local government pay freeze

[SpuffMonkey]

Well - at least we're not like Ireland (or at least not til after the election) where public sector has had a 15% wage cut, plus loads of redundancies - that would hurt...

[fafster]

What other areas of goverment are seeing a pay freeze?

[localzuk]

Good news for all you borrowers, all your debts will be worth less. You saves will have your savings destroyed to pay for the states finances.

 

Ah, but if that's the case, our pay is worthless too - so in real terms, we'll still be in the same situation when it comes to paying off debt.

[srochford]

They announced this wayyy back months ago. Not surprised really - as the public sector employees gets hit first whenever there's a slight problem with budgets. Its never MP pay, thats for sure

 

It's interesting to look at MPs pay over the past 30 years and see how it changed under the Conservative and Labour governments. Between 1979 and 2007 it went from £9,450 to £43,860; it now stands at £64,766. There were some massive increases under Margaret Thatcher - the first 2 years alone saw an increase of 50%. Under the Labour government no year has had an increase of more than 6.5%; most are 1% to 2.5%

 

Of course, a lot of MPs claim the infamous second home allowance but they were also introduced by Thatcher; they've just become rather more public in the recent past!

 

(figures from http://www.parliament.uk/documents/upload/M05.pdf)

[somabc]

Simple solution, don't vote Labour.

 

That's not a solution. Simple Solution is find something hopefully sustainable that creates money ie. Manufacturing, Green Technology, Coal / Oil / Gas etc.

[ICT_GUY]

Ah, but if that's the case, our pay is worthless too - so in real terms, we'll still be in the same situation when it comes to paying off debt.

Not so, I bought stuff that I wanted when my money was worth more then I will have had maximum gain from my labour.

 

Example, buying a house 10 years ago, its intrinsic value is still the same, its a shelter for my family. Yet its monetary value has increased 4 fold yet my wages (in purchasing power) has devalued every year.

 

If you had £100K in a bank, 10 years ago it would have bought a nice house, today even with interest you would lucky to be able to buy half a house.

 

This is how the government creates the illusion of growth, by rewarding those who borrow and punishing those who save. Money tied up in banks does not help the economy, but it does allow a lot of people you probably wouldn't like to have very nice bonuses.

[somabc]

Thtas the best way to look at it, at least for the next 12-18 months. Things could be a lot worse.

 

How could they be worse? The government has taken all the money they were going to use to pay you, pay for public services, pay for your pension, pay for your pay rise and given it to the Banks who have carried on giving it to themselves.

 

I am surprised we are not rioting in the streets.

[LeMarchand]

I am surprised we are not rioting in the streets.

 

I'm constantly amazed by this too.

[localzuk]

How could they be worse? The government has taken all the money they were going to use to pay you, pay for public services, pay for your pension, pay for your pay rise and given it to the Banks who have carried on giving it to themselves.

 

I am surprised we are not rioting in the streets.

 

We're British! Not French! Stiff upper lip old chap!

[sonofsanta]

How could they be worse? The government has taken all the money they were going to use to pay you, pay for public services, pay for your pension, pay for your pay rise and given it to the Banks who have carried on giving it to themselves.

 

I am surprised we are not rioting in the streets.

 

I often wonder what happened to all the fuel riots when petrol hit 70p a litre, seeing as we're now at 50% more than that. Seems to always follow a pattern with petrol prices:

1. Price goes up stupidly high
   
2. People complain
   
3. Prices get lowered, usually by supermarkets, with a hurt puppy expression and cries of "cutting me own throat guv'nor"
   
4. People are satisfied
   
5. Petrol creeps up again, except slower, so no-one notices and no-one complains and nothing has been achieved by anyone.
   

[somabc]

I'm sure the government would be happy for those left to say well at least I have a job as though nothing is wrong, as though it is normal for companies to pretend they have money and trade it around the world with each other for years until you have trillions in virtual money floating around and each step the people involved get paid.

 

Turns out the financial system is giant reverse game of musical chairs and the person left at the end loses.

 

Does anyone recognize this from 1984?

 

Mostly because proles are not expected to understand that they are exploited by the Party (as a source of cheap labour) and are unable and/or unwilling to organize resistance. Their functions are simple: work and breed. They care little about anything but home and family, neighbour quarrels, films and football, beer and lottery tickets. They are not required to express support for the Party, except for a mild form of patriotism. The Party creates meaningless songs, novels, even pornography for the proles. Proles do not wear a uniform, can use cosmetics and have a relatively free internal market economy. Proles also have free sex lives, uninterrupted by the Party, and divorce is permitted. Despite the personal freedoms enjoyed by the Proles, the Thought Police moves among them, spreading false rumors and marking down and eliminating any individuals deemed capable of causing trouble. The Prole quarters consist of rundown apartment buildings, shops, and pubs.

