I think Angela Merkel would suggest that it's more like the Greeks are still paying down the debt on the car and have already lost the job. Should they refuse to pay back any of the existing loan and instead borrow from Wonga to pay for repairs, or should they settle the debt on the car and move to somewhere cheaper and more accessible?
Many commentators are saying that the debt hasn't paid for much infrastructure/investment - much of it has gone to public sector current spending. I'm not sure whether Syriza are planning capital investment or more current spending.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
I guess the answer depends on what you have to give up in both scenarios. If repairing the car means new loan repayments that means no new clothes for three months and unemployment means starving to death then I guess you take the loan and suck it up.
If unemployment comes with a guarantee that you will never go without then you would sit and watch Jeremy Kyle all day long.
Ultimately, however, there is a lot more to working than just getting paid. Standing on one's own feet, opposed to living off handouts, appeals to some people, and not others.
Where the situation in Greece has got so bad is that the proportion of those that are net contributors is too small. From those that don't work to those that just don't pay tax, they have way too few that are trying to pay for way too many. Borrowing to cover the shortfall only works until the lender says no more then it all falls over.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
Austerity only has an impact on things which rely on Government spending, not what you spend. It means less money (in theory) is spent on public services,and (perhaps) less capital spending on infrastructure (this is where the parties differ). The idea that austerity is about making us poorer is completely wrong. The last thing government wants is the earnings of anyone, rich or poor not to rise.
Disposable income of the low paid has increased as a result of progressive LibDem tax revisions, and more tax is paid by the higher earners. The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages). Wishing those in the financial sector suffered more pain is OK, but their higher earnings bring in tax and it is not as easy as some might think to apply suffering to particular sections of society outside a fascist state.
Stagnant wage levels in the UK is not the fault of the wealthy, however convenient the argument, the current phenomenon of low wages is only being seen in the UK. How does the UK labour force, and its source of labour differ from other European nations? I leave you to draw your own conclusions, but it is not the direct effect of reduced public spending (austerity), nor is it the wish of government, it is only perpetuating the need for austerity measures.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
Too freaking right we would. What a ridiculous statement to make when this government is currently in dispute with the whole of those in the NHS for example over agreeing to implement an independently assessed 1% rise.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
There are wage freezes and wage freezes though. Public sector wage freezes are a little different from most. They may not have received annual "inflation-linked" increases but many will have carried on receiving increases linked to the number of years service they have put in. On average, public sector pay is still higher than private sector pay - £487 per week as against £468 as at May 2014. But the gap is narrowing and may continue to do so. It's almost gone for men but not so for women.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
There are wage freezes and wage freezes though. Public sector wage freezes are a little different from most. They may not have received annual "inflation-linked" increases but many will have carried on receiving increases linked to the number of years service they have put in. On average, public sector pay is still higher than private sector pay - £487 per week as against £468 as at May 2014. But the gap is narrowing and may continue to do so. It's almost gone for men but not so for women.
...but most have received neither an annual increment reflecting greater experience, knowledge, responsibility, etc, nor a straight cost of living increase.
There are a lot of low paid, low skilled jobs in the public sector but people rather conveniently seem to forget that many public sector jobs are also in fact highly skilled, demanding, difficult to fill roles requiring at least degree level education with experience.
I don't know of a single colleague in my area of work for example who has left the public sector to pursue a career in an equivalent role in the private sector who is now earning less than they were, plus of course they have additional packages such as company cars, bonuses, paid travel, staff discount, etc. I know I could earn myself probably an extra £5-£10k overnight going down that route but I have different motivators.
My point is, it's not as easy to just look at average wages between the two and draw conclusions.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
Too freaking right we would. What a ridiculous statement to make when this government is currently in dispute with the whole of those in the NHS for example over agreeing to implement an independently assessed 1% rise.
Not saying wages haven't been controlled, I'm saying the austerity POLICY is to reduce public spending, that is not the same as saying the POLICY is to reduce wages. The amount being spent on wage increases in the Public sector over recent years is more than the private sector, that's fact. If it's being distributed unfairly OK, have a moan, but facts are facts, you are no worse off than most in the private sector.
