RE: Economy8 Nov 2023 18:04
I did not want to get into this but given the misinformation by other posters, I felt i had no option.
Lets start with a few facts.
According to The National Institute of Economic and Social Research (Niesr), the public sector accounts for nearly 1/3 of the total workforce. Its only 17% officially but that does not count all.
So to claim that 10m getting nearly twice the wage uplift as the private sector is non-inflationary, is wrong.
MUCH more important is the fact that the public sector is holding back productivity gains in the overall economy, hence creating upward inflationary pressure. The National Statistics office have stated that productivity in the public sector has dropped 13% since 1997, whilst the private sector output has gained 38%.
The Public Sector has, where possible, demanded the right to work from home post Covid, holding back commercial productivity in many areas.
In the past 1/4 century, two thirds of employment creation has been by the poorly performing public sector. Once again, raising costs on tax payers whilst limiting (and raising the cost) the workforce availability for the private sector.
In the last year, there were 4m strike days which in turn ruins productivity in the private sector, which is inflationary.
There are over 5m public sector pensioners (12% pension rise last year) who have pensions linked to inflation whilst most private sector pensions are capped at a 5% annual rise. Hence, higher public sector wages push the pension costs up.
Since 2015, public sector pensioners retiring on pensions above £100,000, has trippled.
Please dont tell me high wage settlements in the public sector are not inflationary. The taxpayer foots the bill and the government pasees on those costs.
During my City career, I advised institutions, multinationals, governments, chatted with Paul Volker, the then famous Federal Reserve chairman and spent a short period at The LSE.
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