 

"If there is hope [Wrote Winston} it lies in the Proles.

 

If there was hope, it must lie in the Proles, because only there, in those swarming disregarded masses, eighty-five percent of the population of Oceania, could the force to destroy the Party ever be generated. The Party could not be overthrown from within. Its enemies, if it had any enemies, had no way of coming together or even identifying one another. Even if the legendary Brotherhood existed, as just possibly it might, it was inconceivable that its members could ever assemble in numbers larger than twos and threes. Rebellion meant a look in the eyes, an inflection of the voice; at the most an occasional whispered word. But the Proles, if only they could somehow become conscious of their own strength, would have no need to conspire. They needed only to rise up and shake themselves like a horse shaking off flies. If they chose they could blow the Party to pieces tomorrow morning. Surely it must occur to them to do it. and yet - !...

 

Until they become conscious, they will never rebel, and until they have rebelled they cannot become conscious.

Edited February 9, 2010 by somabc

[korifugi]

That's not a solution. Simple Solution is find something hopefully sustainable that creates money ie. Manufacturing, Green Technology, Coal / Oil / Gas etc.

 

So a combination of big hamster type wheels, bank managers and MPs then?

[somabc]

Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt - SPIEGEL ONLINE - News - International

"Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products.

 

Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.

 

Such transactions are part of normal government refinancing. Europe's governments obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills. Years later the bonds are repaid in the original foreign denominations.

 

But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

 

Fictional exchange rates that takes a special kind of genius!

[steveg]

I've never understood why people in different public sector jobs get different cost of living rises? - Surely its just that, a cost of living rise so it should be fixed for everyone - support staff, teachers, doctors, nurses, policemen and politicians etc.

 

If we (as a country) can't afford a pay rise this year then ok fair enough (we'll ignore how we got in this mess) but surely that means no one in the public sector gets one. What annoys me is if we don't but teachers get 2 or 3% and MP's get 6 or whatever percent.

 

Steve

[Jamo]

I was used to not getting pay rises, in PC world I had the same pay for 3 yrs they didn't increase the scales of pay once while I was there.... No cost of living or anything! I was v pleased to see pay rate increases in schools, I agree with the others, be glad you still have a job.

 

Has anyone else noticed that loads of apparently 'wealthy' countries are in 'debt'? Seems a bit of a coincidence.

[ozzy]

It sucks, it'll cause no end of bad feeling within schools when teaching staff get a rise and the rest of us don't because the teachers make the school work:mad: teachers could'nt do there job without all support staff from the cleaner to the office staff. It's about time that the population of this country got to know that this is the case. And what makes the childrens education possible.

[cookie_monster]

We're British! Not French! Stiff upper lip old chap!

 

 

 

hahahaha thud.... i fell of my chair when i read that.

[torledo]

Ah, but if that's the case, our pay is worthless too - so in real terms, we'll still be in the same situation when it comes to paying off debt.

 

you have to factor in two things. Inflation and interest rates....

 

Where those who have jobs may see a pay freeze a lot of them also have mortgage debt [the main outgoing], they are benefiting from very low interest rates which allows them to pay off more of this debt or to save the extra income because of these reduced repayments. They are effectively seeing a pay rise if they're on some of the tracker deals that were out there

 

If you rent, tough s***.

 

inflation, specifically, seems to do wonders for the real value of debts. And ofcourse specifically house price inflation is good news if you've got large mortgage debt and not a lot of equity. You don't need to worry about someting as trivial as paying the debt down with cash.

 

I must say i am surprised by a lot of the improved confidence surveys and sentiment - i think there's a lot of nervousness to come in the public sector, but also the pickup in confidence shouldn't be that surprising given the gument seem to have avoided the worst unemployment projections, and ofcourse those low interest rates.

 

ICT_GUY is quite right, savers are being shafted. This countries housing market is a joke, the biggest housing bubble in our history spread over 10 years, then the world's biggest ever banking crisis, and now house price inflation is running at 9-10% per year. WTF?? Just does not compute.

 

All i reckon is, if your not an asset holder, continue to get used to feeling poor [unless your in a very lucrative field of work in which case you probably already own a house or three]. Good thing is, i know who i'm not going to be voting for this election because of the wealth and income inequality. the pay freezes are just the thin end of the wedge as far as i'm concerned.....the pay freezes affect some more than others for sure. some have been completely unaffected.

[srochford]

 

ICT_GUY is quite right, savers are being shafted.

 

Has it ever been different? Sure, interest rates have been higher so you get more interest credited each year but if inflation is also higher then you're no better off.

 

The whole way the savings market works is that I lend my money to the bank. They then lend it to someone else who pays x% interest. The bank keeps some fraction of that and gives me (x - a bit)% interest. The only people that win are the banks because of that "bit" they keep.

