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Some jobs are better suited to collective bargaining than others. A decent software engineer or financial trader can be worth 100x a crap one. But this doesn't apply to most railway grades. Someone who meets the minimum standards for being a train driver is not going to be that different to the best possible train driver. So individual negotiation, given than most people aren't that good at it and there being a big gap in power between employer and employee is very much not in the employee's interest, even the best ones!
Agree. Where the job is very tightly defined and should be done in one specific way (e.g. train driving/guarding, working on the till at Tesco, being a cashier at a bank) it makes sense to have collective bargaining, but in professional type roles where effectiveness and skill can vary massively it makes more sense to work out pay individually based on how the individual employee actually performs.
From what I can tell, no such consideration has been made by the IFS. If it has, they've not shown their methodology. It very much appears that they've simply looked at mean earnings in the public sector and mean earnings in the private sector and compared the two.
Within the private sector, a lawyer working 'in-house' is likely to earn less than one at a 'city law firm', but doesn't have anything like the same pressure to earn fees. They both contribute to the private sector average.
It's interesting to look at the dataset linked to by @JamesT
Looking at the private sector for May 2024, to choose at random, the mean average for a private sector worker in 'financial and business services' is £896pw but in 'wholesaling, retailing, hotels & restaurants' it is £451pw. The overall average in the private sector is £679pw.
So it goes to show how lots and lots of people on very low wages in one sector can drag down the overall mean average by quite a noticeable margin.
You don't get the very low paid staff in the public sector- cleaners, catering staff, care workers, refuse workers, construction workers, etc, were outsourced 30 years ago or more. The public sector is now very much largely based around 'professional' jobs, for want of a better description.
Yet, despite all that, the overall mean average in the public sector is £673pw- less than in the private sector.
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in professional type roles where effectiveness and skill can vary massively it makes more sense to work out pay individually based on how the individual employee actually performs.
It's an interesting one. Where I work we have performance-related pay within a broad pay band. I'm fortunate in that I'm towards the top of that broad pay band whereas some of my colleagues are towards the bottom. The difference between the top and bottom of the pay band is about £20,000pa. The requirements for each pay band are clearly defined and, the more money you earn, the more responsibility you have. Obviously I think it is fair and transparent and I know where I stand- I earn more but do more. My colleague earning £20,000 less than me for what is the same job title may not agree.
I do think jobs should have defined pay bands though, both in the private sector and in the public sector. It prevents the most egregious exploitation of employees and it leaves everyone knowing exactly where they stand. Working previously in the private sector I've seen it too much where every job advertisement salary is marketed as '£competitive' or '£negotiable' and it's just a waste of everyone's time.
It's not much of a negotiating position though is it? "Please increase my pay, I didn't do anything dangerous". Or put another way, you can't do the job brilliantly. At least from an economics perspective. Just well, adequately, or badly.
Compared to the trader or engineer examples who can (at the top) say "I made you a gazillion pounds next year, if you want me to next year you'd better step up". And if negotiations fail, they can easily move onto one of hundreds more employers who will.
Staff in that sort of role would be a fool to bargain pay individually as opposed to collectively. And the successes of the rail unions, as annoying as they are for everyone else, are testament to that.
Quite! I’d never suggest it either. Nor can I see anyway to monetise similar issues which put staff the right side of the 90/10 rule that says 90% of personnel management time is used managing 10% of employees!
It's not much of a negotiating position though is it? "Please increase my pay, I didn't do anything dangerous". Or put another way, you can't do the job brilliantly. At least from an economics perspective. Just well, adequately, or badly.
Compared to the trader or engineer examples who can (at the top) say "I made you a gazillion pounds next year, if you want me to next year you'd better step up". And if negotiations fail, they can easily move onto one of hundreds more employers who will.
Staff in that sort of role would be a fool to bargain pay individually as opposed to collectively. And the successes of the rail unions, as annoying as they are for everyone else, are testament to that.
Indeed. As a driver you are underperforming if you have any incidents, and if have too many you will be removed from the grade. A good driver has no incidents and neither does an exceptional one.
Some TOCs do have quarterly attendance bonuses, which makes sense as an easily measurable differentiator.
