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Thursday, April 26, 2007

Irish General Election 2007: Plan for 250,000 new jobs but don't ask for specifics

Micheál Martin TD, Minister for Enterprise, Trade & Employment
I generally give press briefings a miss as they are a poor use of time.

Last week, the opportunity to challenge a soundbite at the Fianna Fáil press conference to launch the document Keeping Ireland Working - The Next Steps Forward, was too much to miss.

The plan, which was launched by Enterprise Minister Micheál Martin and Finance Minister Brian Cowen, set out a series of initiatives designed to support firms to grow and workers to take higher-paying jobs.

In 1997, the former Progressive Democrats leader Mary Harney said that if it isn't possible to distil a position on an issue into a soundbite, it isn't worth saying.

A favourite of Martin's in recent months has been the statistic that 86,000 jobs were created in the Irish economy in 2006 and I was irritated listening to it from the horse's mouth and many partisan parrots, without any journalist challenging him.

The Central Bank was launching its quarterly bulletin on the same morning and it appeared that the beat of most of the journalists present at the press briefing, was politics rather than economics.

Cowen's claim that Labour Party Leader Pat Rabbitte could not be trusted to defend the 12.5% corporation tax rate from European Commission busybodies bent on harmonisation, got a lot of airing but the central point in the policy document was that 250,000 jobs would be created over the next 5 years.

I had glanced through the document and I said to Enterprise Minister Micheál Martin that most of the initiatives outlined were laudable but in terms of impact on economic activity, it would be minimal.

A world-class knowledge economy in five years with many of the existing Irish tech companies struggling?

Referring to the baseline year 2006, which was an excellent period for economic growth in Ireland and in the global economy, only 6,000 jobs of the total of 86,000 that were created in 2006, were in the tradable goods/service sectors of the economy and I asked for comparable figures for the coming 5 years.

Given the limited size of the indigenous tech sector with no firm having annual revenues of more than $100 million and the fact that 92% of exports are made by foreign firms, I said that it looks that our strong dependence on foreign firms for growth will continue. However, in 2006, Irish exports only increased in US dollar terms by 3%, the lowest of the top 30 of the world's exporters. So, the challenges for the foreign-owned sector are also high.

In total 86,000 jobs were created in 2006, according to the CSO. The strong growth in the Construction (+28,400) and the Health (+18,700) sectors accounted for just over 55% of the annual increase in the numbers employed. Only 6,000 jobs were created in the tradable goods/services sector of the economy, according to policy advisory agency Forfás. It had reported in January 2007 that 83,000 jobs were created in 2006.

Martin waffled about job creation and did not provide any figures for the next five years to match the 6,000 jobs in 2006. When he queried my figures, I told him that the figures were published by his own Department's agency Forfás in January 2007.

When Finance Minister Brian Cowen summed up, he said, while looking at me, that jobs other than ones in manufacturing were also important. I interjected to say that my total of 6,000 covered all jobs support by the State enterprise agencies.

"I know that," Cowen snapped and there it was - a global figure of 250,000 and neither of the two ministers could or would provide a sectoral breakdown.

No doubt that we will hear about the 86,000 jobs again and as Mary Harney might also say, the key thing about a soundbite is to keep repeating it .

Thursday, April 19, 2007

Irish Hospital Consultants, Mickey Mouse Pay and Europe's Highest Paid Health Minister!

The usual line taken in the media by representatives of powerful professional groups such as teachers and medical consultants is to try and downplay the main issue - more money - by spinning the yarn that it's the interests of children and patients that are the primary motivator.

One medical consultant left the cat out of the bag when he termed a salary of €205,000 pus a bonus of €40,000 for a 39-hour week as 'mickey mouse'. It must be hard for an individual like that to understand or care to understand, what life is like for a patient on the average annual industrial wage of €32,000.

The gilded trade unionists in the Irish Hospital Consultants Association, crowed in relation to the Government's decision to advertise for consultants who would have to work solely in the public hospital service rather than continue on a gravy train of juggling work in both private and public hospitals:

"We are about to be assailed by spin doctors from the HSE and the Department of Health on why we need to urgently employ medical doctors even if they are of less qualification than the best candidates available within and outside this jurisdiction. The Minister and HSE have got their answer from the junior doctors of today who are the consultants of tomorrow. Several groups of Specialist Registrars who are qualified to apply for consultant posts have taken the long view and decided not to apply for the controversial positions."

