Tuesday, 4 July 2017

The Guardian on top form

From The Guardian:

Damning government report shows depth of public sector pay cuts

The new report found a 3% drop in median hourly earnings between 2005 and 2015 for workers in 32 public sector occupations whose salaries are set by the government on the advice of independent pay review bodies.

It found median hourly pay fell by an even greater amount – 6% – during that period for workers across the board, as the recession of 2008 hit wages hardest in the private sector.


Dinero said...

OK I'll give this one a go. If half of employees work for gov and half private sector that means the private sector pay dropped by 9% and the public sector 3%, the opposite to the headline.

Mark Wadsworth said...

Din, it's only one fifth or one sixth public sector, but apart from that, correct.

mombers said...

I wonder what pay increases were enjoyed by doctors and nurses who quit the NHS and became locums to same at a much higher cost though? To me there's no doubt that public sector workers are not being paid enough. Sure, the rates are set by government, but they need to be high enough to attract enough skilled people to fill the posts. Schools, hospitals, police, firefighters etc are all struggling to recruit and retain. And of course many public sector workers are on in-work means tested benefits so much of the pay rise is clawed back anyway.

Lola said...

Mombers. Does not the Public Sector already enjoy a premium in wages (and other benefits) over the private sector?

This is interesting https://www.ifs.org.uk/uploads/publications/comms/r97.pdf

I actually do agree that teachers (say) are underpaid. (Mrs L was a teacher...) but this, by observation, is caused by the structure of nationalised education that manages to both enjoy endemic producer capture and at the same time exploit the front line employees - the classic chalk face classroom teacher. I think the same is true of the health service although I don't have the same evidence of my experience.

It's a conumdrum.

mombers said...

On the one hand, we have a question of whether what a government employee does is a net positive or not. At current staffing levels, this is definitely the case in my opinion for
*police officers
The economy would fall over if any of the above were abolished. I don't think that they are overstaffed, the only time you'd want to reduce headcount / wages.

So if these services are essential and add to public wealth, pay needs to be set at a level that attracts enough people. There's plenty of waste in government payrolls but I'd say not the above. And if enough people are not being attracted, the premium over private sector jobs is simply not high enough. It's hard to determine the premium in any case - what do you compare to what? And how do you adjust the implied premium of a final salary pension that will almost certainly be repudiated to a significant degree for civil servants early in their career?

Lola said...

Mombers. Well you can de-nationalise education and healthcare and see what happens to pay. And scrap the Departments of Education and Health, putting Public Health - e.g. environmental health (epidemic control say) - under the Home Office. And if you think it necessary deploy the YPP/MW education and health vouchers. My bet is that teachers and nurses pay would rise.

The Police are a role of the state, but there are already more 'private' policemen protecting property than state ones.

The Fire and Rescue Service is - IMHO - probably best managed by the state, or better local authority. I mean, it worked well for Hugh, Pugh Barney Mcgrew, Cuthbert, Dibble and Grubb in Trumpton...

Lola said...

Critical update....

mombers said...

@Lola no country has been able to fully denationalise healthcare or education. By denationalise I mean make it private buyer, private seller, with the option not to participate in the market. A fully denationalised health industry would not force hospitals to take in people who don't have private funds to pay for treatment. Or no school for your child if you can't or won't pay for it. Vouchers are indeed an interesting proposition but won't it get to the point where the publicly funded industries have to be regulated to such a high degree that it makes little difference to a nationalised service and has the burden of admin costs? A figure of 30% has been bandied about for the amount of US healthcare spending that goes on administering the byzantine insurance paperwork. Not a useful utilisation of resources and probably a major reason behind their outlier status for health spending.
And non-state 'police' officers thank goodness do not have the special powers that state police do - I would not like to be arrested by a private company! Far better to have a well paid state police force IMHO

Lola said...


De-nationalised healthcare. The history of healthcare outside state control is one of charitable provision with a high degree of unpaid or very low charges to the 'poor'. People are 'sympathetic' to use Adam Smith's word and seem to want to help others. The parallel evidence of the UK's relatively on international comparisons charitable giving supports that. I rather think but cannot prove that the 30% rump are being bought off for gerrymandering purposes.

Schooling likewise. My grammar school founded in 1588 provided education to both the children of wealthy and many free or low cost bursaries to poorer able children. Vouchers would only enhance this.