So they can be vetoed by a union until they have coerced a pay off. Which delays improvements and makes many unviable. I’m thinking normal stuff, not that nasty no notice rota changes - that’s a safety issue.
So individual negotiation, given than most people aren't that good at it and there being a big gap in power between employer and employee is very much not in the employee's interest, even the best ones!
Negotiation? The employer sets the pay to what they need to pay to recruit, retain, and motivate, the right number of people. Turnover hurts a business - the better people leave, the worst stay, and you have too many people who are unproductive due to being new or having To train the new people. Demotivated staff hurt the business. Personally I was much more motivated when I knew I was getting paid more than the shirkers and less competent
Negotiation? The employer sets the pay to what they need to pay to recruit, retain, and motivate, the right number of people. Turnover hurts a business - the better people leave, the worst stay, and you have too many people who are unproductive due to being new or having To train the new people. Demotivated staff hurt the business. Personally I was much more motivated when I knew I was getting paid more than the shirkers and less competent
Given that hundreds apply for every train driver role, the employers could quite easily halve pay I suspect and still recruit enough. You are describing basic supply and demand without mentioning surpluses!
It's almost always in employees' interest to negotiate, where's the surprise in that? You sound as though, like me, you're in a job where you can negotiate as an individual based on individual performance. That's just not practical for most railway jobs.
(And I couldn't give a stuff what anyone else is making, even though as someone in a senior position in a startup they are directly taking money off future Egg Centric!)
Nope. originally the company had flat rate pay rises, which was miserable, then they changed to performance related distribution of pots. Ie there was a company wide pay rise pot, split down until your team had a pot, and then the manager would allocate it. Individuals were in pay bands based on responsibility/skills. The pay bands moved up with pay rises and you couldn’t go out the top.
You didn’t negotiate , you just did a good job, and you left if you were really unhappy (or shirked if only mildly unhappy), or at least you hinted you might leave…..
So they can be vetoed by a union until they have coerced a pay off. Which delays improvements and makes many unviable. I’m thinking normal stuff, not that nasty no notice rota changes - that’s a safety issue.
Who benefits from the “improvements” you mention, and who decides what’s “viable”? I’m guessing the answer to both is the employer.
Again, your choice of language just reveals your own bias. You’re apparently fine with employers just imposing changes, yet you describe unions negotiating as “arguing”, and “coercing pay offs”, as if employees being able to negotiate and perhaps receiving payment for changed Ts and Cs is somehow immoral or improper.
Nope. originally the company had flat rate pay rises, which was miserable, then they changed to performance related distribution of pots. Ie there was a company wide pay rise pot, split down until your team had a pot, and then the manager would allocate it. Individuals were in pay bands based on responsibility/skills. The pay bands moved up with pay rises and you couldn’t go out the top.
You didn’t negotiate , you just did a good job, and you left if you were really unhappy (or shirked if only mildly unhappy), or at least you hinted you might leave…..
In other words you and your colleagues had no agency or ability to improve things, you just put up with whatever your employer dictated and had to leave if you weren’t happy. Such is the plight of many employees in the UK these days. Fine if you have a decent employer, but many don’t.
Thankfully rail workers are more empowered. Having worked in both environments myself, and “done a good job” in both, the railway is the one I will be sticking to.
Given that hundreds apply for every train driver role, the employers could quite easily halve pay I suspect and still recruit enough. You are describing basic supply and demand without mentioning surpluses!
In other words you and your colleagues had no agency or ability to improve things, you just put up with whatever your employer dictated and had to leave if you weren’t happy.
We improved things ourselves and got rewarded for making the effort. And if you were a good employee they tried to keep you, and had the flexibility to reward you accordingly.
Felt much more empowered than if I got paid the same as the grumpy shirkers and they could block improvements.
The railway pension is largely in surplus AIUI. The discussions around changing it are generally ideological along the “I don’t get it, neither should you” lines. (Didn't the government force a review of the TfL pension as a condition of one of the funding bailouts and find it to be in good health?). Nothing has been said about the national rail side, even during the last dispute, which suggests it wasn’t a high priority.
The problem is it is in surplus *now* - which many private sector ones were for many years.
