Public sector pensions are facing a highly political attack

This is a redistribution from poor to rich, dressed up as a battle between public and private. Our members will not let it stand


Mark Serwotka
guardian.co.uk, Friday 17 June 2011 17.10 BST


When we in the PCS union announced the result of our strike vote on Wednesday, Francis Maude declared, "there is no justification for any civil servant going on strike while discussions are continuing".

Today, Danny Alexander, the chief secretary to the Treasury, has proved our union and our members right, and we welcome the decision of the headteachers' union to ballot for action in the autumn. Alexander has now publicly said what ministers have been saying in private for weeks, in effect: "We're happy to talk, but we will raise the pension age, increase contributions, lower accrual rates and we've already imposed reduced indexation through CPI". What's left to negotiate?

My union and others engaged in the talks in the honest hope of a settlement. We talked with the previous government, when part of the ministerial team was John (now Lord) Hutton, and the agreement reached in 2006 was described by Labour cabinet ministers as "a properly negotiated settlement" that "saved £13 billion for the taxpayer".

The coalition government knows this. Ministers have read Lord Hutton's report which showed (see the graph on p10) the falling cost of public sector pensions.

They have also read the National Audit Office report in 2010 which said changes agreed are "on course to deliver savings and stabilise pension costs". This was reinforced by the findings of the Commons public accounts committee in May this year which prompted committee chair Margaret Hodge to say the Treasury "appeared to define affordability on the basis of public perception".

That is why this government has been working so hard to sell the myth that our retired members live in the lap of luxury. In fact retired benefits officers, tax inspectors, court clerks, coastguards and others get an average pension of just £4,200 a year – about £80 per week.

Many people see increasing life expectancy as a reason for cheer; this coalition sees it as an opportunity to cut pensions. But, of course, longevity is increasing most for the highest paid, not for the low and middle income earners that make up PCS membership.

Alexander says those earning less than £15,000 will be protected from paying more. This is less than the equivalent of £7.60 an hour and covers just 4% of civil servants. Even these "protected" staff would still be forced to retire later and get a smaller pension under the government's proposals.

This is a highly political attack on the public sector. The government has announced more than £25bn in business tax cuts since taking office, yet is attacking our pensions despite the fact they have been expertly and independently scrutinised and found to be sustainable. It has attacked welfare and increased VAT, yet scrapped the bank bonus tax.

Of course it doesn't like to portray these attacks as redistribution from poor to rich, but as a battle between public and private. Low-paid private sector workers are exploited by shareholders and executives, not by fellow low-paid workers in the public sector.

The failure of profiteering businesses to provide decent pensions means taxpayers are paying billions more through means-tested benefits. The top executives of those companies walk away with six or seven figure annual pensions while their hard-working staff get nothing.

So why doesn't the government focus on this injustice? The real reason it wants to undermine public sector pensions is because too many private companies want to run our public services but they do not want to pay their workforces a reasonable pension.

Our members will strike on 30 June and continue to take action until the government talks honestly and openly with us. And next time, it will be alongside as many as 3 million public sector workers.

Public sector pensions are facing a highly political attack | Mark Serwotka | Comment is free | guardian.co.uk

It's a very well written article and I agree with everything.... It's just missing a little bit here:

"Private sector workers are exploited by shareholders and executives, [AND, not 'not'] by fellow low-paid workers in the public sector".

The two proposals aren't incompatible - I am being screwed by companies and executives AND by the gvt and its employees...

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Originally Posted by Gilles de Rais

"Private sector workers are exploited by shareholders and executives, [AND, not 'not'] by fellow low-paid workers in the public sector".

Bullshit.

Quote:

The two proposals aren't incompatible - I am being screwed by companies and executives AND by the gvt and its employees...

Spare me the persecution complex.

Originally Posted by contracycle

Bullshit.

Err... I got the tax to prove it.

Quote:

Spare me the persecution complex.

See above. I pay taxes. I am pretty sure some of that goes to pay for these public workers and their pensions.

What the article is trying to do is point out there are (potentially) bigger thieves/leeches out there. Fair enough. But it's not a very strong position to say - "Hey, I am only taking £1 out of you while the others are taking £5 (or whatever). So cool it, okay?"

Ideally, I want both to stop thieving from me. In the meantime, I guess most people will stop what is easier to stop and/or more visible to them...

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Originally Posted by Gilles de Rais

Err... I got the tax to prove it.

Sometimes it'slike you and I come from slightly different parallel universes, which differ only in their dictionary definitions.

Quote:

See above. I pay taxes. I am pretty sure some of that goes to pay for these public workers and their pensions.

