Research shows nurses and fire-fighters face up to 10% cut in pay


8:30 am - June 30th 2011

by Nicola Smith    


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TUC analysis, published today, shows that by this time next year (if the Government’s proposed pension contribution increases go ahead) workers across the public sector will find they are experiencing a living standards drop of up to 10%.

The livelihoods squeeze is absolutely not a public sector only phenomenon: workers across the private sector are also experiencing below inflation pay rises with average private sector settlements currently running at 3%, while inflation is at 5.2%.

But the public sector – where pay is currently frozen and remuneration is not generally higher than for private sector workers – is really set to feel the pain.

With just under 6 million workers across the UK (once the employees of nationalised banks are excluded) employed by the state and our analysis suggesting that a 9% fall in their living standards by 2012/13 will not be uncommon, the individual and economic impacts are set to be significant.

The research (.xls file) considers current pay levels among a sample of public sector workers in full and part-time work including nurses, fire officers, teachers, social workers and executive officer civil servants.

Will the raising of the personal allowance, reduced income tax and limited protection for the low-paid offset the worst impacts of public sector austerity? The answer is a resounding no. As the table below shows, workers across the public sector are facing significant living standards cuts come 2012/13.

Description Net pay 2012/13 after contributions increase & pay freeze (inc £250 annual uprating for low-paid) Effective % change in living standards by 2012/13 Real terms loss per week
FULL-TIME
Nurses £21,313.47 -9.2 -£41.40
Fire service officers (leading fire officer and below) £21,363.07 -9.2 -£41.63
Social workers £22,170.27 -9.2 -£43.29
Secondary education teaching professionals £25,286.59 -9.3 -£50.13
Civil service executive officers £19,187.55 -9.0 -£36.57
Nursing auxiliaries and assistants £14,199.41 -6.5 -£19.04
PART-TIME (assume contribution rate for full-time salary)
Nurses £13,173.25 -8.5 -£23.50
Fire service officers (leading fire officer and below) £6,569.47 -10.1 -£14.27
Social workers £13,845.02 -8.6 -£24.98
Secondary education teaching professionals £17,238.02 -8.9 -£32.43
Civil service executive officers £12,790.24 -8.4 -£22.56
Nursing auxiliaries and assistants £9,303.24 -4.4 -£8.27

Some of the lowest paid receive a degree of protection – but are still going to face significant living standards falls.

In 2013/14 the pay freeze will end – and unions will be keen to bargain for the highest possible future settlements to make up for lost ground. But with further increases in pension contributions proposed for 2013/14 and 2014/15 times, and tax credit cuts, particularly for working parents using childcare, continuing to take effect times will still feel tough.

In this context it seems fair to question whether public sector workers, delivering vital jobs across the country, are being asked to pay a fair price for the financial crisis.


A longer version is at Touchstone blog

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About the author
Nicola is the TUC's Senior Policy Officer working on a range of labour market and social welfare policy. She blogs mostly at ToUChstone.
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Story Filed Under: Blog ,Economy ,Fight the cuts

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Reader comments


If they don’t like their terms and conditions why don’t they get a job elsewhere?

I’m sure MP’s Will be facing the same cuts, do not forget these are hard working people in the public domain who work hard, harder then any teacher, fireman, they put them selves at risk of harm when they hold surgeries, when they walk on holiday in the Costa del sol or in Brazil as my MP did she had two weeks Holiday then spent four weeks in the same hotel on the same beach checking out poverty, see how hard working they are.

It does look at if the Tories want to return the working class back to the old days of low pay low pension and servitude, and I agree. After all labour agrees with it, after all my MP stayed in Brazil for six week ok two was on holiday but four was slugging it around the poor area. oh boy I must stop drinking coffee.