Add on the 40% of pay (compared to the 3% most private sector employees get) to fund your pension (less the "outrageous" contributions some have to pay), and you are way above the mark in terms of employment rewards. Many PS workers appear not to value them and constantly play the victim, but let's not open old wounds and just agree to differ.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
Too freaking right we would. What a ridiculous statement to make when this government is currently in dispute with the whole of those in the NHS for example over agreeing to implement an independently assessed 1% rise.
Not saying wages haven't been controlled, I'm saying the austerity POLICY is to reduce public spending, that is not the same as saying the POLICY is to reduce wages. The amount being spent on wage increases in the Public sector over recent years is more than the private sector, that's fact. If it's being distributed unfairly OK, have a moan, but facts are facts, you are no worse off than most in the private sector.
Add on the 40% of pay (compared to the 3% most private sector employees get) to fund your pension (less the "outrageous" contributions some have to pay), and you are way above the mark in terms of employment rewards. Many PS workers appear not to value them and constantly play the victim, but let's not open old wounds and just agree to differ.
Yeah I think if you are going to start quoting joke figures like 40% of my salary going into the funded local authority pension scheme I think maybe we shouldn't go down that road.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
Too freaking right we would. What a ridiculous statement to make when this government is currently in dispute with the whole of those in the NHS for example over agreeing to implement an independently assessed 1% rise.
Add on the 40% of pay (compared to the 3% most private sector employees get) to fund your pension (less the "outrageous" contributions some have to pay), and you are way above the mark in terms of employment rewards.
Where on earth do you get those figures from?
Having worked in the public, private and now the third sector, I've never seen pension contribution figures either as low or as high as that. They've always been between the 7% and 15% levels.
Having worked in the public, private and now the third sector, I've never seen pension contribution figures either as low or as high as that. They've always been between the 7% and 15% levels.
But then 15% of fuck all is still fuck all.
People think the contribution for a defined benefit pension is the cost. It's not. You don't know the cost until you've retired, been paid your pension and died. LGPS fund only has enough money to meet 75% of liabilities on conventional assumptions and is paying 19% contribution. It is hoping that market returns will make up the gap. So if you want to know what is the amount needed to fund the pension you look at the cash you need to pay assuming you get a guaranteed return, i.e lending to the government, which gives about 2% above inflation. LGPS probably needs 6% above inflation solid over 20 years. So the difference between a 2% real return and a 6% real return needs to be added to the 19% as cash if you want a realistic cost that doesn't gamble on getting returns from the equity market.
If you think its a joke just get an actuary to tell you how much you should contribute to guarantee you will get the equivalent of one year's accrual of public sector pension. You could only rely on gilt returns if you want certainty, so you can't assume the cost can be subsidised by equity return. The cash you need to pay would vary according to how old you are, ranging from roughly 12% in your early twenties to 50%+ as you get near to retirement. It's nothing more than the effect of compound interest. Over a career it would certainly average 30%+. I have seen the figures when employers have had to calculate their pension exposure on promising matching public sector pensions on TUPE transfers under PFI.
And you're assuming that the public sector is still offering final salary schemes.
Guess what? The majority of them aren't any more.
I'm not assuming anything, I'm working on the facts, something that public sector employees seem to shun. I referred to a "defined benefit" not "final salary". For new employees, and service after 2008, it's now called a career average salary, just a different name, different calculation that gives a higher pension if your salary only goes up in line with inflation. It's now possible to get a pension of over 70% of your final salary, used to be capped at 66%.
I was ridiculed on here a while ago for suggesting the pension robbery was a myth. Well guess what, Greenwich Borough Council have had to create a web page for staff countering the pension myths. Here is what they say about the myth of the new career average salary scheme being worse than final salary;
A career average scheme isn’t as good as a final salary scheme
For some members the benefits built up from April 2014 in the career average scheme will be better than those they would have built up if the Scheme remained a final salary scheme.
A career average scheme is often a better fit for those members whose opportunity for promotion is limited or who have a short period of service in the Scheme. Final salary tends to suit some career patterns, usually those with promotion opportunities. Each individual will have their own circumstances but it’s incorrect to suggest that a career average scheme isn’t as good as a final salary scheme.
In fact, the improved rate at which pension builds up from April 2014 could mean that some members build up better pensions. Ultimately the Scheme is still a defined benefit pension scheme, but one which is career average rather than final salary.
To find out more, please check out the section, ‘How does the LGPS 2014 work?'
