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« Taking a Break | Main | Dates with the Devil: The Recession Diaries June 28th »

June 25, 2009

Comments

Barry

Michael,

Surely the issue is not so much what percentage of gdp public sector wages are but the relative difference between them and the private sector?

Plus those figures are ancient.

dealga

Hi,

Just to follow Barry's question, this post draws a number of comparisons but, to be honest, all I could think was 'so what'?

"Only 11% of all social benefits are means-tested in the EU, Ireland leads the means testing league at nearly 25% (compare this to Denmark and Sweden where only 3% of benefits are subjected to means testing."

You automatically assume that's a bad thing, obviously. Maybe you have explained why elsewhere, but maybe we're in the right, maybe we're being sensible. I've been to Copenhagen - I didn't like balking at buying a second cup of coffee... Surely everything should be means tested as long as the means testing is fair. I've heard the argument that the inefficiency of doing that costs as much (or more) than it saves but, if true, it's still a poor reason to not require people to show they require support from their fellow citizens.

"Employment of civil servants is the fourth lowest out of 26 OECD countries."

Again so what? Why are we in the wrong? What does employing more people guarantee you? Furthermore you used percentage figures. But given that total employment rose considerably in the bubble years then the "just under 14% of total employment, to just under 16% in 2008" is a considerable rise in headcount, no? Why did a massive jump in people employed in the construction industry, for example, automatically require an equivalent (or greater) rise in the number of civil servants?

Where's the evidence that all those extra civil servants in other countries are needed, are doing jobs that need to be done and need to be done by the State? Are doing those jobs efficiently? Are not paralysed by restrictive work practices?

WorldbyStorm

dealga, a good question in the sense of worth asking in terms of why not means test? However there's strong evidence in the case of child benefit that means testing it provides the least optimal outcomes in dealing with child poverty, which I've discussed on the CLR at http://cedarlounge.wordpress.com/2008/10/14/budget-day-so-lets-see-if-they-slim-state-provision-because-after-all-the-market-has-been-such-a-success/

If you're asking should child benefit be taxed, well then I'm much more open to persuasion. And so with all other benefits.

I think that beyond efficiencies and optimisation arguments there's the necessity for all citizens to understand that social solidarity incurs both responsibilities (taxation, etc) and benefits (whatever they may be at whatever point one is at).


I think the issue re employment of civil servants is also an interesting one but worth noting that the OECD itself felt that the number we had was too low for our population. If we're coming 4th lowest in a field of 26 it's hard to believe that somehow we're squeezing out a more efficient delivery of services. That's certainly not my experience and if we're talking about the broader Public Service the gaps in service are considerable even on a day to day basis.

Michael Taft

Barry, thanks for the comment. Yes, the figures lag - but that is a problem with international comparisons in so many areas, especially sub-categories of pay. And, yes, the difference between public and private sector pay is an issue. However, the point I was making here is that, from a comparative perspective, our public sector pay bill isn't all that high. In fact, it's relatively low - even though this particular fact hasn't emerged in the debate to date.

dealga, those are pertinent questions. Re: means-testing, yes, it's not a good thing (in my opinion, of course). It is bureacratic and inefficient, setting up numerouse unemployment and income traps (which, of course, only affect those on the lowest incomes). Those countries with well-developed social protection systems don't rely anywhere near to the same extent as we do. Of course, no system can do away with means-testing altogther. There are circumstances that require such interventions. The trick is to limit these as much as possible. However, the question you pose is one that I will try to answer in a subsequent post - for creating an economically and sociall efficient social protection system is absolutely key to raising our productivity, living standards and our quality of life.

I would also refer you to the NCC report on competitiveness - they produce, admittedly tentative, data that suggests Irish public sector productivity is one of the highest in the EU. Again, not something that gets mentioned much in the current debate. I would also point out that those countries with a strong (and large) public sector as well as a strong social protection system, are some of the most competitive economies in the world. That's because a strong public realm is not an obstacle to growth and competitiveness but rather an indispensable ingredient.

The NCC report can be found here: http://www.forfas.ie/media/ncc090108_acr_2008.pdf

WorldbyStorm

Sorry, that wasn't meant to pre-empt Michael's comment. I wrote it in a hurry and should have made that clear.

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