[torledo]

Has it ever been different? Sure, interest rates have been higher so you get more interest credited each year but if inflation is also higher then you're no better off.

 

The whole way the savings market works is that I lend my money to the bank. They then lend it to someone else who pays x% interest. The bank keeps some fraction of that and gives me (x - a bit)% interest. The only people that win are the banks because of that "bit" they keep.

 

i agree in the sense that i think people should think more about the function of a bank and the banking sector, but i personally am not interested in savings for the interest return. Merely i use it as a comparatively safe store where i can get capital return ie my money back.

 

I'm sure there are other options that would cut out a bank and it's profit making via it's virtual money shuffling. But then that's me being lazy.

 

What i object to more than the returns via interest on savings, is the policy of forcing people to use that money by leveraging it. And the lack of inflation on earned income. This all has the effect of basically saying, cash is trash, if you don't speculate with it then you'll be shafted because your cash holding will be devalued and we'll allow borrowers to benefit twice...once via low IR's and again via capital appreciation.

 

I reckon low IR's, the extending of credit and capital appreciaton in stuff like bricks and mortar got us into this mess in part. But then when you see what a lot of people actually earn and how little they are able to save then there's little wonder that it's now the route so many are forced down. And no surprise it's gumment policy.

[torledo]

It sucks, it'll cause no end of bad feeling within schools when teaching staff get a rise and the rest of us don't because the teachers make the school work:mad: teachers could'nt do there job without all support staff from the cleaner to the office staff. It's about time that the population of this country got to know that this is the case. And what makes the childrens education possible.

 

what about the bad feeling where there are spending outlays of six figures for special projects [examples of which i've read on here recently], but at the same time we're led to believe, not enough in the govt. coffers to offer anything more than a below inflation increase for the same people who decide how some or all of that outlay is spent ?

 

Sounds pretty daft to me.

 

I guess the consolation is that spend is providing profits and [you'd hope] job security where it's spent . But how sustainable is that if there may be cuts in the future....or cuts elsewhere to protect such spending into the future ?

[srochford]

It's always going to be difficult when you can see big money being spent on "projects" but no money for even minor pay rises. You then get told "ah, yes - but that's capital funding and we can't use it for salaries" and at that point I get ready to explode; why can't we move money between the pots??

 

I think (and I don't know - it's just speculation) that it's often easier to find money for a project because it's just a one off. If you give someone a pay rise then you have to pay it this year, next year and for ever more (and you probably have to pay another pay rise and so on)

 

Even a pretty small pay rise costs a lot of money across everyone who gets it. Suppose you give 2% to every one and they have an average pay of £20,000. I think there are about 5000 secondary schools in the UK and lets say that they employ about 75 people each. That pay rise costs £150 million pounds which is quite a lot of money. Scale this up to all public sector employees and you're spending a very large amount of money which I'd guess is one reason why politicians start calling for a public sector pay freeze.

[torledo]

It's always going to be difficult when you can see big money being spent on "projects" but no money for even minor pay rises. You then get told "ah, yes - but that's capital funding and we can't use it for salaries" and at that point I get ready to explode; why can't we move money between the pots??

 

I think (and I don't know - it's just speculation) that it's often easier to find money for a project because it's just a one off. If you give someone a pay rise then you have to pay it this year, next year and for ever more (and you probably have to pay another pay rise and so on)

 

Even a pretty small pay rise costs a lot of money across everyone who gets it. Suppose you give 2% to every one and they have an average pay of £20,000. I think there are about 5000 secondary schools in the UK and lets say that they employ about 75 people each. That pay rise costs £150 million pounds which is quite a lot of money. Scale this up to all public sector employees and you're spending a very large amount of money which I'd guess is one reason why politicians start calling for a public sector pay freeze.

 

yes, the cumulative effect of small pay increases can be substantial, plus the on-costs of retaining staff and providing jobs alone is a serious outlay. I guess it's more convenient to make short, sharp spending commitments that get burned up rather than longer term commitments in staff and pay progression.

 

but i'm with you in being frustrated by the nature of capital vs salary spending.

 

How much salary spending is, for instance, going into maintaining a costly 'grey ceiling' which restricts opportunities for progression of younger staff on lower pay grades ? This goes back to what i was saying about who really is affected by these pay awards....

 

then with revenue, why can't it be that projects and funds are bid for, with detailed costings and ideas behind them......rather than the scattergun 'here's 100k, you've got 6 months to spend it.' And then you've got people coming on the forum saying, 'i've got all this dough...any ideas'. That's not me having a go at these people, it just strikes me as a somewhat unintuitive way of going about allocating funds. But then i'm sure all this has been said before.

[sippo]

So no increase of living payment this year, yet our local council are putting up council tax!

[localzuk]

So no increase of living payment this year, yet our local council are putting up council tax!

 

They've gotta pay for all that grit somehow!