The reason GBC have to counter myths about employees being robbed is because of the rhetoric used by Unions to extort higher pensions by pretending employees were worse off. The legacy is that most public sector employees think they have been shafted, show outrage at any suggestion otherwise and even take to the streets with slogans about pension robbery. Just having a laugh at our expense. What irony that the Unions can't stand up and declare a great success in having negotiated an improvement in employees' pension rights. There again, if they enlightened their membership they might not have an alternative excuse for calling the sheep out on strike.
.but most have received neither an annual increment reflecting greater experience, knowledge, responsibility, etc, nor a straight cost of living increase.
Welcome to the real world. Cost of living increase indeed.
And you're assuming that the public sector is still offering final salary schemes.
Guess what? The majority of them aren't any more.
I'm not assuming anything, I'm working on the facts, something that public sector employees seem to shun. I referred to a "defined benefit" not "final salary". For new employees, and service after 2008, it's now called a career average salary, just a different name, different calculation that gives a higher pension if your salary only goes up in line with inflation. It's now possible to get a pension of over 70% of your final salary, used to be capped at 66%.
I was ridiculed on here a while ago for suggesting the pension robbery was a myth. Well guess what, Greenwich Borough Council have had to create a web page for staff countering the pension myths. Here is what they say about the myth of the new career average salary scheme being worse than final salary;
A career average scheme isn’t as good as a final salary scheme
For some members the benefits built up from April 2014 in the career average scheme will be better than those they would have built up if the Scheme remained a final salary scheme.
A career average scheme is often a better fit for those members whose opportunity for promotion is limited or who have a short period of service in the Scheme. Final salary tends to suit some career patterns, usually those with promotion opportunities. Each individual will have their own circumstances but it’s incorrect to suggest that a career average scheme isn’t as good as a final salary scheme.
In fact, the improved rate at which pension builds up from April 2014 could mean that some members build up better pensions. Ultimately the Scheme is still a defined benefit pension scheme, but one which is career average rather than final salary.
To find out more, please check out the section, ‘How does the LGPS 2014 work?'
The reason GBC have to counter myths about employees being robbed is because of the rhetoric used by Unions to extort higher pensions by pretending employees were worse off. The legacy is that most public sector employees think they have been shafted, show outrage at any suggestion otherwise and even take to the streets with slogans about pension robbery. Just having a laugh at our expense. What irony that the Unions can't stand up and declare a great success in having negotiated an improvement in employees' pension rights. There again, if they enlightened their membership they might not have an alternative excuse for calling the sheep out on strike.
For a bloke that's not "bashing the public sector" you're doing a very good impression. Have a think about the language you use to describe ordinary people doing their best to provide for themselves and their families maybe?
Ignoring your obvious right wing bias you're actually factually incorrect in many places. It's Saturday morning and I can't be bothered to counter them all but for example you've stated in a pejorative manner that the returns on the LGPS needs to be around 6% above inflation to be viable. As if this is some unachievable fantasy. Along with other defined benefit funds however it returned around 11% last year, is at a five year average of 9% and is trotting along very comfortably.
UK public sector pay and pensions is only vaguely related to the original thread topic of course but it hasn't stopped some using the situation in Greece as a stick to beat their pay restraint drum...more relevant is what it's going to do the price of ambrosia that the town hall trolley lady brings to our corpulent desks.
Countering Union propaganda does not make me right wing.
I could get a public sector pension for £2 a week if I relied on winning the lottery and had someone to pay for it if i didn't win the lottery, otherwise I have to pay the going rate.
I'm bashing the sheer ignorance of public sector workers regarding the value of their pension. End of.
Can you show me the post where anyone has said their pension has been robbed?
The post that public sector workers have had continuous pay rises regardless was queried and suddenly their 'gilt edged' pensions was bought into the equation because the original poster was wrong.
The fact remains that's bloc sector workers have had a four year freeze on pay rises. LGPS were generally better than private pensions, but they have generally now finished for new employees.
And if you are a jealous private sector worker who's pension might not measure up, you could always increase your own contributions or put your annual bonus into the pot. You could even claim the extra tax back from that nice Mr Osbourne.
Hang on @Dippenhall. That's not how debate works. You can't just respond to someone's point by arrogantly claiming they are digging a hole without coming up with a counter-argument.