3. Paul Newman

Public Sector Grecian earnings went up 15% in excess of Private Sector in the “Boom” years of Blair and Brown. The last time the Fire Brigade went on strike they were looking for a 40% pay rise at the time which ended up as 14% over three years as negotiated by Prezzer ( They defenestrated the Union leaders who got the deal). Any respect anyone ever had for them evaporated as they were revealed to be freeloading do nothings with two jobs on a good screw which was ritually handed out to mates.
In fact if you include para state activity the Public sector is closer to 8,000,000 and was used by Blair and Brown as a means of wealth redistribution rather than service provision This is clearly not a viable way to continue or is anyone serious suggesting a good plan is to hose an unreformed state money hole with cash ?
I think you have to take a step back from this. Think of the country as like a Company When a Company has money sloshing around and poor management you often get a multiplication of “Vital roles”.
A swollen HR department . A throbbing and vital IT back up Department , a Company Creche a “New Horizons Envisioning Team”… I have seen all this
All of these vital jobs appear vital when you can afford them. When you cannot it is once again clear that the people who make the shit and sell the shit are the only ones who matter. Most of the rest of it has to go.
That is where the public sector sits today. it is a swollen HR department that the people doing the real work can no longer afford
Now this goes one of two way . Either Company gets its house in order or new management comes in and does it for them .The second option is likelier to be great more savage than the first but one way or another it has to happen..

We do need Public services and in order to keep them they must be on a sustainable and fair basis . These strikes are sheer selfishness attacking the tax paye , the country and Public service employment and the future of a humane country

“If they don’t like their terms and conditions why don’t they get a job elsewhere?”

1. It’s not that easy.

2. If enough people thought that, we’d be running out of nurses and firefighters. Bit risky.

3. Would you be happy if some of these people ended up on JSA after taking temp jobs that then folded, getting YOUR MONEY WAAAHHHH?

Of course they are on a fair bases MP are public servants let them live on teachers pay and pensions then you see people moaning.

Richard,

1. If it is not that easy this shows they are earning their market wage

2. When we start running out of nurses and firefighters we know that they are being underpaid. I am not aware this is the case.

3. No I would not be happy about people being unemployed, but presumably the post will be filled by someone else.

So there’s no such thing as a vocation then? People are just machines to do jobs as the market dictates? That is market fetishism in a nutshell.

Yes there is still such a thing as a vocation. However the market may make certain jobs unviable. The market allows for the correct allocation of resources, including labour.

Should people be paid for doing work purely for the reason it is what they want to do?

Fungus

1. If it is not that easy this shows they are earning their market wage

2. When we start running out of nurses and firefighters we know that they are being underpaid. I am not aware this is the case.

3. No I would not be happy about people being unemployed, but presumably the post will be filled by someone else.

So what about carers who devote their lives to looking after the sick, the disabled and the elderly? There’s no shortage of them and they’re unpaid so they must do a job of no value to society eh? That’s their market wage.

On the other hand the chief exec of Carphone Warehouse scraped by with a remuneration package of £1.2-million last year

http://www.ft.com/cms/s/0/e056ac50-a0ee-11e0-adae-00144feabdc0.html#axzz1Qld7cFcy

presumably that illustrates that very few people have the necessary skills to flog mobile phones, the high value society places on the business of flogging mobile phones (it must be very difficult and very arduous) and the absolute unwillingness of anyone to perform the same task for less. That then, is his market wage.

Which just goes to show you need to go to more than one lecture on free market economics to understand the complexity of labour markets.

10. Richard W

This comparing headline inflation rates with wage rises and concluding that people are worse off by the difference is utter bunkum. Why did you use RPI? Because it was a bigger number. The rise in tuition fees will add around 0.5 to the headline rate. Who experiences that 0.5 rise in the headline rate? Only people who spend on tuition fees and it is a windfall to benefit claimants and pensioners.

If the price of meat rises by 10%, are meat consumers worse off by the 10% of the rise? No. Meat consumers substitute by switching to buying more chicken etc and less meat. We are even starting to see the effect of higher fuel prices with bus transport firms reporting higher profits as petrol consumers buy less petrol and use the bus. Demand destruction is already happening and it would be wrong to conclude that people are worse off by the same amount of the rise in the headline rate.

If you want wages to rise then you need growth in the economy as you will not get one without the other.

