…marry a civil servant.

    • DB4545

      “In the private sector the paymaster is the business owner”. If only that was the case. Tax breaks i.e. taxpayers money means that the paymaster in many cases is the taxpayer who gets little or no benefit in return.
      1. The taxpayer bailed out the banks.
      2. The taxpayer subsidises business through low corporation tax.
      3. The taxpayer provides significant tax relief on pensions for business owners.
      4. The taxpayer provides many tax loopholes that enables business to reduce, avoid or defer paying it’s fair share in this society.
      Communism for the wealthy and tooth and claw crony capitalism for everyone else. The real public/private debate is the way in which the public purse is robbed to serve private interests.

      • HTH


        I think you are overestimating the influence of the the public sector on the private sector, especially in Ireland. Large industry sectors such as agri, pharmaceuticals, and IT are mostly export driven. Many of these companies sell nothing at all to the Irish government, or even its employees. The consumer market in Ireland does contain many public sector employees, but I think they are a minority.

        Also in general money flows from the private sector to the public sector. Tax breaks reduce the amount of money going from private to public accounts, but they don’t reverse the flow.

        The bank bailout was a notable exception, but the banks are only a small part of the private sector.

        • DB4545

          I’ve discussed corporation tax on this forum before. It’s so embedded in the economy now that if we changed it severe difficulties would arise. The net effect is a huge subsidy paid for by taxpayers which benefits large corporations. David discussed this before and figures in the region of 14 billion euros annually were mentioned. A subsidy of 14 billion from the taxpayer to the private sector is hardly an overestimation of influence. Factor in the taxpayer spending on healthcare including pharmaceuticals (at prices well in excess of NHS and European margins), medical devices etc. and you’re talking about serious numbers. Even if public sector workers are a minority they spend a significant amount in the domestic economy. If that money isn’t circulating in the domestic economy from the vast majority of lower paid public sector workers what impact will that have on the economy? The real debate is who pays and who benefits in the public/private debate. The taxpayer pays tax for services with no choice in the matter and to a large extent the private sector and specifically large corporations reap the rewards. Taxpayers fund the IDA, business and industrial estates, airports, roads,hospitals, schools,NAMA, universities,(some) TV stations and most other major infrastructure. Taxpayers are the major landlords in this debate. I think any reasonable analysis must conclude that taxpayers are not getting an equitable return on their investment.

          • HTH

            I agree that taxpayers are not getting an equitable return on their investment. Public service wages are a huge part of government spending, so the high wage rates are a big cause of the poor value.

            I do understand that some businesses benefit from high public service wages, e.g. a coffee shop next to a revenue office. I know that the some of the wages go back into the local economy, but many workers get no benefit from this,
            e.g. the workers in the company exporting baby formula to China are paying high taxes to pay high salaries to revenue officials who pay high prices for coffee.
            Thats great for the revenue guys and the coffee shop owner, but tough on the baby formula workers who are competing with companies from other countries.

            That particular coffee shop owner would probably be very happy with high tax rates and high public service wages, but I think most workers would benefit from lower public service wages, because the the government could spend more on non wage items, or hire more people for the same overall wage bill, or reduce taxes.

            Unfortunately I think the idea that we could recoup an extra 14bn in corporation tax is not realistic. It would be great if we could, but Ireland only takes in about 55bn a year in taxes in total, and that is slightly over par for an economy of our size. Much of the profits being booked through Ireland
            by certain multinationals and other “brass plate” companies have nothing at all to do with the work done here, so those profits would be declared elsewhere if we went after them.

  23. E. Kavanagh

    “…we see that in a capitalist society…” Well there’s your problem right there. Clearly Ireland is not a purely “capitalist society”; and nor should it be. Any reasonable person shouldn’t want a pure unregulated capitalist society. The whole labour/social democratic advancement is based on the need of having some kind of collective power to balance against capitalistic abuses. Do we want to go back to “Strumpet City”?

    I think this article is somewhat useful, but is just wrong from a societal/social democratic perspective. The article implies problems, but doesn’t actually point them out. Certainly just giving wage increases because of education seems wrong; but this article would probably be a lot better if it listed a bunch of such problems.

    Giving average pay figures lends no credibility to the article. I would assume that the private sector has a greater percentage of minimum wage jobs; and that the public sector has many people at higher levels. The public sector is not pyramidical in structure as one would expect the private sector to be–it has three parts to government; schools have way more teachers than cleaners; hospitals are full of well trained professionals, not burger makers etc. A straight wage comparison is an extremely lazy, and frequently wrong, way to make a point–typical of an economist (so called or not)!

