Let the games over public sector pay commence

Commission’s report told us little we did not know, but it will influence forthcoming talks

So after months of deliberation, after the making of many submissions and the crunching of many numbers, the Public Service Pay Commission has issued its report.

Having been a closely guarded secret in recent weeks – the members were apparently asked to sign an undertaking not to leak it – the report was published on Tuesday with all possible haste.

Once he had briefed his Cabinet colleagues at their morning meeting in Government Buildings, Minister for Public Expenditure Paschal Donohoe stepped into the sunshine of the Merrion Street quadrangle to take questions from reporters, none of whom had read the report as it had not been published on the department's website until a few minutes earlier.

Donohoe, all earnest and amiable reasonableness, stressed how he understood the needs of public servants (some of them beg to differ) but how he had to balance that with the other demands on the exchequer.

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“The demands on resources available to the State are very, very, very large,” he said. “Every euro available to the exchequer can only be spent once.”

The process that is to come is an industrial relations negotiation on a political canvass

The report is a significant piece of work, even if its findings are pretty predictable. Public sector workers are paid more than their counterparts in the private sector, but there are reasons for that; public sector pensions are a big advantage, especially those begun before 2013; job security is an advantage; international comparisons suggest Irish public servants are among the highest paid in EU countries; higher earners earn more in the private sector.

It’s all in there, in the 150 pages of the report, and voluminous supporting documentation is available online. But heck, I could have told you all that without any commission.

Anyway, it’s kind of beside the point.

Zero-sum game

The fact is that finely tuned economic projections and statistical analyses of the comparative generosity – or parsimoniousness, depending on your point of view – of public sector pay and pensions will not matter nearly as much as the realpolitik of the talks: unions vs Government in a zero-sum game.

The process that is to come is an industrial relations negotiation on a political canvass.

It’s about push and pull, brinkmanship, tough talk, walkouts, constructive ambiguity, breakdowns, ultimatums, backroom deals, side deals – and ultimately a compromise both sides can live with and sell to their base. Or one that they can’t.

This is about politics, not science.

Look at it another way – if the commission had reported that public sector workers had fallen behind their private sector counterparts by 20 per cent, do you think the Government would be opening its purse strings to make up the difference?

If it had said that public sector workers were overpaid by a similar amount do you think that the unions would fold up their tents and meekly withdraw their pay claims?

The report will go some way towards creating a context for the talks expected to begin at the end of the month.

But far more powerful forces will also shape the context of the talks – the need of the unions to deliver real pay increases for their increasingly restive memberships, and the growing pressures on the public finances that will leave the Government unable to meet all the demands made upon it.

No wriggle room

Those two forces are clear and evident. The State is still borrowing €1 billion this year to pay its bills; its debt is still high, the outside environment uncertain.

The wriggle room in the public finances is tight to non-existent, especially with more public servants being hired and the ones that are there getting pay increases. Public service pay increases for 2017 and 2018, after all, will cost nearly €600 million as it is.

The recovery has been remarkable but since 2015 the politics has run ahead of the economics – public sector pay and recruitment has grown, while taxes have been eased, as governments sought to answer the austerity fatigue that came to define much of the public mood. Nowhere was the weariness felt more keenly than in the public sector.

The bottom line is that those public servants will go on strike if they don't secure a pay increase they're happy with

Pay cuts and the pension levy arrived just as the eye-watering tax increases of the recession years were biting hardest on those at the middle-income levels where the great numbers of public servants dwelled.

An awful lot of people went from relative comfort to being uncomfortably squeezed. They feel it still.

As well as a general demand for the recession-era pay cuts to be rolled back, many areas of the public service are seeking special deals.

Being told that the public sector is overpaid, over-pensioned and underworked only heightens their sense of grievance. That noise that you hear when Eddie Hobbs comes on the television is 300,000 sets of teeth grinding in anger.

The bottom line politically is that those public servants will go on strike if they don’t secure a pay increase they’re happy with.

The Government can’t afford to pay what they want, and might not be able to afford to pay what they need. After all the science, the bargaining starts soon.

Pat Leahy is Political Editor