'Like student protests today’s strikes boil down to ‘who pays?’ blog discussion

Former_MSE_Lee

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Like student protests today’s strikes boil down to ‘who pays?’" Blog.

Please click 'post reply' to discuss below.

joyce63

I've recently left the civil service on voluntary redundancy but am angry at how the Government are treating my former colleagues. We are in the middle of a pay freeze, which is of course effectively a pay cut, and at the very same time the Government expect staff to pay more for their pensions.

I understand some of the logic discussed here and also that many people in the private sector don't get pensions but you need to understand how people are being hit.

Had I stayed in the civil service, I would have taken a £3k hit on my salary as they withdrew some allowances I was receiving, PLUS I'd have a pay freeze for 2 years, PLUS I'd have to pay an extra £50 a month towards my pension, PLUS inflation is on the (high) rise. It's a double/triple whammy to people who are in the main not well paid at all.

spikyone

joyce63 wrote: »

It's a double/triple whammy to people who are in the main not well paid at all.

Which is no different to those in the private sector, where:
- many private companies had pay freezes in 2008-2010, and nobody is currently getting inflation-beating pay raises*
- retirement age is increasing
- final salary pensions have all but disappeared, many even closing to existing members

Remember also that public sector pensions are effectively guaranteed - they can't possibly collapse or implode in the way that some private sector schemes have. The government will have to find the money from somewhere!
Public sector pay and pensions ought to have been tackled long ago, but sadly Labour's policies over the past decade were to introduce benefits and tax credits hand over fist, rather than looking at the financial hole into which it was dragging the country. It shouldn't be a "race to the bottom" of course, but why should public sector workers be cushioned from the hits some of us were taking three years ago, given the size of the UK's deficit?


I also want to take issue with Martin's comments on "the welcome massification of higher education". I hope you mean making higher education accessible to high achievers from any social background, which I too would welcome, but your statement is rather unambiguous. We could easily afford and justify tax-subsidisation of degree courses if we focussed on quality and not quantity, and didn't blindly encourage all young people to go to university.
Yes, we need doctors, lawyers, and engineers, but we also need plumbers, builders, electricians, secretaries, etc. and those people do not need a university education. It doesn't de-value their contribution to society! Equally, those people should be subsidised, post-GCSE, to undertake a suitable vocational subject.

We also need to maintain the quality of degrees. Degree course should have minimum entry requirements of 3 Cs (excluding General Studies) at A level - and that's assuming we move the current grading system back by one so that A* becomes A, A becomes B, etc. Some years ago, when in opposition, David Cameron proposed a similar system, stripping away 'pointless' degrees; if I remember correctly this was to maintain the affordability of university education but reducing the number of 'soft' courses would add far more value to having a degree.
Sadly he didn't stick to it and instead decided to encourage as many universities as possible to charge £9k a year - don't believe the myth that this is £27k of debt either, as most engineering degrees are 4 year Masters courses (required for IMechE accreditation) and doctors will also spend longer in education.

(*Incidentally, bonus points will be awarded for the first mindless banker-bashing hijacking this thread)

wozearly

joyce63 wrote: »

I've recently left the civil service on voluntary redundancy but am angry at how the Government are treating my former colleagues. We are in the middle of a pay freeze, which is of course effectively a pay cut, and at the very same time the Government expect staff to pay more for their pensions.

I understand some of the logic discussed here and also that many people in the private sector don't get pensions but you need to understand how people are being hit.

Had I stayed in the civil service, I would have taken a £3k hit on my salary as they withdrew some allowances I was receiving, PLUS I'd have a pay freeze for 2 years, PLUS I'd have to pay an extra £50 a month towards my pension, PLUS inflation is on the (high) rise. It's a double/triple whammy to people who are in the main not well paid at all.

Without wanting to take sides too much in this particular debate, a significant number of people paying into private sector pensions over the past 4-5 years have seen them;

a) switch to defined contribution, ie. the amount paid out is no longer guaranteed or especially predictable until you are much nearer retirement date

b) require higher payments to ensure a comparable payout to a defined benefit scheme

This has also been against the backdrop of pay freezes and high inflation which, I agree, almost inevitably hits the lower paid harder both on public and private sector workers. On top of this, the point you made as well, that a number of private sector workers don't necessarily get any employer contributions towards their pension at all.

Now was never going to be a good time to apply changes that hit public sector workers - although arguably there never really is a good time for that type of action.

Equally, public sector workers were comparatively well protected when a lot of the private sector schemes were changed and so now that the changes are being proposed in the public sector the level of sympathy is perhaps lower than it would have been a few years ago...and its awkward to argue that all private sector workers, including those on low pay, really should contribute more in taxation to protect pension payouts and/or contribution levels for public sector workers when as a general rule private sector pensions give a smaller contribution from the employer's perspective and ask the employee to contribute more.