What irritates me about this whole debate is the way nearly everyone getting involved in it seems to think it's totally black or white. You referred to statements/claims made by the unions and the establishment earlier, but you described the unions statements as "rhetoric...used to extort...pretending" while the Royal Borough of Greenwich you describe as being "forced into countering myths". Oh such heroic council officials, bravely battling against the evil Union overlords. Do me a favour. Even you must be able to see that your claims of public employees being sheep that follow any line given by their unions, seems a bit rich when you're equally inclined to swallow one half of the story hook line and sinker while simultaneously rubbishing the opponent to your point of view. The irony would be lovely if it wasn't such a serious debate. (And you can't come back with "I'm only dealing in facts" because so are those arguing the opposite, you just interpret them differently.) The fact is, the truth (as is nearly always the case) lies somewhere between the two polar opposite positions, but your dismissive attitude towards the people directly affected by the public pensions debate is, at best rude and at worst insulting. Yes, we're all affected, but there's no need for that.
The debate will rumble on and many with more political insight than I will contribute on both sides (possibly including you) but I really do think you need to wind your neck in.
I do understand the reasons for austerity - you can't spend what you don't have. Not indefinitely anyway. But what I don't get is that during this period of austerity, rich people have got richer. Surely everybody should be getting proportionately poorer and do their bit. Even more galling is that many of the people responsible for the crash are amongst those getting richer. Somebody surely has to stand up against this.
Maybe there is a point where people won't take any more and Greece has reached it. Of course, Germany won't want this to end well as it will set an example......but they won't want it to end badly for the implcations to the Eurozone. What a mess.
An analogy that fits Greece is: If I rely on a car to get me to work (when there is no bus or train alternative) and it breaks down and I can't afford the reapirs, what makes most financial sense: borrow to pay for my car to be repaired….? Or pack in my job and become unemployed?
The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages)..
I think those Public Sector workers who have had a wage freeze for the past four years might disagree with that statement.
this government is currently in dispute with the whole of those in the NHS for example over agreeing to implement an independently assessed 1% rise.
This conflict over the one % looks like utter madness so close to an election and against and independent assessment.
Huge crowds today in Madrid for Podemos rally. They are looking in a really strong position to win this year's election. Interesting times ahead here...
Lord Romford, I doubt if anyone wants to see a private debate between a couple of bores on the misinformation around public sector pensions which I inadvertently started but, if so, I suggest they start a new thread. As pensions is my day job and don't feel I have to justify what I see as truths, I'm happy to let it drop, or happy to have a civilised exchange of views from different sides of the debate (without any of the insulting stuff, which was not intended to be taken personally, but for which I apologise).
Lord Romford, I doubt if anyone wants to see a private debate between a couple of bores on the misinformation around public sector pensions which I inadvertently started but, if so, I suggest they start a new thread. As pensions is my day job and don't feel I have to justify what I see as truths, I'm happy to let it drop, or happy to have a civilised exchange of views from different sides of the debate (without any of the insulting stuff, which was not intended to be taken personally, but for which I apologise).
Fair dos Dippy. It's an emotive debate because it affects people and their future security. I do get where you're coming from, and you make some interesting points even if I don't necessarily agree with all of them.
The day Greece leaves the Euro and I think it will be soon it will be interesting in the next 2 years how they would pan out. They would have to have a currency devaluation which means cheaper holidays for all of us and Greece's main income is Tourism.
Iceland had a massive problem 2008 and the volcancic eruption did not help but they picked themselves up and I really think Greece could do the same.
Once Greece has become successful, the Mediterranean countries would follow suit and twe can finally say goodbye to the EU which can only be a good thing.
The day Greece leaves the Euro and I think it will be soon it will be interesting in the next 2 years how they would pan out. They would have to have a currency devaluation which means cheaper holidays for all of us and Greece's main income is Tourism.
Iceland had a massive problem 2008 and the volcancic eruption did not help but they picked themselves up and I really think Greece could do the same.
Once Greece has become successful, the Mediterranean countries would follow suit and twe can finally say goodbye to the EU which can only be a good thing.
Sounds great, what a plan.
Oh, hold on.
The Greeks would STILL OWE billions to lenders and if they did not cough up (with a now devalued currency) then they would not get any more cash from anyone and would go into meltdown.
See Argentina for what happens when you take this road - and Iceland is in serious trouble too.