How wise that these mighty people would take the long view without any intimidation?

Indeed and how similar to the partyspeak that was common in the once Communist Empire in Eastern Europe and the Soviet Union!

It takes spinners to recognise ones and as militant trade unionists, they used an old trick - anyone who would dare apply for an advertised post would be blackballed and given the Captain Boycott treatment.

Meanwhile Health Minister Mary Harney, was welcomed to the conference of the Psychiatric Nurses Association in Ballybofey, County Donegal, as Europe's highest paid Health Minister.

Liam McNamara Chairman of the PNA said that Harney and other politicians have got the biggest increases from the public sector pay bonanza - 30% more than other public staff.

Since 1997, Ministers, TDs and Senators have seen their pay rise by 119% - double the average industrial wage rise of 60%.

Overpaid Legislators: 30% Special Pay Awards including Sham Benchmarking and Pay up 119% since 1997 - Average Weekly Industrial Earnings up 60%

Ireland has 166 members (TDs) in the lower parliament chamber Dáil Éireann who represent some 4.2 million people. With one TD for every 25,000 persons, the people are over-represented in parliament, and their representatives are, by international comparison, overpaid as national legislators.

However, following the latest census of population, Ireland may even get more.Joseph O'Malley, Political Correspondent of the Sunday Independent recently wrote that Ireland has far more TDs than Britain has MPs: four times as many in proportional terms.

The TD in Leinster House is now better paid than his or her counterpart at Westminster. The TD also enjoys superior pension benefits, and for a much lower pension contribution: 6 per cent of a TD's salary, while the MP pays 10 per cent.

O'Malley says that for the TD, the transformation from being underpaid to being overpaid represents a remarkable turnaround in a short time. The TDs, however, are not complaining.

Within a decade, few sectors of society have done better in pay terms than the political class at Leinster House.In 1997, the Westminster member was paid a quarter more than the TD, who then earned €44,067. Nine years later the TD/MP pay gap has not just been closed, it has been reversed.

Today, the Dáil deputy earns €96,650 and the MP earns 11 per cent less, at €87,132.

O'Malley writes: Few can seriously dispute that the TD has less onerous national responsibilities than his British counterpart. The Dail sits less often than the Commons, and parliamentary life is much less demanding in Leinster House than at Westminster.

Never mind that Britain's population is 15 times larger. And its economy is 11 times the size of the Irish economy. The TD represents fewer people in a much smaller country. Nevertheless, Dail deputies are now paid more than MPs to do a less challenging job.

The key to the current high salary status of TDs has been the conjunction of some remarkable series of developments on the pay front. First, in 1999 the Buckley pay review awarded TDs a special pay increase of some 18 per cent. Buckley also recommended that Dáil deputies' pay should be linked to that of a principal officer in the civil service. Second, in 2002 the benchmarking review recommended a 12 per cent pay rise for principal officers.

And because TDs were linked to principal officers, they also benefited from that award. Since 1997, the 30 per cent from the special pay awards, when added to the normal partnership pay rises, has meant that the pay of Dail deputies has more than doubled. It is up 119 per cent, or twice as rapidly as the average industrial wage.

Stephen Collins in The Irish Times reported last July that politicians received their fourth pay rise in a year at the beginning of June, bringing the basic salary of a TD to €96,560 before special allowances and expenses are taken into account.

For the Taoiseach and his Ministers, it was the sixth pay rise over the past 12 months. Mr Ahern's salary is now €258,730 a year, including his TD's salary, while the Tánaiste earns €222,256 and other members of the Cabinet get €204,020.

Each Government minister has got 2 benchmarking awards, even though everyone knows that the system has been an absolute scam.

A comparable country to Ireland, such as New Zealand, which is similar in population size (4.1m) and economic scale and performance to Ireland, manages with 121 MPs, one chamber, and no upper house.