    Lastly on the point of wage increases: better service is not the only basis for getting a wage increase. In fact for non-profit bodies clearly it can be a flawed measure. How can a very good teacher, nurse, garda, cleaner, politician or judge provide better service? One obvious basis for increased wages is to get and keep good people; another basis is social harmony; another is the importance of a group of people.

    This could have been a good article, but it isn’t. I’m not saying there is nothing wrong with the public service; but this article is mainly just throwing muck, rather than pinpointing problems.

    • StephenKenny

      In the private sector, performance is related to profit, directly or indirectly, and the management hierarchy is – should be – aligned to the sustainability of the company (general profitability & financing, over time). The difficulty with public sector is that there is no numeric method of assessing performance.

      Long ago, the public sector took on all the features of a classic bureaucracy – these are well understood. The balance between the growth of the organism and the effort spent in whatever it was that it was originally created for, breaks down. Ever more effort and resources is expended on growing the organism at the expense of the so-called ‘front line’ services.

      I’ve consulted for a number of public sector organisations, in a number of countries, and all that varies is the scale of the problem.

      The most extreme that I’m aware of is in the UK’s healthcare system, where it is now most effective for the organism to be run by people with PR backgrounds. I worked at an IT centre that had no staff with any IT technical skills at all – the one guy who knew how everything worked was on sick leave with depression. This sounds like an exaggeration, or a joke, but it’s not. Private companies go broke and collapse, public sector just stop doing what they were created for.

      The French system has more inherent strength against this sort of total internal collapse.

    • DB4545

      See my comment above. The fact is that the public and private sector are mutually entwined as is the case in all modern democracies. Large corporate sectors such as healthcare, pharmaceuticals,defence industries, IT etc. depend on the public sector for their business and the public sector is mutually dependent on these sectors to provide products and services. The public/private debate in the context of the article above is merely a tool to drive down business costs or more specifically wages for the lower paid groups in both sectors. Is the business owner going to get more sales if his public sector customers get a 20% pay cut? Are the private business owner’s employees going to get a 20% pay increase if the business loses 20% of sales? That runs all the way through the economy from taxis, hairdressers,bars, restaurants, supermarkets, airlines,insurance, construction etc.

  24. Colin

    My advice to somebody unsure of what to do would be to find out what you are passionate about and then target a career in it.

    So, if that means a young wan who is mad about a bit of glam and style, why not go train to be a hairdresser – good money in it I’m told.

    Then, if a boy racer is excited by cars, look into finding a way of training to be a mechanic.

    If you are excited by buildings and structures, study civil engineering or architecture.

    The trick is finding something which rouses your interest and allows you to develop a passion for it. This way, learning about it becomes less difficult and more rewarding.

    And remember, its never too late to follow your dreams.

  25. michaelcoughlan

    Hi David.

    “You tell me”

    Thanks David. I will.

    The article isn’t actually that bad. It requires a bit of deep thinking to understand the points you are making and fair play to you, you raise very important questions which are necessary in a country and society as dysfunctional as Poluba. (My new name for Ireland a cross between Cuba and Poland; cheap eastern European labour in a country depending on transfers of funding from a much bigger neighbor just like Cuba)

    My beef on this occasion is with the quality of the responses. They are by and large dreadful beyond belief and I WILL explain.

    “When we stand back, we see that in a capitalist society the only reason anyone should get higher wages is if the service he/she provides is getting better. If yes, great, but if not, then the organisation can’t justify wage increases”

    Yes but we don’t have a capitalist society we have a fascist one where loyalty to the regime is how you increase your remuneration example;

    The guy in the link repeatedly advised about the bubble by his subordinates and he sticks with policy and now is given the top job in the Dept of Finance without competition from private industry. That’s and example of how loyalty for protecting the toxic status quo in the PUBLIC sector gets an asshole promoted and his nest feathered.

    • michaelcoughlan

      Now for and example in the PRIVATE sector where loyalty to a toxic regime achieves the same results;

      Jamie gets a pay RISE to 20m AFTER JP Morgan gets fined 14bn for shafting its own customers.

      “In truth, the real reason the public sector is a much better place to work than the private sector has nothing to do with degrees and the like. It has everything to do with unions”

      A load of bolloc%s statement. Your pay whether public OR private has NOTHING got to do with unions it’s got to do with politics. The better you serve the prevailing political agenda whether you are employed in the public OR the private sector the better your chance of a pay rise.

      And what do almost ALL of the responses involve once again the perennial fuck*ng public versus private bickering. No wonder the two guys in the links are laughing all the way to the bank.