Then a combination of increased life expectancy, plus the consequences of the actions of two "socialists" - Robert Maxwell who plundered the MGN scheme which led to increased funding and costly regulation and Gordon Brown who mounted a tax raid (which he was advised not to do - evidence here
Gordon Brown was warned by officials that he risked long term damage to Britain's occupational pensions industry when he pressed ahead with a £5bn a year cut in tax relief in his first budget.
www.theguardian.com
Gordon Brown was warned by officials that he risked long term damage to Britain's occupational pensions industry when he pressed ahead with a £5bn a year cut in tax relief in his first budget.
meant they were no longer viable for private sector companies to offer them. The public sector ones are ultimately being underwritten by the taxpayer - and it is a legitimate question as to why less than 20% of the workforce should have their pensions underwritten by the 80% who don't and have inferior pension provision due to the actions outlined above.
it is a legitimate question as to why less than 20% of the workforce should have their pensions underwritten by the 80% who don't and have inferior pension provision due to the actions outlined above.
The problem the public sector arrangements have is that those which are unfunded require today's contributions to pay today's pensions. Unless there was a way of having a 'notional' defined contribution arrangement for new entrants, the system would go awry as the source of funds for the 'accrued' benefits would dry up.
The problem the public sector arrangements have is that those which are unfunded require today's contributions to pay today's pensions. Unless there was a way of having a 'notional' defined contribution arrangement for new entrants, the system would go awry as the source of funds for the 'accrued' benefits would dry up.
I disagree about the "race to the bottom" - I find it interesting that those on the left who if it were a tax break which 20% benefitted from at the expense of 80% they would be screaming for its removal believe the exact opposite when it comes to public sector pensions.
On the funding point - it was rules around funding versus company balance sheets which rendered many private sector final salary schemes unaffordable. The same should apply to the state sector schemes rather than have the taxpayer exposed in this way - which means the scheme members need to be increasing their contributions to make the scheme financially viable.
I’m curious to know which changes you think unions are blocking that benefit the staff. In any case changes do happen on the railway but, unlike other industries, they cannot simply be imposed at the expense of the workforce.
That’s a very subservient attitude, and sadly explains why people in the UK work the longest hours in Europe, and the rise of the gig economy etc. Workers/employees are also stakeholders in any business, and any changes should be negotiated via them.
e improved things ourselves and got rewarded for making the effort. And if you were a good employee they tried to keep you, and had the flexibility to reward you accordingly.
Felt much more empowered than if I got paid the same as the grumpy shirkers and they could block improvements.
On the railway we are also empowered to improve things and get rewarded. It’s also been explained to you above why it isn’t possible to “outperform” in many railway roles.
Why are/were you so concerned about what your colleagues, including “grumpy shirkers”, get paid? I certainly don’t need to feel that I earn more than my colleagues to be motivated. We all get the same basic and so long as I enjoy my work, can earn what I need, and have reasonable Ts and Cs, that’s all I’m concerned with.
But it isn’t a problem so long as the scheme is in surplus - yet of course you want the scheme shut down just because others don’t get it, based on an entirely hypothetical exposure to the tax payer..
I disagree about the "race to the bottom" - I find it interesting that those on the left who if it were a tax break which 20% benefitted from at the expense of 80% they would be screaming for its removal believe the exact opposite when it comes to public sector pensions.
I’m sure you will disagree, but the above false equivalence doesn’t disguise the fact that your argument is virtually a text book example of “I don’t get it so neither should you”.
Or rather many companies chose to no longer afford them, leaving a huge shortfall in retirement provision that the tax payer will still ultimately be on the hook for in future.
But it isn’t a problem so long as the scheme is in surplus - yet of course you want the scheme shut down just because others don’t get it, based on an entirely hypothetical exposure to the tax payer..
The problem is it is only in surplus at this moment in time - if it isn't reformed then it won't be in surplus at some point in the future - that's why it's a problem.
I’m sure you will disagree, but the above false equivalence doesn’t disguise the fact that your argument is virtually a text book example of “I don’t get it so neither should you”.
It's actually a case of why should I (or others who are paid less than many railway people) be on the hook as taxpayers for underwriting their pension scheme ? If the railworkers want a gold plated pension scheme, then fine, but don't expect the taxpayer to be underwriting it.
Or rather many companies chose to no longer afford them, leaving a huge shortfall in retirement provision that the tax payer will still ultimately be on the hook for in future.