11. Northern Worker

Clearly public sector workers should not have to work beyond 60. And private sector workers don’t mind working to 68 so they can.

Clearly public sector workers should not have to increase their contributions to their pensions. Private sector workers are delighted to pay more taxes so they don’t have to.

Clearly 90 per cent of public sector workers are entitled to index-linked, final salary pensions. The more than 80 per cent of private sector workers without any sort of pension are ecstatic at the prospect of paying more taxes so they can.

Clearly teachers, in particular, are being victimised. Private sector workers fully support their case for working no more than 1250 hours per annum, and we are horrified at the propects of 68 year old teachers educating our kids.

Clearly all of us in the private sector wish them well and we hope their strike action is successful, and we don’t mind using up a day’s holiday, or losing a day’s pay to look after their kids.

Northern Worker (Life-long Labour supporter until the last election)

Northern Worker @ 11

Surely you should be complaining about your own terms and conditions rather than sniping about other people’s? Wouldn’t that be slightly more productive? Instead of carping, why not start by asking yourself why you get shitty terms and conditions?

Why not ask why so many of the Country’s most profitable companies has closed final salary pensions? Why are wages being cut back and people being sacked despite companies making record pofits? Hey, why not ask why the CEO of some of the biggest companies are making millions while the poorest workers are being booted out in their droves?

Could it be that as organised labour disappears these companies feel able to piss on people?

Some people enjoy getting pissed on and some people don’t, if you are the type that get pissed on, why not demand better conditions for yourself instead of demanding that otherg share the urine?

Clearly all of us in the private sector wish them well and we hope their strike action is successful, and we don’t mind using up a day’s holiday, or losing a day’s pay to look after their kids.

I think you’ll find they’re your kids

14. Paul Newman

Jim – The reason teachers are able to force the rest of us to pay them far more than they could be employed at is that they are a monopoly supplier with access to endless tax pounds. It is not, as you seem to be suggesting to do with the heroic bravery of teachers ( some of the most insipid people in the country)
The compeititve conditions experienced by ther rest of us are what pays for everything, not the ideless of the unionised Public sector .

This situation cannot go on and no serious person thinks we can go back to the mass unions of the 1970s. Certainly not the Labour Party and they are actually bought and paid for by the Unions.

15. Chaise Guevara

“I think you’ll find they’re your kids”

Heh.

16. Chaise Guevara

“That is where the public sector sits today. it is a swollen HR department that the people doing the real work can no longer afford”

Newsflash: teaching, policing and healthcare no longer “real work”, claims guy who is totally an expert and not in any way a nasty little snob with a superiority complex.

So what about carers who devote their lives to looking after the sick, the disabled and the elderly? There’s no shortage of them and they’re unpaid so they must do a job of no value to society eh? That’s their market wage.

I presume Fungus isn’t talking about their value to society, he’s talking about what the government should pay them. There’s a difference between the two: their value to society determines the maximum the government should pay them, but if there are other people willing to work for less than that, you could make a case that the government should gladly pay that lower wage, because it frees up its scarce resources to do other worthwhile things. After all, public service jobs exist to provide public services, not to provide jobs for their own sake. Also, what you’re arguing is precisely that public sector workers should be paid higher than their private sector equivalents would be, which I hear a lot of people denying is the case.

So what about carers who devote their lives to looking after the sick, the disabled and the elderly? There’s no shortage of them and they’re unpaid so they must do a job of no value to society eh? That’s their market wage.

“I presume Fungus isn’t talking about their value to society, he’s talking about what the government should pay them. There’s a difference between the two: their value to society determines the maximum the government should pay them, but if there are other people willing to work for less than that, you could make a case that the government should gladly pay that lower wage, because it frees up its scarce resources to do other worthwhile things. After all, public service jobs exist to provide public services, not to provide jobs for their own sake. Also, what you’re arguing is precisely that public sector workers should be paid higher than their private sector equivalents would be, which I hear a lot of people denying is the case.”