Indeed in 1999, in a non-binding referendum, the New Zealand people voted to reduce the number of MPs to 99: some 84 per cent voted in favour. Even more remarkable: the Kiwi MP is paid just €56,730, under two thirds the Irish rate.

Joseph O'Malley in The Sunday Independent, says that a contribution of only 6 per cent of salary entitles TDs to a full pension after just 20 years, based on half their final salary, and with a lump sum payment of one and a half times that salary.

But what the TD pays for his pension bears no relation to the real economic cost of providing his retirement benefits. The taxpayer pays that extra, unquantified, cost.

In a damning indictment of the current wide gap between many of the governed and their legislators, O'Malley writes: Many private sector companies are closing their defined benefit (final salary) schemes to new entrants, while others raise contributions to close the funding deficit, which the law passed by the Oireachtas requires.

Remarkably, however, little echo of this great debate on pensions can be heard in the national parliament.To cap it all, part-time local councillors are seeking public occupational pensions even though most private sector workers beyond the foreign-owned sector and large Irish-owned companies, such as banks and public companies, have none!!

The Sunday Independent has reported that thirteen Government ministers have benefited from tax breaks, averaging almost €5,000 each on second homes in the capital, just weeks after the Taoiseach's brother Noel Ahern, said property speculators should be "taxed out of existence".

The break designed exclusively for members of the Government, allows ministers to claim relief on second homes and for overnight accommodation in Dublin. Latest figures reveal that 13 ministers availed of the perk, claiming €63,477 between them.

So when Mary Harney lectures the nurses on pay, her credibility is at issue given the she is among the small elite in the public service who have got the biggest pay increases.

Monday, April 16, 2007

The Politics of Irish Jobs Announcements

Micheál Martin TD, Minister for Enterprise, Trade & Employment
Irish enterprise agencies are required to inform ministerial office staff at the Department of Enterprise, Trade and Employment on any development where either the senior minister or two junior ministers can claim credit for via a press release.

Jobs announcements are the manna to spin the yarn while there is no monthly ministerial claim for credit in respect of redundancy data.

In recent weeks, in advance of the general election and with a raft of unwelcome plant closure announcements, the sparse weekly jobs announcements have usually been preceded by a leak.

So news jobs have been unofficially announced in the weekend newspapers and then, in succeeding days, there is the ministerial imprimatur on the number of "high calibre " jobs that will be created and lots of blah-blah.

Last week, there was an announcement from Minister for Enterprise, Trade and Employment Micheál Martin TD that US firm Paragon Global Resources is to locate its international headquarters in Blanchardstown, Co. Dublin, with the support of IDA Ireland. The total investment will be €3.7 million over five years and will create up to 100 new "high level positions."

Today Monday, Martin announced that DeCare Systems Ireland Limited, a unit of a US firm, is to "undertake a strategic expansion of its business at the University Technology Centre, Cork". With the support of IDA Ireland, the expansion will create 100 new high level positions over five years, Martin said.

Apart from the apparent coincidence of the same number of jobs over the same time period, to have a time period of five years for creating jobs, is ridiculous. So it is an aspiration.

The five-year time period appears to be politically motivated to boost the number of jobs in an announcement.

Thursday, April 12, 2007

McDowell, Ethics Bill, Planning Tribunal and Continuing Corruption


Last October, within a month of becoming leader of the Progressive Democrats and Tánaiste, Michael McDowell promised an Ethics Bill in the aftermath of the revelations that the Taoiseach Bertie Ahern had received cash payments from various individuals to alleviate the requirements of a post-marital break-up settlement, six years after a formal separation.

Bertie Ahern agreed with McDowell's proposals to ban private gifts for politicians, as a face-saver for the latter who had a choice of supporting Ahern's ethics standards of the early 1990's or sit on the Opposition benches.

On Wednesday this week, legislation requiring politicians to seek advance approval for substantial gifts from friends, also included a provision that provides for tripling the amount of money they can receive without having to declare the contribution.

Under the Ethics in Public Office (Amendment) Bill, Irish politicians must not accept more than €2,000 from friends for personal reasons unless they get approval from the Standards in Public Office Commission. But gifts or donations under €2,000 would not have to be declared, more than three times the current threshold of €650.

