George Osborne's Plan B

[The Don]

Anyone see PMQs?



I make that a surplus of jobs of 145,000 yet unemployment has gone up by 128,000. Is the PM using different criteria than the ONS?

I didn't her PMQ - had a teleconfernece, was it

581,000 more private sector jobs

or

581,000 new private sector jobs

If it's the latter then the numbers are perfectly feasible, 581,000 more private sector jobs and then several hundred thousand lost.

There could also be a deliberate ignoring of seasonal factors, for example Christmas temporary workers, Call Me could have been counting then as new jobs.



Edited to add.....

Of course an increase in the size of the workforce may also have been a factor.

 

[Francesca R]

If the cost of public sector pensions was stable as a share of public sector* GDP over time, and the "give:get" ratio faced by successive generations of public sector workers and taxpayers was thereby as constant as I think it could be, then concerns about inter-generational unfairness would go away.

That is ultimately only secured if pension benefits or contributions (deductions from wages that would not otherwise happen) are contingent on longevity and real interest rates. Otherwise predictions would always be subject to positive and negative shocks from either of those. The cap and share idea (not implemented yet) is/will be a significant move in that direction, but at present public pensions are almost entirely non-contingent which is IMO the root cause of the distributional injustice issue.

I actually disagree with a blanket statement that public pensions should match private sector ones, because the latter are, and should be more contingent on business cycles and asset returns (therefore riskier, and theoretically mostly higher over time). The public sector is still affected by those (via tax revenue), but it should be affected less (via appropriate Keynsian automatic stabilisers). I agree with what various HM Treasuries have concluded over the years which is that public pension schemes which are broadly under central government control should not be funded.

Therefore I think that the "reverse-class-war" story that this issue is universally spun as, is misplaced. The stakeholders in respect of public pensions are past/future employees/retirees and past/future taxpayers. The representatives of these groups have spent years playing an incomplete-agent bargaining game (meaning they didn't all have representation, plus the representation they did have did not even in all cases represent their own interests evenly).

*I don't think there is anything egregiously unfair about the pension bill increasing if the public sector itself increases as a share of the economy

 

[Francesca R]

Regarding PMQs:

The prime minister said 581,000 extra private sector jobs had been created since the election - while 336,000 public sector jobs had been lost.
[ . . . ]
But the Labour leader said the figures showed the government's economic strategy was "failing", arguing that private sector job creation had not made up for public sector job cuts, as the government had planned.

(I changed the order of those quotes)

It is an absolute shocker that Cameron has some OK numbers and Miliband has some bad ones. . .

[ETA: MilliE was referring to the last three months, which is the 3 months to October]

BBC Link (UK only for recording I suspect)

 

[Skepticemea]

What distributional injustice issue? If you're referring to the perceived injustice at public sector workers pensions being better than private sector, is that not just the flip-side of a school teacher moaning about how much the head of utility company earns? The fact that one is perceived as tax payer funded (although both are) whilst the other is a "wealth creator" ignores the elephant in the room which is that few people who pay tax get a say in how it's used.

Have to applaud the coalition for it's ability to split the country though. It's ability to create divisions amongst various interest groups is the best I've seen yet and I started voting in '89.

 

[Francesca R]

I thought I was clear enough in post 162 that it was the inter-generational injustice issue I refer to. I also stated, for the second time in the thread, that the "private vs public" ruckus is the wrong ruckus in my view.

 

[Skepticemea]

I thought I was clear enough in post 162 that it was the inter-generational injustice issue I refer to. I also stated, for the second time in the thread, that the "private vs public" ruckus is the wrong ruckus in my view.

Apologies if that appeared to be targeted, my rant was omni-directional.

What, in your opinion, is the right ruckus?

 

[Francesca R]

That the contribute/receive ratio of, say, a Generation-Y public-sector worker in respect of salary deductions/retirement benefits will probably be a multiple of what was for a baby-boomer public-sector worker, and that this inequity has not been addressed well yet, with policies still being advanced that perpetuate it.

Also that the cost faced by a Generation-Y taxpayer to preserve the aforementioned injustice will probably be a multiple of what it was for a baby-boomer taxpayer.

 

[Skepticemea]

That the contribute/receive ratio of, say, a Generation-Y public-sector worker in respect of salary deductions/retirement benefits will probably be a multiple of what was for a baby-boomer public-sector worker, and that this inequity has not been addressed well yet, with policies still being advanced that perpetuate it.

Also that the cost faced by a Generation-Y taxpayer to preserve the aforementioned injustice will probably be a multiple of what it was for a baby-boomer taxpayer.

We're paying for baby-boomers selfishness?

 

[Francesca R]

Yes. Because there is a time distortion between payments in and receipts back out, and agreements are struck with the future stakeholders not being represented, and (historically) with those who are represented opting to immunise themselves against the uncertainty of incomplete information (about what will happen to costs in the future), with the acquiescence of legislators who will also be retired when the piper wants paying.

 

[Skepticemea]

Yes. Because there is a time distortion between payments in and receipts back out, and agreements are struck with the future stakeholders not being represented, and (historically) with those who are represented opting to immunise themselves against the uncertainty of incomplete information (about what will happen to costs in the future), with the acquiescence of legislators who will also be retired when the piper wants paying.

Ah, self-interest. Wonder when that crept back into politics.

 

[Francesca R]

It isn't/hasn't just been politics. Everyone involved in the bargaining exercise acted self-interested. That isn't necessarily bad in negotiating processes. But everyone involved isn't/wasn't everyone affected, and the opportunity to exploit time inconsistency has in the past run rampant.

 

[Rolfe]

If you're referring to the perceived injustice at public sector workers pensions being better than private sector, is that not just the flip-side of a school teacher moaning about how much the head of utility company earns?

And we're back on the meme that public sector workers are all teachers or nurses on modest salaries, and public sector workers are all heads of utility companies.

Why not compare like with like? What about the shop assistant moaning about what the Director of Education erns?

Rolfe.

 

[Skepticemea]

And we're back on the meme that public sector workers are all teachers or nurses on modest salaries, and public sector workers are all heads of utility companies.

When did I say that? I entirely disagree with that meme, not all of them are and that's the point.

I believe we've been over this before, but I see a difference between raising the age of retirement for a nurse to 67 and cutting her pension from 7k to 5k and raising the age of retirement for the Director of Education to the same age and cutting their pension from 60k to 50k. If you don't then we'll have to agree to disagree as I find one disgraceful.

Just as many of Labours actions whilst in government were objectionable and carried out because of self-interest, so are some of this governments. Who gets to pay for those who can't pay for themselves when they retire anyway or do we just accept that charities are going to have to take up the slack in 20 years time?

However, I do accept that my stating the above may bring on comments about it being unfair to target people that earn more money, even though high earners pay less tax than they have historically which is due to reduce further in part to recent legislation from Osborne and co.

 

[Debaser]

However, the way you're portraying it, a public sector job becomes a feather bed, where retired employees have the right to demand that everyone else make up the pension they want.

It's a recipe for a totalitarian state, where the privileged work for the state, and are supported by everyone else, while those not fortunate enough to secure such a plum post just have to struggle as best they can.

Hate to say it, but it actually sounds like a description of the Greek economy...

http://www.guardian.co.uk/business/2010/may/07/greek-debt-crisis-jobs



(Is that the economic version of Godwinning a thread?)