Regulation by bureaucrats is the curse of our times. Regulatory bureaucrats are entirely self serving as their incentives are distorted. On the other hand market regulation works well. Consider the Institution of Civil Engineers. It created a training and regulatory structure well before government could get in on the act. From memory the same is true for medical Doctors.

Oh yes indeed. US medical insurance is a nightmare. That's because it is heavily regulated and has all sorts of restrictions on things like cross state line sales and the way it is sold and set up. Obama made that even worse. It's a nationalised insurance system in all but name. And it suffers hugely from ambulance chasing.

Policemen. Powers of. I agree. You cannot hand out police powers to anyone but the police. (See the FCA for how that fails). That was not the point I was making. I was just saying that the protection of property is already enjoying a lot of non-official-police activity and it works well.

And my preference is for the local County forces. The last thing we need is to have a nationalised i.e. run by central government police force.

formertory said...

Mombers, we already have a very well-paid State police force when you add to their basic their pensions and benefits which even after (very limited) watering down are still massively generous on a scale that most of them (and most people generally) completely fail to comprehend. It costs millions to pay a single 80ths-less-cash, inflation proofed, annually increasing pension with full rights for the widow / widower of a police officer, with payments commencing from age 50 (yeah, I know, it's now 55 and some can get it from 48 or so).

Similarly teachers; I don't believe there's a single one of the buggers (except maybe Mrs Lola?) who has any understanding of the generosity of their pension scheme.

Lola said...

formertory. Mombers. From memory the police pension budget for my area consumes about half of the whole police budget...

Lola said...

FT. Mrs L understands the generosity of her pension. I have also pointed this out, and the fact that they are tax consumers, to most of her teaching mates. They really don't like it up them...:-)

formertory said...

Lola, I did an exercise a few years ago (when GAD rates were rather higher) and took a hypothetical case of a young person joining the Police on 18th birthday, and joining the (then current) pension scheme with full benefits at 30 years. Further assumed no promotions, but salary increasing 3% p.a. The web has many sites you can go to to see what benefits accrue to Police officers, as you know.

So after 30 years, on a calculated "then" salary and using the web resources to provide the "then" pension payment, and then a simple GAD calculator to show how much cash would have to be in a plan to provide a lifetime pension annuity from age 48 with widow's rights, etc......... can't recall the exact number but it was pushing £1.75m at a time when GAD rates were, as I recall, around 4%. So in essence, one might claim with some justification that every unpromoted copper after 30 years is a double millionaire, plus the salary payments already received, plus maybe another lump-sum equivalent of £650,000 when the State pension kicks in at 65.

That is not an ungenerous pay package (being as how pension is, of course, deferred pay..... so they say).

I was very confident you would have kept Mrs L on the straight and narrow. Never quite forgot a married couple, retiring senior teachers, coming in for advice and being astounded that their joint pension arrangements providing cash plus £78k, indexed, a year wasn't what the rest of the world had to play with.

"But how will they have holidays?", they gasped!

Lola said...

FT. Well. Yes. And right now with tiny GAD rates (consequent upon Carney's financial repression interest rates of ~ 0%) CETV's are astronomical. All they can now calculate is longevity plus indexation with zero investment return. The whole thing is bonkers.

Lola said...

Good grief! More serendipity...

Mark Wadsworth said...

All very interesting, even though we've drifted way off topic.

Mark Wadsworth said...

L, caps make the same obvious point that I was trying to make.

paulc156 said...

L. Just on the point about civil engineers and their 'self regulation'. Construction industry has long been pressing for relaxing of burdensome building regulations and Grenfell might turn out to be the culmination of that process.
Also, I recall hearing on Newsnight a couple of weeks ago that the government had scrapped plans to reduce fire prevention requirements in new free schools. Anyhow, watering down fire regs seems to have preceeded hosing down of tall buildings.

DBC Reed said...

As Paulc says we have reached the point where people see through the absurd claims that the private sector provides a cheaper more efficient supply of everything. Having been bribed by the lunatic Thatcher to make big profits out of formerly state-owned houses, people now find that, according to Sayid Javid, the housing market is "broken"(fucked more like) with henceforward none of the next generation able to afford to buy houses and that anybody remaining in social housing can be incinerated by people whose control of the funding relies on economising on materials etc.
The banks caused the 2008 crash by providing too much money worldwide for the soon to be pronounced fucked housing market, then, when they had lost their money doing something that local building societies had previously done quietly and efficiently, received a bail-out in the trillions. And where did this bail-out come from? Was it borrowed from the banks? No money there.No it came from the "magic money tree" (state-created money) that the suits squeal doesn't exist.