You can't simply assert that any transaction at all constitutes exploitation.

Quote:

Ideally, I want both to stop thieving from me. In the meantime, I guess most people will stop what is easier to stop and/or more visible to them...

Public sector workers, who are mostly on barely more than the minimum wage, are not "thieving" from you when they expect their contracts to be honoured. If anything, you are stealing from them.

Originally Posted by contracycle

Sometimes it's like you and I come from slightly different parallel universes, which differ only in their dictionary definitions.

I don't know, I found that funny. Thanks.

Quote:

You can't simply assert that any transaction at all constitutes exploitation. Public sector workers, who are mostly on barely more than the minimum wage, are not "thieving" from you when they expect their contracts to be honoured. If anything, you are stealing from them.

Well, it's not like I had a choice in the signing of these contracts. As to public employees being on the breadline, let's not push it, okay? I am not familiar with the UK but here is something from the USA:

Federal pay ahead of private industry - USATODAY.com

Job
Federal
Private
Difference


Airline pilot, copilot, flight engineer
$93,690
$120,012
-$26,322

Broadcast technician
$90,310
$49,265
$41,045

Budget analyst
$73,140
$65,532
$7,608

Chemist
$98,060
$72,120
$25,940

Civil engineer
$85,970
$76,184
$9,786

Clergy
$70,460
$39,247
$31,213

Computer, information systems manager
$122,020
$115,705
$6,315


Computer support specialist
$45,830
$54,875
-$9,045

Cook
$38,400
$23,279
$15,121

Crane, tower operator
$54,900
$44,044
$10,856

Dental assistant
$36,170
$32,069
$4,101

Economist
$101,020
$91,065
$9,955

Editors
$42,210
$54,803
-$12,593

Electrical engineer
$86,400
$84,653
$1,747

Financial analysts
$87,400
$81,232
$6,168

Graphic designer
$70,820
$46,565
$24,255

Highway maintenance worker
$42,720
$31,376
$11,344

Janitor
$30,110
$24,188
$5,922

(...)

In France, the general conclusion is that public work is especially good for low-skill people - Plenty of advantages compared to the private at that end of the scale. For highly skilled people, it's the reverse - The private sector pays best but, obviously, the deal is different.

The truth is that I am getting very little for the taxes I pay - My use of public services is extremely limited. I appreciate that I need the bin collectors and road repairs and tube and stuff but I think UK PLC is making a good dime out of me, all told.

Why I should defend public employees from suffering as much as me is a bit of a strange ask.

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Come on, you know how averages work, there are undoubtedly some people on relatively good pay but the majority of office clerks, nurses, street sweepers etc are hardly raking it in. And indeed, that's the explicit deal that has been present in the public sector - accept lower wages in the present in exchange for a realtively good pension.

As for the US, in fact public sector workers are 4% cheaper than their private sector counterparts of equivalent age, education and experience, including all benefits. The idea of the expensive public sector is a politically partisan myth.

The rest of it is basically just a race-to-the-bottom argument. Which is pretty much the same issue I recently mentioned about capitalism relying on sectional disputes between workers. Plus that "low skilled people" thing is just a demonstration of prejudice, not insight.

And lastly the claim that you get very little is merely an argument to ignorance. You may not know what you get, but that doesn't mean you aren't getting it. I find the whole thing laughable.

Originally Posted by contracycle

Come on, you know how averages work, there are undoubtedly some people on relatively good pay but the majority of office clerks, nurses, street sweepers etc are hardly raking it in.

I certainly didn't say "raking it in" - I just said 'better off than their private sector counterparts'...

Quote:

And indeed, that's the explicit deal that has been present in the public sector - accept lower wages in the present in exchange for a realtively good pension.

And, in France at least, a bullet proof employment guarantee. As I said, in France, the lower tier of workers has a good deal if they manage to join the public service (there's some competition! Which is proof that the deal offered is quite attractive). The upper tier gets his kicks from something else than money...

Quote:

As for the US, in fact public sector workers are 4% cheaper than their private sector counterparts of equivalent age, education and experience, including all benefits. The idea of the expensive public sector is a politically partisan myth.

Well, as it seems federal employees are getting a good deal, it must mean that state employees are really getting screwed...

Quote:

The rest of it is basically just a race-to-the-bottom argument. Which is pretty much the same issue I recently mentioned about capitalism relying on sectional disputes between workers.

Fair enough but, as I said, people also fight what they can change and what they can see. I had a discussion some time ago with a guy who went from left to the right. He had been educated by left leaning middle class parents but, as he started working (for the gvt...) with prisons and then with people on benefits, he basically started to get more conservative. He is not saying "oh, they all worthless" but he strongly believe that there is a disincentive to work and quite a bit of cheating going on... Also the "but there is no jobs", he felt, was incorrect as lots of Polish people seemed to have found work in the UK...