Comments
Many commentators are saying that the debt hasn't paid for much infrastructure/investment - much of it has gone to public sector current spending. I'm not sure whether Syriza are planning capital investment or more current spending.
If unemployment comes with a guarantee that you will never go without then you would sit and watch Jeremy Kyle all day long.
Ultimately, however, there is a lot more to working than just getting paid. Standing on one's own feet, opposed to living off handouts, appeals to some people, and not others.
Where the situation in Greece has got so bad is that the proportion of those that are net contributors is too small. From those that don't work to those that just don't pay tax, they have way too few that are trying to pay for way too many. Borrowing to cover the shortfall only works until the lender says no more then it all falls over.
Disposable income of the low paid has increased as a result of progressive LibDem tax revisions, and more tax is paid by the higher earners. The problem is that wages generally have stagnated, apart from wages in the public sector, and those in the financial sector. (Not bashing public sector, just giving evidence that government does not have a policy of constraining wages). Wishing those in the financial sector suffered more pain is OK, but their higher earnings bring in tax and it is not as easy as some might think to apply suffering to particular sections of society outside a fascist state.
Stagnant wage levels in the UK is not the fault of the wealthy, however convenient the argument, the current phenomenon of low wages is only being seen in the UK. How does the UK labour force, and its source of labour differ from other European nations? I leave you to draw your own conclusions, but it is not the direct effect of reduced public spending (austerity), nor is it the wish of government, it is only perpetuating the need for austerity measures.
There are a lot of low paid, low skilled jobs in the public sector but people rather conveniently seem to forget that many public sector jobs are also in fact highly skilled, demanding, difficult to fill roles requiring at least degree level education with experience.
I don't know of a single colleague in my area of work for example who has left the public sector to pursue a career in an equivalent role in the private sector who is now earning less than they were, plus of course they have additional packages such as company cars, bonuses, paid travel, staff discount, etc. I know I could earn myself probably an extra £5-£10k overnight going down that route but I have different motivators.
My point is, it's not as easy to just look at average wages between the two and draw conclusions.
Add on the 40% of pay (compared to the 3% most private sector employees get) to fund your pension (less the "outrageous" contributions some have to pay), and you are way above the mark in terms of employment rewards. Many PS workers appear not to value them and constantly play the victim, but let's not open old wounds and just agree to differ.
Having worked in the public, private and now the third sector, I've never seen pension contribution figures either as low or as high as that. They've always been between the 7% and 15% levels.
But then 15% of fuck all is still fuck all.
I've seen (but not received) over 35% - that was private sector.
Where on earth do you get those figures from?
Having worked in the public, private and now the third sector, I've never seen pension contribution figures either as low or as high as that. They've always been between the 7% and 15% levels.
But then 15% of fuck all is still fuck all.
People think the contribution for a defined benefit pension is the cost. It's not. You don't know the cost until you've retired, been paid your pension and died. LGPS fund only has enough money to meet 75% of liabilities on conventional assumptions and is paying 19% contribution. It is hoping that market returns will make up the gap. So if you want to know what is the amount needed to fund the pension you look at the cash you need to pay assuming you get a guaranteed return, i.e lending to the government, which gives about 2% above inflation. LGPS probably needs 6% above inflation solid over 20 years. So the difference between a 2% real return and a 6% real return needs to be added to the 19% as cash if you want a realistic cost that doesn't gamble on getting returns from the equity market.
If you think its a joke just get an actuary to tell you how much you should contribute to guarantee you will get the equivalent of one year's accrual of public sector pension. You could only rely on gilt returns if you want certainty, so you can't assume the cost can be subsidised by equity return. The cash you need to pay would vary according to how old you are, ranging from roughly 12% in your early twenties to 50%+ as you get near to retirement. It's nothing more than the effect of compound interest. Over a career it would certainly average 30%+. I have seen the figures when employers have had to calculate their pension exposure on promising matching public sector pensions on TUPE transfers under PFI.
Guess what? The majority of them aren't any more.
I was ridiculed on here a while ago for suggesting the pension robbery was a myth. Well guess what, Greenwich Borough Council have had to create a web page for staff countering the pension myths. Here is what they say about the myth of the new career average salary scheme being worse than final salary;
A career average scheme isn’t as good as a final salary scheme
For some members the benefits built up from April 2014 in the career average scheme will be better than those they would have built up if the Scheme remained a final salary scheme.