Its no surprise there's such a hefty deadlock on both sides of the debate at the moment.

wozearly

spikyone wrote: »

Yes, we need doctors, lawyers, and engineers, but we also need plumbers, builders, electricians, secretaries, etc. and those people do not need a university education. It doesn't de-value their contribution to society! Equally, those people should be subsidised, post-GCSE, to undertake a suitable vocational subject.

Its another good example of the see-saw problem. Some people are happy with the idea that we, as society, should subsidise the education and training requirements for people who will then contribute things of benefit to us - especially if they otherwise wouldn't have taken that route.

The counter-argument, particularly on the vocational end, is that if we are training enough people to be, say, plumbers and builders...then we don't need to further subsidise this as taxpayers because the system is working well. You could argue the same, to an extent, for degrees that lead to very well-paid jobs where the salary acts as a significant draw.

The areas most in need of subsidy, IMO, would be those where we aren't getting enough people through - probably because a) the rewards aren't attractive enough compared to other alternatives, or b) the barriers to training/learning are too high.

...but actually working out where these areas are isn't always easy, and tends to fall down when you move away from vocation-linked education/training or degrees. You'd find it difficult to argue that we had too many, or too few, History or Language graduates because by nature they'll tend to scatter into a wide variety of different fields.

The end result of overt subsidies is to encourage people to take degrees or training that is designed to lead specifically towards a certain type of job at the end. Not all degrees are built that way, and its not necessarily desirable that they should be...

Lokolo

spikyone wrote: »

I also want to take issue with Martin's comments on "the welcome massification of higher education". I hope you mean making higher education accessible to high achievers from any social background, which I too would welcome, but your statement is rather unambiguous. We could easily afford and justify tax-subsidisation of degree courses if we focussed on quality and not quantity, and didn't blindly encourage all young people to go to university.
Yes, we need doctors, lawyers, and engineers, but we also need plumbers, builders, electricians, secretaries, etc. and those people do not need a university education. It doesn't de-value their contribution to society! Equally, those people should be subsidised, post-GCSE, to undertake a suitable vocational subject.

We also need to maintain the quality of degrees. Degree course should have minimum entry requirements of 3 Cs (excluding General Studies) at A level - and that's assuming we move the current grading system back by one so that A* becomes A, A becomes B, etc. Some years ago, when in opposition, David Cameron proposed a similar system, stripping away 'pointless' degrees; if I remember correctly this was to maintain the affordability of university education but reducing the number of 'soft' courses would add far more value to having a degree.
Sadly he didn't stick to it and instead decided to encourage as many universities as possible to charge £9k a year - don't believe the myth that this is £27k of debt either, as most engineering degrees are 4 year Masters courses (required for IMechE accreditation) and doctors will also spend longer in education.

(*Incidentally, bonus points will be awarded for the first mindless banker-bashing hijacking this thread)

Yeh but with the huge increase in numbers of people going to university, it doesn't make it viable for the tax payer. It's not going to change now.

Not everyone is going to be paid well after graduation with a higher number of graduates to make the cost of putting someone through higher education not viable.

I do agree with the new student finance as many in the student forum know. With the number of students now going to university there are only 3 options; Lower the number of students, higher tax rate to counter the large increase in higher education costs, make the student pay for themselves. Now the second option I think would be the worst possible solution, unless only graduates were taxed (which in reality, the new student loan is really a graduate tax). Lowering the number of students would see a lot of universities fall, staff made redundant and things would just go crazy. So that really only leaves the final option.

I am not 100% on the £9k fees, I think more information should have been published about how much the government currently gives university per student (obviously the universities aren't surviving on £3.5k/student/year) to see the difference between the now and then. Whether it was altogether £6k and now universities are being greedy, or if it were £9k a year altogether and they are just trying to get what they have had previously.

spikyone

wozearly wrote: »

...but actually working out where these areas are isn't always easy, and tends to fall down when you move away from vocation-linked education/training or degrees. You'd find it difficult to argue that we had too many, or too few, History or Language graduates because by nature they'll tend to scatter into a wide variety of different fields.

The examples you cite are genuine academic subjects that can lead to a society-benefitting career. And both would require good 'A' level grades, so would not fall foul of my suggestion. As an example, a good friend of mine took American Studies. No right-minded person is going to give you a job in any occupation because you took that course - what is the point? It's this type of degree-for-the-sake-of-it course that I find objectionable, and that de-values universities and degree courses.

wozearly wrote: »

You could argue the same, to an extent, for degrees that lead to very well-paid jobs where the salary acts as a significant draw.

I don't buy into suggestions that salary acts as a draw for degree courses. For academic degrees, you have to take appropriate 'A' level courses, which you decide on when you are 15. I don't believe that a 15-year old is thinking in terms of salary, or even has a well-informed idea of potential earnings. Tell a 15 year old they can earn £30k and they'd bite your arm off, yet according to this it's the average salary for a male in the UK!

wozearly wrote: »

The end result of overt subsidies is to encourage people to take degrees or training that is designed to lead specifically towards a certain type of job at the end. Not all degrees are built that way, and its not necessarily desirable that they should be...