I'll assume you don't understand the limitations which were put on companies with regard to final salary pension schemes. The reasons they were closed is because a high degree of certainty was needed to provide financial cover for them, which simply could not be guaranteed. That was a direct consequence of the reforms which were implemented post Maxwell's pillaging of the MGN scheme, exacerbated by Gordon Brown's tax raid on private pensions. The private companies which closed them were actually acting responsibly because they knew they couldn't guarantee the pension scheme without putting the company at risk at some point in the future. The taxpayer isn't on the hook for defined contribution schemes because the pot is owned by the individual and the only cover is the FCFS cover which everybody has on any savings accounts.
I’m curious to know which changes you think unions are blocking that benefit the staff. In any case changes do happen on the railway but, unlike other industries, they cannot simply be imposed at the expense of the workforce.
Technology introductions, and Blackpool depot disrupting logical service provision have been mentioned on here, plus there will probably be loads of small things that employers would improve but it’s just not worth the fight with the unions.
That’s a very subservient attitude, and sadly explains why people in the UK work the longest hours in Europe, and the rise of the gig economy etc. Workers/employees are also stakeholders in any business, and any changes should be negotiated via them.
Business is there to make a profit for proprietors and shareholders. "Supplying stuff" is part of the process as is remunerating employees enough to keep them working and if managed correctly, the profit flowing in. Some management run remuneration much closer to the bare (legal) minimum than others, in much the same way that quality of the service may be barely adequate.
Technology introductions, and Blackpool depot disrupting logical service provision have been mentioned on here, plus there will probably be loads of small things that employers would improve but it’s just not worth the fight with the unions.
Tech. is regularly introduced on the railway - however unions expect it to be done in a way that doesn’t (for example) rob guards of the ability to earn commission. Again your narrow definition of “improvement” isn’t going to be in the employees interests - hence why unions can be beneficial.
The concepts aren’t mutually exclusive; businesses can still “supply stuff” in a way that doesn’t result in the workforce being badly treated, with poor Ts and Cs or paid the absolute bare minimum. You clearly have a very bleak view of what work should be about - presumably based on your own experience. Some of us aspire to better!
As for “confortable jobs for life”, so long as the work continues to be needed, why shouldn’t jobs be long lasting? It’s interesting you seem to see that has a bad thing. I take it you prefer uncomfortable and insecure employment?
Again, so long as you’re happy, why the preoccupation with what others are doing? Surely it’s more demotivating to know your colleagues might be on tens of thousands more to do the same job, just because they’ve negotiated better than you, or because their face fits better…
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The problem is it is only in surplus at this moment in time - if it isn't reformed then it won't be in surplus at some point in the future - that's why it's a problem.
It's actually a case of why should I (or others who are paid less than many railway people) be on the hook as taxpayers for underwriting their pension scheme ? If the railworkers want a gold plated pension scheme, then fine, but don't expect the taxpayer to be underwriting it.
High earning rail workers will also pay a lot more tax than most people. The numbers involved are also far, far smaller than many other DC schemes such as the NHS. As for why you have to underwrite it, just the same as many other things, you don’t get a choice!
As I say, “I don’t get it, neither should you” is the basis of your argument. I wonder if you feel the same about tax breaks on private schools…
Tech. is regularly introduced on the railway - however unions expect it to be done in a way that doesn’t (for example) rob guards of the ability to earn commission.
No - it's been a fact of every defined benefit pension scheme. Longer life expectancy means what is being paid in is insufficient to keep these schemes in surplus.
High earning rail workers will also pay a lot more tax than most people. The numbers involved are also far, far smaller than many other DC schemes such as the NHS. As for why you have to underwrite it, just the same as many other things, you don’t get a choice!
But high earning railworkers are a tiny % age of the working population - so that's a poor argument, particularly as they are already reliant on the state for their income.
OT - but personally I'd make both private education and private healthcare tax deductable. In the case of Education, I'd look at Germany where parents are effectively given the state funding for thrir child's education and can top it up if they wish to go private.
No - I simply fail to see why a small proprtion of the wotking population in the state sector should be so heavily subsidised and sheltered by everyone else.
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and imagine many others too.
www.theguardian.com
