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Column: Public sector increments are like a parallel universe

Imagine asking for a pay rise after your business goes bust. That’s the reality of increments, writes Keith Redmond.

Keith Redmond

Updated, 9.13

HUNDREDS OF BUSINESSES have gone bankrupt in Ireland every year since 2008. Their revenue dries up, their expenditure becomes uncontrollable, they become insolvent and go bust. As a result, their employees are made redundant and end up on the dole.

If it hasn’t happened to you, imagine you’re one of those workers. Now imagine you turn up at the business premises the next day and demand a pay rise. Sound crazy? Well, welcome to the parallel universe that is Public Sector Increments.

Increments are pay rises. They’re given ostensibly for ‘performance’. This is unfortunately a fairly nebulous concept in the public sector, is not externally, independently verified and seems to have more to do with simply being around long enough. So, for most, increments are just automatic pay rises demanded of an employer that has already gone bust.

Increments cost the taxpayer €200million every year. The Croke Park Agreement (CPA) protects the pay and jobs of public sector workers, who are 17 per cent of the total workforce. You would think that even those who support protecting the pay of this class of workers while the other 83 per cent bear the brunt of pay cuts and job losses would recognise that pay rises are a step too far to demand of a bankrupt State. But that would be to underestimate the sense of entitlement of trade union leaders.

Solidarity?

The CSO says the public sector is paid on average approximately 50 per cent more than compatriots in the private sector (pdf). It seems being benchmarked against the private sector is only ‘fair’ during the good times. In the bad times, it seems Liberty Hall believes the 83 per cent who pay the wages of the 17 per cent are very much on their own. Instead of showing solidarity and reducing salaries in line with the private sector, trade union leaders demand pay rises. Still think we’re in social ‘partnership’?

The minister in charge of public sector reform is Labour’s Brendan Howlin, a former trade union official who could only find €3.5million of savings on €1.1billion of allowances. In July, he stated that increments were ‘core pay’. So, pay rises are actually your core pay.

Try that with your boss on Monday, especially if he’s gone bust already. It’s clear that Minister Howlin is not the man to negotiate with public sector unions – indeed, no Labour TD is likely to take on the very organisation that funds the party. Instead it seems he has been sent there to protect the unions and hope ‘something else’ will come along. Any guesses? How about the 59 per cent tax rate some Labour TDs are calling for? How about Children’s Allowance cuts? Carer’s Allowance? Home helps? Ward closures?

There’s a lot you can do with €200million when it doesn’t go toward pay rises. It’s about choices. We can only hope Fine Gael get to make a few of these choices in the interest of taxpayers and service receivers.

Seeking pay rises when your employer is bust is clearly an insane expectation. But even those who support not cutting pay within the CPA, should not defend increments. After all, you can hardly miss what you never had.

Keith Redmond is a dentist in Sutton, Dublin, a small business owner and a presenter on NearFM. He can be found on Twitter @DrKeithRedmond.

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