Political analysts say that the Bill has little chance of becoming law before the Dáil is dissolved for the general election.

In a radio interview, McDowell said that when for example he received hospitality from the organisers of the Ryder Cup last September, he shouldn't have had to declare such benefits.

The Ryder Cup example is a very pertinent one as the brown envelopes that former Government Press Secretary Frank Dunlop and more recently, bagman for builders, seeking to buy off local politicians, told the Planning Corruption Tribunal that has been sitting for almost 10 years, the typical rezoning vote purchase cost about IR£2,000.

Not only has ZERO been done about the corrupt land rezoning system that spawned the planning corruption, Michael McDowell's PD colleague Tom Parlon views any change in the system that makes multi-millionaires of farmers near Irish towns, "to the left of Stalin." Farmers like Parlon getting most of their income from European taxpayers, are not socialists either!

So NOTHING has been done to change the corrupt rezoning system and anyone who believes that corruption has ended, is a fool.

The contemporary Frank Dunlop in the guise of bagman, has dispensed with the brown envelope and has a much wider range of bribes/inducements under the umbrella of "corporate entertainment."

The Irish Independent reported in September 2006, that Menolly Homes, which paid former Fianna Fail TD Liam Lawlor £40,000 to get a better postal address for its homes, had offered a clutch of South Dublin councillors expensive gifts of Ryder Cup tickets and corporate hospitality.

The Financial Times reported earlier in 2006, before the 2006 World Cup that City investment banks in London, flushed with record earnings were snapping up most of the corporate hospitality packages available to British companies.

The London banks had already secured about 20,000 tickets, more than 70 per cent of the corporate packages being sold in the UK.

The FT said that Champagne and fine-dining packages ranged from €900 (£618) for a single match to as much as €300,000 for a luxury corporate box holding 10 people.

In Germany, 80 per cent of the total of 350,000 corporate tickets were available for local companies and the biggest bank Deutsche Bank headed the buyers' list. Seven-game packages priced at €15,000, which would allow a punter to follow England all the way to the final, have already been sold out.

So McDowell brings in an Ethics Bill that is unlikely to be passed while he and is colleagues have sat idly by for a decade and our rezoning system remains a golden tabernacle of vested interests and another Irish solution for an Irish problem.

In his radio interview on Thursday, McDowell suggested that when a minister gets a crate of wine from a chamber of commerce, he or she should not be required to refuse it.

The biggest loophole is in self-valuing the gift.

Some recipients like Michael McDowell, may know the value of a crate of Château Petrus - others would genuinely not!

Surely McDowell knows that more often than not, a "gift" is a legally-wrapped bribe?

It's also indeed indicative of how much the Progressive Democrats' leadership has surrendered to maintain the spoils of office, that the man who opposed single party Government, has made a proposal that even a Fianna Fáil minister with the thickest brass neck, would unlikely do.

Global corruption rampant; Corporate entertainment the new bribery in Developed World

Tuesday, April 10, 2007

Climate Change Impacts Respect no Borders

Visiting Chinese Premier Wen Jiabao (L front) shakes hands with the Republic of Korea President Roh Moo-hyun during their meeting in Seoul, capital of the Republic of Korea, April 10, 2007. (Xinhua Photo/Rao Aimin)

This is the time of year when the winds from the Gobi desert in Mongolia and Northern China sweeps yellow sands across to the Korean Peninsula.

The annual April storms keep children indoors, ground aircraft and create problems for precision industries such as semiconductors.

The Financial Times reports today that after a mild winter that deposited little snow in the Mongolian deserts, experts, including the Korea Meteorological Administration, believe 2007 could be the worst on record.

In the 1980s South Korea suffered severe yellow dust storms on about four days a year but that increased to an average of eight days a year in the 1990s and has reached more than 12 days a year this decade, according to the environment ministry, reflecting global warming.

The sand from the Gobi desert is becoming ever drier. Diminishing snowfalls mean the sand is not bound together as closely as in previous years.

The sand, which carries high levels of iron and manganese, picks up dioxins and heavy metals such as copper, cadmium and lead as it travels across the polluted industrial areas of northern China.