This blog is getting more and more like the Daily Mail with its obsession with Islam and the joyful exhilaration of jumping off the Brexicliff.
There is a long tradition of left-wing LVT activism most notably nowadays with the Labour Land Campaign which has got through to a major political party.
Right wing blowhards on here should make some attempt to work with them since they have got somewhere (MW is Treasurer of LLC).This practice of running with the fox and chasing with the hounds is prattish and self-indulgent.The blowhards should retreat from the cliff edge and cohere in the centre round the mixed economy where left and right systems are co-ordinated: the mixed economy served us well. Left-wing extremists were given the cold shoulder then and it is time the right-wing extremists got the same treatment now.

Lola said...

DBCR. Wonderful. And error-full.

One example. It was regulationism and the unwarranted expansion of money and credit by governments that precipitated the 2008 bank failures. In the UK the FSMA2000 effectively nationalised the banks by regulation. It was not light touch regulation - Brown was lying about that - it was extensive and mis-regulation on an industrial scale and its absurd rules encouraged lending which together with the 'wrong' interest rates (set by the Bank of England) drove lending up hugely. It was without any doubt government and bureaucratic failure. (Oh, I forgot about the capital adequacy rules set by the international regulators. One of them gaily admitted that they had no idea of the 'right' number and simply thought that 4%(?) sounded 'about right'.

And what is being debated is not DM lite. It's the polarisation between liberty and personal responsibility (y'know the 'free society') and the opposite, slavery and irresponsibility.

What we agree on the method of funding necessary government expenditures by way of taxes on land location premia.

Lola said...

DBCR. I should also say that I hugely value your comments. Our interactions on here are exactly the arguments and debate that needs to be had in the wider world, and is not happening.

Needless to say, you're wrong and I'm right...:-)

Lola said...

Pc156. Nope. It's the other way about. It's the regualtionism that's the problem. Tick a box and it's all OK. No need to think.

As I have previously said, in my engineering education thinking about and designing effective fire stops was a core part of the training. It was about making you look at something and think about it. A bureaucratic regulation driven tick box mentality suppresses thinking. And I have seen that in spades in financial services. I was saddened to see this mentality in construction at Grenfell - seemingly.

ThomasBHall said...

@ DBC- The whole notion of left and right is rubbish. We all agree that LVT fixes a large number of injustices- and so we campaign for it. I find it really wonderful that this particular issue leads to the stated objectives of every (mainstream) political party. A fairer, more affluent, more equal society- meritocratic and free. The flip side is that most people can't see this- regardless of allegiance.
Don't forget that this blog is Mark's personal site- he chooses what is published. I am still to be persuaded that Islam is anything other than a delusional belief system that has demonstrated a track record of inspiring violence and administering injustice. Don't forget the left has a strong tradition of Euro-skepticism as well. It is the poor working class that have their wages undercut by cheap immigrant labour after all. There are many reasons to dislike the EU or to have voted Leave, but their blatant subsidizing of landowners through the CAP and their insistence on VAT being levied in all member states is enough for me.

paulc156 said...

L. The sensible argument is for the regular reassessment of fire regulations in the light of changing circumstances not for the removal of fire regs. If construction industry was in any way concerned with the efficacy of fire regs they should be lobbying for that rather than the 'bonfire' of regs they constantly lobby for. The idea that left to their own devices they will construct safe buildings is somewhat at odds with historical precedent regardless of the motivation of individual civil engineers. Companies generally seek profits first, [short term prioritised over long term since in the latter case managers will have moved on or retired] and social responsibility is a distant second. That applies equally well to finance. [hence the abysmal performance of fund managers in the private provision of pensions etc]. ie; they get well remunerated almost regardless of how well they perform.

Lola said...

P156. Please will you point me to a place where construction is asking for a bonfire of fire regs? (?!?!).

I disagree. The vast majority of construction businesses value their reputations and want to stay in business for a long time as that is what most rewards them. Similarly designers carry PI insurance. On top of that English Law can pursue anyone for negligence.

It nil to do with 'social responsibility' - a nonsense phrase in itself. It has everything to do with personal responsibility and property rights.

I grant you there are developers that have not been as scrupulous as they should have been, but they are in the minority and are mostly 'rent seekers' (and we know how to deal with that don't we?).