Not at all. What Fungus is saying is that the labour market is so perfectly calibrated that it effortlessly generates the perfect wage level which reflects the supply and demand of each particular worker. People who are paid little (or nothing) are obviously in jobs in which labour is in low demand and plentiful supply. As the first graph you learn on any introduction to economics course illustrates, the rational response (if you want to be better paid) is to move to a job in which labour is in high demand and short supply.

Paul Newman @ 14

The compeititve conditions experienced by ther rest of us are what pays for everything, not the ideless of the unionised Public sector

But is it as simple as that? Is it as really simplistic as that?

Surely the competitive conditions that pays for everything is generated because we have a modern, Liberal civic society? Are you completely blind to the fact that having an educated population has contributed to the economy and the marketplace?

This is what cracks me up about you ‘no such thing as society’ people, you become totally obsessed with this shite that you miss the obvious. You actually believe that we are living in some kind of ‘Matrix’ style virtual reality and that none of this existed until you got plugged into the system.

It may surprise you to know that we did not just find this society lying around. What you are looking at is the culmination of centuries of advancements. The education system being but one of those advancements. However, that education system has created millions of literate, educated people. Those people create the very environment you think ‘just got here’. Without our society there would be nothing to be competitive about.

Even if teachers never taught a single piece of information, there value to society would still be immense. As ‘Northern Workman @ 12’ stated that millions of us will either have to take a day off work or pay someone else to look after ‘our’ kids. Well, doesn’t that give you a fucking clue? Doesn’t that give you a spark of an inkling of the full implications of that sentence? The only reason there are thousands of businesses and millions of jobs in existence is because the ‘State’ is looking after millions of kids in the Country allowing the parents to go out to work. That is before they have taught them to write, count or even think for themselves. Same as at the other side of the spectrum. How much money would be wiped out of the economy if everyone were forced to watch their own elderly parents? If we closed all the all the old folks homes in the Country, we could all spend our taxes on other things, right? No, we would all have to look after our parents and not be able to take jobs outside the house.

That labour force helps generate the very economy that you thing ‘pays for everything’. You try run a Country without the State and you see how much money is created. It may shock you to learn but shops, offices and the like do not just suddenly appear, they are every bit as part of our society as everything else.

Citizen Smudge @18

Not at all. What Fungus is saying is that the labour market is so perfectly calibrated that it effortlessly generates the perfect wage level which reflects the supply and demand of each particular worker. People who are paid little (or nothing) are obviously in jobs in which labour is in low demand and plentiful supply. As the first graph you learn on any introduction to economics course illustrates, the rational response (if you want to be better paid) is to move to a job in which labour is in high demand and short supply.

I’m not sure whether you’re disagreeing with what I said, or just my interpretation of Fungus?

“So what about carers who devote their lives to looking after the sick, the disabled and the elderly? There’s no shortage of them and they’re unpaid so they must do a job of no value to society eh? That’s their market wage.”

If people are prepared to do work for no pay then why should they get paid?

‘presumably that illustrates that very few people have the necessary skills to flog mobile phones, the high value society places on the business of flogging mobile phones (it must be very difficult and very arduous) and the absolute unwillingness of anyone to perform the same task for less. That then, is his market wage. ‘

What it illustrates are that their are very few people capable of being as effective at being the chief executive of a mobile phone company as the incumbant. The employer is willing to pay the high price becuase the services of the Chief executive are highly valued.

22. Citizen Smudge

If people are prepared to do work for no pay then why should they get paid?

I wonder if their work has anything to do with love, emotional ties, compassion and just a non-market determined feeling that it’s wrong to abandon members of your family who have the misfortune to grow old or fall ill. Just a thought like. So while their labour is in high demand and short supply it produces no market value – the complete opposite of what that market should produce on the graph of day one of introduction to economics.

What it illustrates are that their are very few people capable of being as effective at being the chief executive of a mobile phone company as the incumbant. The employer is willing to pay the high price becuase the services of the Chief executive are highly valued.