The Korea Environment Institute estimates as many as 165 South Koreans, mainly elderly people and those with respiratory problems, die each year and almost 2m more suffer from eye and breathing problems as a result of the sand.

Last year 4,373 schools closed for at least one day, while 164 flights were cancelled and many more aircraft were forced to change flight paths.

The Samsung Economic Research Institute estimates the economic damage from yellow dust at $5.5bn annually.

The FT says that Hynix and Samsung Electronics, both big computer chip makers, have increased the time employees spend in "air showers" on the way into their high-technology plants. Carmakers are forced to change the air filters in their spray-painting factories more often.

Still, for some businesses the seasonal storms also represent an opportunity: LG and Samsung have both produced new air-purifiers with enhanced dust removal mechanisms.

Meanwhile, supermarkets report mask sales have doubled or tripled from last year and restaurants are even selling more samgyopsal, a fatty pork dish said to be good at cleaning out dust from the inside when consumed.

Government officials from China, Korea, and Japan, which suffers to a lesser degree, have been meeting to help Mongolia plant more trees to create a green belt across the Gobi desert, and are giving $1.2m to Korean environmental groups to promote forestation. But it will be a slow process.

Monday, April 09, 2007

Irish Road Safety and John Waters' Metaphysical Ramblings

BBC's Top Gear programme is a popular programme because of its focus on high-speed cars. Presenter Richard Hammond has returned to the programme after a serious crash last September in a jet-powered car while filming for the programme. Hammond had been in a dragster-style car capable of reaching speeds of about 300mph at Elvington airfield near York.

A noticeable difference between my school days and today is that on a weekday afternoon, it is rare these days in Dublin, to find people staggering blind drunk out of pubs and proceeding to drive a vehicle. In contrast, it was far from rare in Bandon, West Cork. Twenty miles west, Dunmanway had a reputation for the amount of gargle available at funerals and the bottles of poitín or whiskey would be passed around in the graveyard.

While the amount of driving while being blind drunk, has fallen significantly in recent decades, most Irish teens regard the consumption of a lot of alcohol as an essential part of socialising.

Young men and not so young men are smitten by fast cars as the popularity of the BBC programme can testify to. Presenter Jeremy Clarkson's sidekick Richard Hammond, having recovered from a high-speed test car accident last year, is back on the testosterone-fuelled programme.

So for young Irish male drivers, the combination of drink and fast cars is a powerful cocktail.

An example of poor attention to public safety - Dubliners are very familiar with cracked pavements that can go unrepaired for months or years. There are also plenty other examples of the lackadaisical attitude to public safety. Dublin City Council has a marked car space directly in front of the south exit of the Merrion Inn pub on Merrion Road above. Motorists swinging left into the petrol filling station, sometimes without significantly reducing speed, put pedestrians at risk. Think of the risk on a dark wet night, with pedestrians exiting the pub and a moving car with limited or no visibility on its left, just about to cut across the footpath.
Irish Times columnist John Waters looks at the world through a more opaque prism.

This is part of what John Waters presented to readers in today's issue:

...a comparison between our out-of-control male driver and the suicide bomber in some Muslim cultures. The context is different, but they seem both to be expressions of a perversion, a short-circuiting of meaning.

Ideally, a child needs to grow up in a coherent tradition which, while transmitting its own principles with love and conviction, is open enough to enable the testing of its value system against others. The element in Islamic cultures provoking the emergence of the fundamentalist extremist appears to be the rigidity of the tradition and its poor adaptability to different forms of reality.

When Islamic culture is transplanted into a secularised, hyper-liberal environment, a host of complexes are created in the minds of some youngsters, who react by plunging deep into the tradition. Our culture is, in a sense, the opposite.

Having recently emerged from rigid tradition into a virtual free-for-all, we have replaced our prior insistence on the conveyance of a singular notion of meaning with a pick-and-mix culture in which the child is left struggling to comprehend reality. This, for the reasons already stated, affects males more than females.

The signals picked up by the young man tell him that he may find his meaning and identity as an entrepreneur, a sportsman or a plumber. But, because he is primed with questions that go far deeper than business, sport or plumbing, this provokes in him an extreme reaction not dissimilar in psychological terms to the reaction of the young Muslim man who, unable to reconcile the eternal culture with what he has been taught, dives backwards for reassurance into the deepest, darkest parts of the tradition.