      The answer to the question you pose at the end of the article for me is as follows;

      Tell you son that if you are the type of person who can screw your fellow man or woman in every conceivable position from every angle possible with your tool wrapped in sand paper and it not bother your conscience you will achieve great riches in life. Usually however this is just before an extremely angry mob (sometimes led by Para troopers) kicks in the door of your fuher bunker and cuts you in two halves with a machine gun just like Cheauscau or Hitler or Gadaffi or Mussolini or many of the bankers around the world now being gunned down in broad daylight.

      If you want your kids to live a fruitful life filled with purpose, love and productivity tell them to be self reliant, not to fuck over their fellow human beings but co operate and trade with them in a sustainable and respectful manner using sound money as a basis of your trade you will give your child a farm more important gift than anything from Sears etc.

      Best regards,


    • michaelcoughlan

      “Yes but we don’t have a capitalist society we have a fascist one”

      You will see in the link 14 points necessary to describe a state as fascist. Does America not tick EVERY one of the boxes?

      • Colin


        Chew on these….

        ‘the fascists of the future will call themselves anti-fascists’

        ‘Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery’

        - winston churchill

        • michaelcoughlan

          I don’t see myself as a socialist. I see myself as an old fashioned capitalist and libertarian.

          America is a fascist country. When Churchill spoke of socialism he was speaking about communism. The pope condemmned socialism (communism) in 1931.

          Thanks for your post.


  26. jj

    I work for a company subcontracted to the PS as the PS cannot employ directly. I sit nicely on the fence of private and public. To be truthful, I don’t know who is more shameful and don’t be fooled, both are lazy. The PS has better conditions and is a broken system as it cannot get rid of useless employees. The private sector would find a way to cut corners in a straight line. I deal with private companies, and trying to get them to do things correctly is impossible. That is a form of laziness.
    In effect, one does sod all, the other does things less than half assed; may as well not be done. I’ll leave you guess which is which…
    From personal experience the same applies; I am my own mechanic, I will never ever let someone else touch my car, I will go to France or Germany for my health. If I had more time I would produce my own food, I might get to it yet.
    As far as I am concerned we are frauds, public or private, we are, in majority, incompetent. The quality of everything on the continent achieved by our neighbours is far superior, beyond our abilities to appreciate.
    The only thing we have going is we laugh a lot, or do we anymore?

  27. HTH


    Public workers are not paid more because they stick together, its because their customers are forced to stick with them!!

    Apologies for shouting, but this is the elephant in the room. The PS unions are so effective because their members work for state enforced monopolies, and can set their prices (tax) as high as they like. The customer (taxpayer) has no choice but to pay.

    If you are unhappy with your local school, you cannot get a tax reduction for home schooling your kids, or hiring a private tutor. If you are unhappy with your roads or library you cannot withhold your property tax and pay someone else to maintain them. You could end up in jail if you try!

    If you think your local butcher is too expensive (paying himself too much), you can choose to go to a supermarket, or even open your own shop, and there is very little the Butchers Union can do to stop you. Monopolies or cartels are hard to maintain, unless you have police to enforce them.

    I think that public service unions are taking advantage of their captive customers. The fact that the government and public service workers have their fees collected by force, should mean that they are more careful about the salaries they reward themselves. But I don’t think they have any awareness of this moral issue.

  28. Thanks for all the comments on this article. I have read them all and am wiser as a result of the time. Thnaks very much. I would like to know more about this theory of bureaucracy. Any leads? Best David

  29. Pat Flannery

    All civil servants should be subject to regular “fitness reports” and required to complete regular “continuing education” courses.

    All public service pensions should be “defined contribution” not “defined benefit” which would clean up the markets – investment managers of “defined benefit” funds do not have to show a return.

  30. johnleahy66

    I hope one day to see the job security of the public service. For years I was a teacher in the private sector and last January made the decision to join the public sector teaching profession as I was on a two-day week in my previous job. I had to move up the country from my previous job to take up a temporary maternity cover position which ended after five months. In all probability I am facing years of moving around the country from one maternity contract to another to obtain the necessary experience to qualify me for a more long-term role. I know other teachers in the same boat. I may even have to go to the Middle East for experience if I can’t get anything in the tight Irish market.
    You may call this all a whine – so be it.
    But for anyone thinking of advising their children to go into the teaching side of the public service – please inform them that the above is probably what they will face.

    • HTH

      John raises an important issue. If you are telling your kids to get a public service job, make sure its not in an area where the incumbents (insiders?) have already pulled up the ladder on there would be colleagues. Like teaching, where the Unions have agreed to treat some of their newer brothers as second class citizens. I guess some brothers are more equal than others.

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