Much has been written in recent weeks about Franklin Roosevelt\’s New Deal, the storm of activity with which, following his inauguration in March 1933, he sought to resurrect the US economy from the Great Depression. Among his less-noticed measures was a cut in public sector pay.
Today, is it credible that hundreds of millions of employees in the world\’s manufacturing, service and financial services industries should suffer, as they are going to, while public sector pay and benefits remain inviolate?
Hmm, there\’s an idea.
Let\’s say that public sector pay is around 50% of total government spending. No idea whether it is but imagine. So £300 billion of £600 billion.
If you look at the ONS ASHE survey (the same one we get the gender pay gap numbers from) then public sector pay is, on average, 8 % or so higher than private. Plus there\’s those pensions. So call it 10%.
A 10% haircut all round on public sector pay. Sounds fair doesn\’t it?
Of course, we don\’t want to upset the fiscal boostiness the economy needs at present so we need to make this neutral, so we can pass this along as tax cuts. Say, increase the personal allowance to £11,000. That would cost £30 billion.
Hmm. We equate public and private sector pay in this time of pain and we take the working poor entirely out of the tax net.
Or of course you could look at this the other way around. The reason we tax the working poor is so that government employees can get higher pay than private sector workers.
So, anyone know what the total wage bill actually is? Is 50% about right?