The young Irishman, lacking this option, plunges forward in a hedonistic rush, and, because he finds himself on quicksand, speeds up to stay above ground. The two are equally out of control, but seek different ways to answer back.

One straps himself around with explosives and walks into a city. The other, perhaps less consciously, gets behind a steering wheel, puts the pedal to the metal and explodes onto a country road.

- isn't life complicated enough without having to jump on a pop-psychology bandwagon?

The recent change in the attitude of the Government to road safety issues will take a long time to have an impact.

The obsession of each new generation with drink will not change in just a decade or two. In addition, in our system of governance, where there is little public accountability, the evidence is everywhere of a lackadaisical attitude to public safety as exemplified by the Merrion Road case cited above.

Friday, April 06, 2007

Power, Money and the link with Behavioural Inhibition

A Ferrari Enzo
The focus on the pay bonanza earned by new Ford Motor Co. CEO Alan Mulally for four months on the job in 2006, has again raised the issue of when enough is enough when it comes to hired-hands hoovering up for themselves and their families, as much as they can lay their hands on.

Mulally earned $28.2 million from Sept 1st, 2006 after joining from Boeing Co. to restore profit. Mulally's total compensation in 2005 at Boeing, his last full year with that company, was $9.96 million, including $7.58 million in long-term incentive pay. Ford had a $12.7 billion loss for 2006.

At a certain point, as money keeps piling in, the super-rich can lose track of how much they actually have (SEE: Who cleans up at Goldman Sachs?) but lots of money confers power and status.

In the age of globalisation, where superearners take the lion's share, while the earnings of many workers in the Developed World are under threat from free trade, there are serious long-term implications.

Lots of money also makes people behave like idiots!

The experience of US comedian Eddie Griffin in writing off film producer Daniel Sadek's $1.5 million Ferrari Enzo, after piloting the hyper exotic car into concrete retaining wall, a year after Swedish videogame tycoon Stefan Eriksson smashed his Enzo — one of only 400 ever made — into a telephone pole, had prompted Sadek to say: “Eddie came out of the crash OK”, and that “A lot of worse things are happening in the world.”

Richard Conniff, author of The Natural History of the Rich: A Field Guide, writes in the New York Times: So what exactly constitutes a bad day in this rarefied little world? Did the casino owner Steve Wynn cross the mark when he put his elbow through a Picasso he was about to sell for $139 million? Did Mel (“I Own Malibu”) Gibson sense bad-day emanations when he started on a bigoted tirade while seated drunk in the back of a sheriff’s car? And if dumb stuff like this comes so easy to these people, how is it that they’re the ones with all the money?

Conniff refers to an experiment lead by Professor Dacher Keltner, a psychologist at University of California - Berkeley, who says that power and status imbue almost every facet of social interaction, from linguistic convention to the economy of emotional expression. Keltner also says that elevated social status leads to disinhibited social behaviour.

Mugshot of actor Mel Gibson - - A report on Gibson's behaviour following his arrest for drunk driving in July 2006, said that once inside the Sheriff's car, a source directly connected with the case said that Gibson began banging himself against the seat. The report says Gibson told the deputy, "You mother f****r. I'm going to f*** you." The report also says "Gibson almost continually [sic] threatened me saying he 'owns Malibu' and will spend all of his money to 'get even' with me."

The report says Gibson then launched into a barrage of anti-Semitic statements: "F*****g Jews... The Jews are responsible for all the wars in the world." Gibson then asked the deputy, "Are you a Jew?"

Researchers led by Keltner took groups of three ordinary volunteers and randomly put one of them in charge. Each trio had a half-hour to work through a boring social survey. Then a researcher came in and left a plateful of precisely five cookies. Care to guess which volunteer typically grabbed an extra cookie? The volunteer who had randomly been assigned the power role was also more likely to eat it with his mouth open, spew crumbs on partners and get cookie detritus on his face and on the table.