A career average scheme is often a better fit for those members whose opportunity for promotion is limited or who have a short period of service in the Scheme. Final salary tends to suit some career patterns, usually those with promotion opportunities. Each individual will have their own circumstances but it’s incorrect to suggest that a career average scheme isn’t as good as a final salary scheme.
In fact, the improved rate at which pension builds up from April 2014 could mean that some members build up better pensions. Ultimately the Scheme is still a defined benefit pension scheme, but one which is career average rather than final salary.
To find out more, please check out the section, ‘How does the LGPS 2014 work?'
The reason GBC have to counter myths about employees being robbed is because of the rhetoric used by Unions to extort higher pensions by pretending employees were worse off. The legacy is that most public sector employees think they have been shafted, show outrage at any suggestion otherwise and even take to the streets with slogans about pension robbery. Just having a laugh at our expense. What irony that the Unions can't stand up and declare a great success in having negotiated an improvement in employees' pension rights. There again, if they enlightened their membership they might not have an alternative excuse for calling the sheep out on strike.
Welcome to the real world. Cost of living increase indeed.
Ignoring your obvious right wing bias you're actually factually incorrect in many places. It's Saturday morning and I can't be bothered to counter them all but for example you've stated in a pejorative manner that the returns on the LGPS needs to be around 6% above inflation to be viable. As if this is some unachievable fantasy. Along with other defined benefit funds however it returned around 11% last year, is at a five year average of 9% and is trotting along very comfortably.
ipe.com/countries/uk/uk-defined-benefit-pension-funds-return-11-in-2014-state-street/10006345.fullarticle
UK public sector pay and pensions is only vaguely related to the original thread topic of course but it hasn't stopped some using the situation in Greece as a stick to beat their pay restraint drum...more relevant is what it's going to do the price of ambrosia that the town hall trolley lady brings to our corpulent desks.
Countering Union propaganda does not make me right wing.
I could get a public sector pension for £2 a week if I relied on winning the lottery and had someone to pay for it if i didn't win the lottery, otherwise I have to pay the going rate.
I'm bashing the sheer ignorance of public sector workers regarding the value of their pension. End of.
The post that public sector workers have had continuous pay rises regardless was queried and suddenly their 'gilt edged' pensions was bought into the equation because the original poster was wrong.
The fact remains that's bloc sector workers have had a four year freeze on pay rises. LGPS were generally better than private pensions, but they have generally now finished for new employees.
And if you are a jealous private sector worker who's pension might not measure up, you could always increase your own contributions or put your annual bonus into the pot. You could even claim the extra tax back from that nice Mr Osbourne.
My private pensions have always out performed my old LGPS - and for several years, by just under 100%.
What irritates me about this whole debate is the way nearly everyone getting involved in it seems to think it's totally black or white. You referred to statements/claims made by the unions and the establishment earlier, but you described the unions statements as "rhetoric...used to extort...pretending" while the Royal Borough of Greenwich you describe as being "forced into countering myths".
Oh such heroic council officials, bravely battling against the evil Union overlords. Do me a favour.
Even you must be able to see that your claims of public employees being sheep that follow any line given by their unions, seems a bit rich when you're equally inclined to swallow one half of the story hook line and sinker while simultaneously rubbishing the opponent to your point of view. The irony would be lovely if it wasn't such a serious debate. (And you can't come back with "I'm only dealing in facts" because so are those arguing the opposite, you just interpret them differently.)
The fact is, the truth (as is nearly always the case) lies somewhere between the two polar opposite positions, but your dismissive attitude towards the people directly affected by the public pensions debate is, at best rude and at worst insulting. Yes, we're all affected, but there's no need for that.
The debate will rumble on and many with more political insight than I will contribute on both sides (possibly including you) but I really do think you need to wind your neck in.
That's right isn't it?!?
Iceland had a massive problem 2008 and the volcancic eruption did not help but they picked themselves up and I really think Greece could do the same.
Once Greece has become successful, the Mediterranean countries would follow suit and twe can finally say goodbye to the EU which can only be a good thing.
Oh, hold on.
The Greeks would STILL OWE billions to lenders and if they did not cough up (with a now devalued currency) then they would not get any more cash from anyone and would go into meltdown.
See Argentina for what happens when you take this road - and Iceland is in serious trouble too.