When I pointed out that any such costs and issues were dwarved by companies refusing/escaping their tax payments, he simply couldn't connect - He intellectually is willing to concede/trust me that it is indeed happening but, for him, it's not as real as all the people on benefits he sees every day.

And his conclusion was: "Well, reforming the tax system on the rich shouldn't stop us to make work pay at the lower end"...

Which is fair, I think.

Quote:

And lastly the claim that you get very little is merely an argument to ignorance. You may not know what you get, but that doesn't mean you aren't getting it.

File:UKExpenditure.svg - Wikipedia, the free encyclopedia

The biggest components are Social Protection, Health, Education and Defense - 65% by themselves. And these do nothing for me.

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Originally Posted by Gilles de Rais

I certainly didn't say "raking it in" - I just said 'better off than their private sector counterparts'...

Which they are not.

Quote:

And, in France at least, a bullet proof employment guarantee.

That hasn't been the case here for a long time. It's probable more stable overall than the private sector, but then again that's not by magic, it's because hospitals will always be needed. Unlike, say, whatever gadget is flavour of the month.

Quote:

Well, as it seems federal employees are getting a good deal, it must mean that state employees are really getting screwed...

Or that they're not actually getting such a good deal?

Quote:

Fair enough but, as I said, people also fight what they can change and what they can see.

Which is what these public sector workers are doing. And we should support them.

Quote:

He is not saying "oh, they all worthless" but he strongly believe that there is a disincentive to work and quite a bit of cheating going on... Also the "but there is no jobs", he felt, was incorrect as lots of Polish people seemed to have found work in the UK...

Recent figures show that estimates of benefit fraud amnount to only a tiny percentage of revenues lost to tax evasion. Andf the argument about immigrant labour is equally false, because plenty of people are willing to work on what are essentially unlivable wages. I've been in precisely that immigrant ghetto, that's where I started. But if your only goal is to feed yourself and save for a plane ticket, or to send money to somewhere where it will be much more valuable, then you don't have to pursue the sort of terms and conditions that people really trying to make a life need.

This argument seeks to reduce us all to virtual slave labour. The way to make work pay is to raise wages until work does pay, not to remove benefits until you are overtly using starvation as a threat. And that is precisely why that is such a deceptive slogan; "making work pay" really means driving down the cost of labour and impoverishing everyone.

Quote:

The biggest components are Social Protection, Health, Education and Defense - 65% by themselves. And these do nothing for me.

Really? You've never, ever been aided by the NHS treating someone with a communicable disease? You've never, ever, had any kind of business dealing by someone who was educated at public expense? You've never, ever been spared a burglary or a mugging because our streets are not full of starving and desparate people? And although defence is more debatable, we can at least say, you have really never benefitted from the fact that pirates are infesting Somalia rather than Devon these days?

Well then. You really don't know how good you have it. I grew up with no public health service, virtually no employment benefit, etc. It was a shithole. I have never begrudged a penny paid in tax, I am entirely pleased, even proud, to inhabit such a civilised society.

Originally Posted by contracycle

Which they are not.

I quoted the source of my data. USA Today. Are you saying they got it wrong?

Quote:

The way to make work pay is to raise wages until work does pay, not to remove benefits until you are overtly using starvation as a threat. And that is precisely why that is such a deceptive slogan; "making work pay" really means driving down the cost of labour and impoverishing everyone.

A fair point but it's also ignoring the fact that people at the low end of the skill scale are not very productive (in general/on average) and that increasing costs at this end tends to see companies accelerating labor-capital substitution and/or leaving tasks undone. I know you mentioned the rise in UK minimum wage having had no adverse effects but I quoted you some nice research from across Europe showing that it does have an effect, when pushed too far.

And I certainly wouldn't consider French SMICards to be 'raking it in' so that boundary of productivity can be hit pretty fast...

Quote:

Really? You've never, ever been aided by the NHS treating someone with a communicable disease? You've never, ever, had any kind of business dealing by someone who was educated at public expense? You've never, ever been spared a burglary or a mugging because our streets are not full of starving and desparate people?

Those are network effects. They're real but it's a pretty weak argument to justify taking serious money off me. Surely, the people directly involved ought to pay more? And/or, if you're selling me these on network effects, then, by God, I do want them provided as cheaply as possible - Which does mean pitting me against public workers in a race to the bottom. But to pick on your "we should support them" - Okay, when will they support me and fight for me having a better pension?

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