It reminded the researchers of powerful people they had known in real life. One of them, for instance, had attended meetings with a magazine mogul who ate raw onions and slugged vodka from the bottle, but failed to share these amuse-bouches with his guests. Another had been through an oral exam for his doctorate at which one faculty member not only picked his ear wax, but held it up to dandle lovingly in the light.

Conniff says that as stupid behaviours go, none of this is in a class with slamming somebody else’s Ferrari into a concrete wall. But science advances by tiny steps.

The researchers went on to theorize that getting power causes people to focus so keenly on the potential rewards, like money, sex, public acclaim or an extra chocolate-chip cookie — not necessarily in that order, or frankly, any order at all, but preferably all at once — that they become oblivious to the people around them.

Indeed, the people around them may abet this process, since they are often subordinates intent on keeping the boss happy. So for the boss, it starts to look like a world in which the traffic lights are always green (and damn the pedestrians).

Professor Keltner and his fellow researchers describe it as an instance of “approach/inhibition theory” in action: As power increases, it fires up the behavioral approach system and shuts down behavioural inhibition.

And thus the Fast Forward Personality is born and put on the path to the concrete barrier.

The corollary is that as the rich and powerful increasingly focus on potential rewards, powerless types notice the likely costs and become more inhibited.

The bottom line for Conniff is: Without power, people tend to play it safe. Given power, even you and I, would soon end up living large and acting like idiots.

Power, Approach, and Inhibition

This article examines how power influences behaviour. Elevated power is associated with increased rewards and freedom and thereby activates approach-related tendencies. Reduced power is associated with increased threat, punishment, and social constraint and thereby activates inhibition-related tendencies.

Monday, April 02, 2007

Irish Nurses: Politicians don Hairshirt late in day having been huge gainers from Public Sector Pay Bonanza

The Irish nurses in public hospitals have begun industrial action to press home their claims for a reduction in their working week from 39 hours to 35 hours and a special pay increase of 10%.

Some other groups in the health service have better terms than them and why wouldn't they try to get a piece of the free lunch like so many others, including politicians?

During the dot-com period of temporary insanity, teachers and other public servants bought into the self-serving delusion that stories on the small number in the private sector like Fran Rooney who hit the jackpot with the Baltimore Technologies floatation, were representative of private sector workers, rolling in manna from heaven, while the brethren in the public sector had to survive on thin gruel.

Taoiseach Bertie Ahern is not one for sailing against the wind and he agreed to the demands of public sector trade unions to set up a "benchmarking" body that was tasked with making comparisons between similar grades in the public and private sectors.

In the nod and wink world of Irish politics, the conclusions were agreed before the body was established and such minor issues as the gold plated pensions that were available to Bertie Ahern and others on the public payroll, compared with the zero coverage available to a large number of private sector workers, was conveniently ignored.

Before the benchmarking body was due to report, Senator Joe O'Toole who was then the general secretary of the Irish National Teachers Organisation, left the cat out of the bag when he said that benchmarking was like turning up at an ATM to withdraw cash. The use of the word "benchmarking" was a sham.

In December 2000, a Public Service Benchmarking Body, established under the Programme for Prosperity and Fairness (PPF), was asked to undertake "a fundamental examination of the pay of public service employees vis-a-vis the private sector." Former Davy Stockbrokers' economist Jim O'Leary was a member of the body for a period but he resigned before it reported.

In 2004, O'Leary who had joined the Department of Economics at Maynooth University, published with two of his colleagues, the results of six months' rigorous and painstaking research into public-private sector pay differentials in Ireland - Public-Private Wage Differentials in Ireland, G.Boyle, R.McElligott and J.O'Leary, ESRI Quarterly Economic Commentary, Summer 2004.

O'Leary and his colleagues wanted to discover whether similar people in similar employment circumstances were better or worse off working in the public than in the private sector. In order to do this, they had to control for attributes like age, experience, gender and education, and also for job characteristics like occupation, type of contract and size of establishment.

As the CSO (Irish Central Statistics Office) data does not permit this kind of analysis, the dataset that they had to use, is one based on a large-scale survey conducted by the Economic and Social Research Institute (ESRI) and used for much of its research into poverty and inequality.

The core finding was that on average, public servants earned 13 per cent more than their private sector counterparts on a like-for-like basis in 2001.