Furthermore most properties are bought on some form of finance. Lenders want to be sure of their security. They require high standards of construction and often indemnities.

As I say, it is fundamental for architects and engineers and building designers to design out fire risk, especially in high rise buildings and has been from long before building regs (and their skills have developed as we have learned more).

Grenfell was a flawed design of retro fit insulation driven by greenies and bureaucrats (and Blair!) and was to the current building regs. No-one stopped to think - moral hazard from tick box mentality.

paulc156 said...

"was to the current building regs"

If construction industry was prioritising safety they would have been calling loud and clear for an end to outdated regulations. Rather the silence was deafening. It was instead, cross party groups of MP's in parliamentary sub committees that were doing so: This article dated March of this year.

"Building control departments in councils have been left toothless and eviscerated while the authority of fire officers and architects has been weakened in favour of profit. Look where that has got us." A.N Architect.

Lola said...

Rubbish. I have heard it reported that evidence was given to the Committee about the fire regs.

And I go back to my point. The education of building designers is (was?) thorough on the need to design in fire safety. Grenfell demonstrated that people were not thinking. The cladding complied. Tick the box. Regulationism breeds moral hazard and abrogation of personal responsibility.

paulc156 said...

Rubbish? Er yeh whatever. 'Evidence 'given to the committee' Yes and the MP's on that committee asked for a reappraisal of fire regs as described in the article. I never heard anyone from the industry do likewise. Nor have you I guess...As for your last paragraph, it seems even an architect from the private sector recognises that profit took priority over fire safety even if you can't.

DBC Reed said...

Worth reading George Monbiot's "The Grenfell inquiry... stitch-up.." in today's Guardian for an old-fashioned marshalling of damning facts, in this case about the government-backed Red Tape Initiative where brave but practical entrepreneurs such as Chair Sir Oliver Letwin carried on with their vital work of cutting red tape such as building regulations even while Grenfell burned.Letwin, speaking through his own arsehole,has proclaimed "the call to minimise risk is a call for a cowardly society".The interlocking chain of establishment figures stretching out to Policy Exchange on whose advisory panel is Charles Moore formerly editor of Daily Telegraph and Letwin's best man gives an indication of where power lies in this country on matters of building safety (and no doubt much else).
Monbiot shows a hitherto unseen talent for irony."In other words the Red Tape Initiative is a representative cross section of the British public.In no sense is it a self-serving clique of old chums, insulated from hazard by their extreme wealth, whose role is to decide whether other people(colloquially known as "cowards") should be exposed to risk"
A rare case of our ruling-class riff raff being flushed out in the open.

Bayard said...

"especially in high rise buildings and has been from long before building regs"

I didn't know they did high-rise in the C17th. What happened to all the Queen Anne tower blocks?

Lola said...

B. You little wag you...:-)

...The first set of national building standards were introduced in the Building Regulations 1965. These were a set of prescriptive standards that had to be followed. The Building Act 1984 brought fundamental changes to the building regulations regime. It introduced:...

From here https://www.gov.uk/government/publications/2010-to-2015-government-policy-building-regulation/2010-to-2015-government-policy-building-regulation

London had building codes from earlier than that as did other LA's.

But my point stands. Building standards were introduced by the 'market' and then codified, probably from pressure by good builders to the authorities to control bad builders.

DBC Reed said...

If you read the "History of Building Regulations" on the Net it records the first regulation as in 1189. I cannot see that the first few hundred years of regulations being locally focused (London Bristol Worcester Warwick) makes it any less regulationism : quite clearly the great and good wanted to stop jerry-builders burning the places down. I cannot see any noble guilds concerned for the beautification and improvement of the urban environment just a desperate attempt to stop fire and cholera ( from nil sewerage systems). If anything the history of building regulations shows the emergence of concepts of socialism and co-operation in built-up areas, not to mention the punishment of any early piss takers who thought doctrines of laissez faire allowed neoliberal scoffing at public health as "a call for a cowardly society".

Bayard said...

DBCR, I suppose what Lola is going on about is the extension of building regulation from things that affected the entire neighbourhood, like fire and sanitation, to things that affected just the householder, like insulation and just abut everything else, the point being, like an awful lot of regulations, that they now assume that the end user is lazy, stupid and ignorant and should be protected from the consequences of their laziness, stupidity and ignorance and not allowed to learn from finding out the hard way.