You don’t think it has anything to do with him/her being, in effect, employer and employee then? Or that the people who really decide the CEO’s pay hold similar values, don’t really bother to study the market and are in all probability good friends. Once again the economic laws of pure supply and demand don’t produce the result they should.

23. Citizen Smudge

Tom Ash @ 20

I’m not sure whether you’re disagreeing with what I said, or just my interpretation of Fungus?

Why don’t you discuss the ideas? The truth is that Fungus’ fundamentalist view of “perfect” labour economics is utterly laughable. It would imply that every single person in the world would be in danger of losing their job every single day of their working life by someone who offered to do it cheaper. That may be perfect for business but it would fundamentally destabilise societies across the globe and condemn everyone to declining living standards.

Citizen Smudge @23

To clarify, everything I said besides my first sentence of Fungus-interpretation was my view of your ideas. You said:

So what about carers who devote their lives to looking after the sick, the disabled and the elderly? There’s no shortage of them and they’re unpaid so they must do a job of no value to society eh? That’s their market wage.

I replied:

I presume Fungus isn’t talking about their value to society, he’s talking about what the government should pay them. There’s a difference between the two: their value to society determines the maximum the government should pay them, but if there are other people willing to work for less than that, you could make a case that the government should gladly pay that lower wage, because it frees up its scarce resources to do other worthwhile things. After all, public service jobs exist to provide public services, not to provide jobs for their own sake. Also, what you’re arguing is precisely that public sector workers should be paid higher than their private sector equivalents would be, which I hear a lot of people denying is the case.

Is there anything there you disagree with?

25. Paul Newman

Jim
I detect that nagging sense of emasculation common in male teachers and nurses. You have my pity but best leave it eh… You are of course right that teaching kids is all part of the fabric. There is, however, no link between over rewarding teachers and educational progress which has been predictably poor under monopoly supplier conditions.Resources have simply been eaten up by increased salaries and unnecessary layers of management.
No-one thinks we can do without schools any more than we can do without the Tube system .That does not mean resources should be unreasonably diverted from actual productive ctivity to the toll-gate keepers who merely work in one part of our society. Infra structure intellectual or otherwise is not the property of those who happen to be conveying it today. The Tube drivers union is not the tube.The NUT is not “education”
Its hard to disentangle a complex society but if you imagine a primitive tribe its easier. The men go out and kill stuff to eat. The old men and women stay by the fire teaching ounglings how to make spears and stalk, perhaps with models and stories.
In a global sense they all contribute but in a more tangible sense if no-one kills a mammoth, nobody eats.

@22

Of course their work has everything to do with love, emotional ties etc. That is why the caring they do is of great value to them – so much so that they do it for no pay. No disagreement there, but why should anyone pay them for this service if they are prepared to do it for free?

No it has nothing to do with them being employer and employee. I know you will find this surprising, but chief executives don’t actually appoint themselves. Amazingly I cannot walk down to Canary Wharf and appoint myself as CE of HSBC. You really think that those who decide on CE pay don’t study the market? I certainly do.

27. Citizen Smudge

i didn’t say you could appoint yourself as CEO I said once CEO you could (in effect) set your own pay. The idea there’s a free market for CEOs is laughable. Given the number of business scandals and collapses there have been in recent years – how often is a CEO summarily sacked?

You said:

“You don’t think it has anything to do with him/her being, in effect, employer and employee then?”

This is not true. They are hired and their renumeration is set by others.


Reactions: Twitter, blogs
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  19. Better dead than Red Ed « Paperback Rioter

    [...] None of this seems like an argument to further hit public sector workers, who are already facing a pay freeze for two years in times of high inflation and what could amount for some to a 10% cut in pay. [...]

  20. Gove on the attack, public sector workers on strike, and a bad night for the Liberal Democrats in Inverclyde: round up of political blogs for 25 – 1 July | British Politics and Policy at LSE

    [...] that due to low wage growth, inflation and the pensions squeeze, nurses and fire-fighters will lose as much as 10 per cent in pay. Shamik Das at Left Foot Forward unpacks claims that teachers will retire with an £500,000 pension [...]





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