The researchers also discovered that the size of this margin (the public sector premium) in 2001 was not significantly different from what it had been in 1994, suggesting that pay increases in the public sector had kept pace with the private sector throughout the Celtic Tiger period.

Another discovery was that the margin by which public service workers outearned their private sector counterparts tended to be significantly larger at the bottom of the income distribution than at the top.

A particularly striking finding was that the estimate of the public sector premium for Ireland was more than twice as large as the available estimates for other countries.

The Public Sector Benchmarking Body recommended pay increases which averaged 9 per cent across the grades examined and cost €1.2 billion a year. Government Departments introduced aspirational targets for staff that would make a laughing stock of a manager in the private sector, who emulated the farcical exercise.

O'Leary says that the Public Sector Benchmarking Body never published its research results and at no stage in its 278-page report did it explicitly state or opine that public sector pay had fallen behind that in the private sector.

Ministers, other politicians and all living former employees of the Irish public service received special payments. Bertie Ahern, Michael McDowell and the rest of the Cabinet got double benchmarking payments.

The gravy train didn't stop there.

Politicians' Pay

Total increases taken by Ministers and TDs since 1997, have jumped 119 per cent, or twice as rapidly as the average industrial wage.

In 1997, the Westminster member was paid a quarter more than the TD, who then earned €44,067. Nine years later the TD/MP pay gap has not just been closed, it has been reversed. Today, the Dáil deputy earns €96,650 and the MP earns 11 per cent less, at €87,132.

Joseph O'Malley of the Sunday Independent wrote in 2006: Few can seriously dispute that the TD has less onerous national responsibilities than his British counterpart. The Dail sits less often than the Commons, and parliamentary life is much less demanding in Leinster House than at Westminster. Never mind that Britain's population is 15 times larger. And its economy is 11 times the size of the Irish economy. The TD represents fewer people in a much smaller country. Nevertheless, Dail deputies are now paid more than MPs to do a less challenging job.

The key to the current high salary status of TDs has been the conjunction of some remarkable series of developments on the pay front.

First, in 1999 the Buckley pay review awarded TDs a special pay increase of some 18 per cent. Buckley also recommended that Dáil deputies' pay should be linked to that of a principal officer in the civil service. Second, in 2002 the benchmarking review recommended a 12 per cent pay rise for principal officers.

And because TDs were linked to principal officers, they also benefited from that award. Since 1997, the 30 per cent from the special pay awards, when added to the normal partnership pay rises, has meant that the pay of Dail deputies has more than doubled.

It is up 119 per cent, or twice as rapidly as the average industrial wage.

Irish Public Sector Pay

Pay - Irish Public Service 2001-2006: Salaries up 59%; Payroll up 18% - 38,000 additional workers and Pensions up 81.3%: Average industrial wage rise in the period was 19%:

Irish public service salaries rose by 59% in the period 2001-2006 and the payroll expanded by 38,000 extra staff.

Increases in public sector over the period due to general rounds total €2,479m (or 24.3%), “special” pay increases (primarily Benchmarking) total €1,328m (or 13%), and other factors (such as extra numbers) total €2,193m (or 21.6%).

Stripping out the additional staff, the average increase was 38%.

The increase in the average industrial wage for a male worker in the period 2001-2005, was 19%.

- most private sector workers on the industrial wage do not have an occupational pension. So the disparity in gains is greater than the 100% difference in the period 2001-2006.

The Exchequer’s annual wages and pensions bill increased sharply from €10.2 billion in 2001 to €16.2bn last year, with what has been termed "benchmarking" accounting for up to €1.32bn of the rise.

Conclusion

Minister for Health Mary Harney is now telling the nurses that the country cannot afford a big pay increase or a reduction in hours worked.

It's a bit late in the day to don the hairshirt when Mary Harney and other politicians were happy to nod through sham benchmarking and other huge increases for themselves, as if they had somehow found the philosopher's stone that would transmute the good times of the Celtic Tiger property boom, into a permanent prosperity.

As to a postscript on sham benchmarking, with its joke targets, last January, the Taoiseach asked the OECD to put forward proposals on public sector reform - six months after the general election!