IT IS hard to talk about public policy in Ireland because, when everybody knows the truth, there's nothing to discuss. Everybody knows, for example, that public servants in Ireland are overpaid. We hold this truth to be self-evident, so axiomatic that you don't actually have to bother with the evidence. It is beyond rational dispute, writes FINTAN O'TOOLE
Consider, for instance, a recent appearance on Morning Irelandby Peter Sutherland, who is accorded oracular status by RTÉ. Cathal MacCoille introduced him as "not a voice that can be easily ignored", alerting listeners to the fact what they were about to hear was no ordinary contribution to an ideological debate, but a very special insight. Sutherland, of course, is special: he is never asked about his years on the boards of Allied Irish Banks or Royal Bank of Scotland. The subject of Goldman Sachs's role in helping the Greek government to mask the true extent of its deficit is off limits. His position as a public service pensioner, pulling in €52,000 a year while calling for more austerity, is not raised.
Anyhow, Sutherland had the following to say about the need to cut public sector pay: "Obviously pay is part of the issues that have to be looked at. My view is that wherever our costs are out of line with the European average, which they apparently are, I can't identify specific areas of the public sector or public services or any other area where this arises,but where they are – and the ECB seems to think they are – then we have to bring them down to a level which is no greater than the level which, for an example, is to be provided in other countries with which we have to compete." (Obviously, the italics are mine.)
What’s interesting here is the explicit lack of evidence for the basic proposition that levels of pay in the Irish public service are out of line with other developed economies. But this vagueness does not diminish the magisterial self-confidence of the pronouncement. Who needs evidence when the proposition is so obviously true?
So let’s do something strange and actually look at the evidence. Is public sector pay in Ireland out of line with that elsewhere in the developed world? The evidence – as opposed to the axiomatic “truth” – suggests that with two obvious exceptions, it isn’t.
The best source for comparisons in this area is the Organisation for Economic Co-operation and Development's Government at a Glance 2011. The OECD figures are useful because they use so-called "purchasing power parity" – what your salary actually buys you in the real world. So what do they tell us? The starting salary for Irish teachers in 2008 was almost exactly the OECD average – but that was before pay cuts and the pension levy, which have reduced the salary by about 14 per cent. Nurses' pay was about the same as that in the UK, Australia, or Norway, somewhat higher than in Finland, Germany or Japan and much lower than in the US. But that was before the 14 per cent of cuts since 2008. Given those cuts, it is almost certainly true that the real pay of teachers and nurses is in line with or below that in other developed economies.
For second-rank managers in central government departments, the level of compensation (adjusted for social contributions and length of holidays) is almost exactly at the OECD average, behind such countries as Australia, Austria and Chile, way behind the UK and US, and slightly ahead of countries such as Norway and Spain. Middle managers are slightly ahead of the OECD average. But secretarial workers are significantly below the international norm. Economists and statisticians, amusingly, do quite well, coming out somewhat higher than the OECD average.
Broadly speaking, what the figures tell us is the vast bulk of public servants in Ireland are not getting salaries and benefits much higher than international norms and that, given the cuts since 2008, many of them are well below those norms. But there are two glaring exceptions.
Public service salaries for medical specialists (ie consultants) are almost off the charts when compared to the rest of the OECD (though again the figures used are from 2008, before the cuts). And top level central government managers (ie departmental secretaries) are very well paid by international standards, even after the pay cuts. They are not the best paid by any means – Italy, Britain, New Zealand and Belgium all pay their top officials more – but they do very well indeed.
What we’ve got, then, are two particular groups at the top for whom the evidence supports the notion of public servants being overpaid by international standards. For pretty much everybody else, the evidence doesn’t stack up. But in that case, the evidence becomes irrelevant. What matters is what is “apparently” true, even when you “can’t identify specific areas of the public sector or public services or any other area where this arises”.
We have, of course, plenty of practice at repeating self-evident truths. It saves a lot of bother and, sure, didn’t it get us where we are today?