Perhaps subsidy was a poor choice of word - what I meant was that whilst people stay in productive, continuous education - up until the end of their first degree (including a masters), it should be taxpayer-funded. There is an argument that university is a choice; but then so is studying 'A' levels (I'm not sure when/if mandatory education until the age of 18 comes into force).
Where would you draw the line? If it's going to be anywhere, it ought to be post-GCSE, as you could go out and get a job at that age.

I understand that no system is perfect, but a merit-based degree system where only high achievers are encouraged to study for a good-quality degree, reducing the number of university entrants and maintaining the value of degrees - in both social and economic terms - is surely better than what we have now?

2sides2everystory

Spooky :eek: ... I see I was posting about insiders, those who had bought in, and those outside, at around the same time the MSE piece was published. With due deference to the spikeyone's wise words I'd better not mention the context

Martin's blog piece is a nice magnolia but it possibly avoids the drivers of what or who gets defined as inside or outside.

I am built the wrong way perhaps, but whether it is long term public sector workers clinging irritably to their final salary pension pots asking us who have lost ours or never even had a sniff of one to support them, or students rioting and breaking things, or that industry that shall not be mentioned as an experiment on this thread complaining that they are merely a scapegoat for the troubles, the words that spring to mind far too easily are indifferent (vis a vis effects on outsiders), lucky (to be in while it lasts), exploitative (of their special 'in' position), selfish, self-serving, blowing own trumpet, ignorant (of effects on outsiders). Sadly the words that don't come to mind easily but which I wish were more natural to our predicament are words with a bit of real leadership behind them like free, consensus, wrong, reinstated, outlawed, brought to book, special tax.

We are all of course insiders to our own views and politics. And that leads in so many directions that it is a muddle in which perhaps only chaos theory insiders are at home :cool:

Lokolo

2sides2everystory wrote: »

We are all of course insiders to our own views and politics. And that leads in so many directions that it is a muddle in which perhaps only chaos theory insiders are at home :cool:

Until we all learn to s*** money.

spikyone

Lokolo wrote: »

Yeh but with the huge increase in numbers of people going to university, it doesn't make it viable for the tax payer. It's not going to change now.

Not everyone is going to be paid well after graduation with a higher number of graduates to make the cost of putting someone through higher education not viable.

And if you look at my first post, disagreeing with Martin's point, I am completely opposed to that "huge increase". If I remember correctly, the number of people going to university has doubled in the past ten years. Is that desirable? Based on the second parahraph I've quoted from you, of course it isn't.

What is the point of someone spending three years at university when they could be in gainful employment, contributing towards the economy and their own pension costs, and benefitting society through their work - whatever that work may be. And this is especially true if they never again use what they've learned (academically!) at university.

Incidentally, @2sides, I'm not a banker myself, but public sector workers whinging on the news about how bankers caused this mess and got away scot-free is ignorant and smacks of petty jealousy. For all that industry's ills, the bankers didn't blow the UK's money on an unaffordable system of tax credits and benefits, not to mention providing international aid to rich and corrupt countries whilst bombing others until their leaders left power...
(EDIT: and let's not forget who it was that bailed out said banks with no strings attached regarding remuneration and payment of bonuses, while those banks were still haemhorraging money - economic ineptitude of a seismic scale by the former Chancellor...)

antonia1

joyce63 wrote: »

Had I stayed in the civil service, I would have taken a £3k hit on my salary as they withdrew some allowances I was receiving, PLUS I'd have a pay freeze for 2 years, PLUS I'd have to pay an extra £50 a month towards my pension, PLUS inflation is on the (high) rise. It's a double/triple whammy to people who are in the main not well paid at all.

The Hutton Report (based on proper analysis rather then hearsay and cherry-picking individual cases) found that there was no evidence that the public sector pay was lower to counterbalance excellent pensions.

Bear in mind that a fully qualified teacher will start on at least equivalent salary to an engineer, and the current pension system has been rated as equivalent to approximately 20% employer contribution. In engineering, employer contribution of 5% (in return for employee contributing 5%) would not be un-typical. Changing the teacher pension may be viewed as unfair to the teacher, but keeping the pension as it is may be viewed as unfair to the engineer.

Finally, private sector workers have also been (on the whole) undergoing a pay freeze in the face of high inflation for the past few years also, in many cases employees have chosen to take pay cuts rather than risk mass redundancies. Note the news today of the loss of 15,000 jobs at Lloyds Banking Group - these will not be the highly paid [STRIKE]gamblers[/STRIKE] bankers, but ordinary admin staff and the like. Times are tough for everybody, "insiders" and "outsiders" alike.