Alex Hern runs through four myths about the public sector strikes, and shows why they're all false.
1. Pensions aren’t sustainable at the level they are
As Stephen Henderson wrote in July:
The Office of Budget Responsibility’s July 2011 Fiscal Sustainability report (pdf) looks long into the future (2060) and guesses at the likely proportions of GDP that might arise as the population becomes more elderly.
The assumptions are based on current policies, not government proposals. Confirming earlier findings in the Hutton Report (pdf), they clearly predict the cost of public pensions will fall from 2% of GDP to 1.8% in 2030 and 1.4% in 2060 – without any of the current Hutton proposals.
Even Hutton himself accepts that they are sustainable, although he attempts to draw a distinction between sustainable and affordable.
2. Public sector pensions are higher than private sector pensions
The reason for the disparity in average pension isn’t because public sector pensions are higher, but because so many private sector employers don’t offer any pension plan at all.
As Nigel Stanley revealed on Monday:
• Two in three private sector workers are not members of a workplace pension scheme;
• Private sector pension provision increases sharply with pay, while in the public sector it is much more evenly distributed;
• Two in three public sector staff earning between £100 and £200 a week are in a pension while only one in seven private sector employees in the same wage band are in a pension;
• Pension provision in the private sector varies hugely between sectors, with four in five workers in the energy sector having a pension, but only one in 16 in the hospitality sector having one;
• While senior public sector staff are in the same schemes as the rest of the employees in their sector and often pay bigger percentage contributions, top directors in the private sector (FTSE 100 directors) have pensions worth nearly £4 million on average.
3. Strikes are the work of ‘militants’.
Despite claims of “apathy” from politicians such as Boris Johnson, the response from the thirty unions which have been balloted has been strongly in favour of the strike. 78 per cent of Unison voted in favour of the strike, 83 per cent of the GMB, 75 per cent of Unite – all mandates which any politician would kill for.
Even when turnout is taken into account, the unions still exceed the mandate of prominent politicians such as, well, David Cameron and Boris Johnson:
You may remember, of course, that Johnson was elected Mayor of London in 2008. He gained 42.48 per cent of the first preferences in London, on a turnout of 45.33 per cent. So London has a mayor triggered by less than a fifth of the voting population – just 19 per cent.
David Cameron is the head of the government of the United Kingdom of Great Britain and Northern Ireland by virtue of his being the head of the largest party in the commons. He achieved this feat thanks to his party getting 36.1 per cent of the votes cast, on a 65 per cent turnout. Which means that, like Unite, just 23 per cent of those balloted voted in favour of a Conservative government.
In addition, the strikes are hardly the work of militant unions. Even putting aside the fact that calling Unite, the largest union in the UK, ‘militant’ stretches the definition, the headteacher’s union has voted for a strike in the first time in its 114-year history. The only militants involved are Michael Gove and the rest of the Tory cabinet.
4. Public sector pensions should be made more like private sector pensions
This is, at it’s head, the argument being made by the government. Every time they talk about ‘gold plated’ pensions of the unions, it is an attempt to divide and conquer.
As Owen Jones argued at Labour List:
Private sector pensions are one of the great scandals of our age. Only 40 per cent of private sector workers are now in an employer-sponsored pension scheme. It’s even worse with low-paid workers: only 20 per cent of those earning between £100 and £200 a week are in an employer-backed scheme.
But the argument should not be to drag down the pensions of public sector workers: it should be to drag up the pensions of private sector workers. Why punish public sector workers for the bad practices of private sector employers? If we do, we end up in a race to the bottom.
And as we said in October:
The claim that public sector pensions should be low because private sector pensions are low is often heard. But why should it be true? Why not instead make the opposite argument: that the only reason why private sector pensions are as high as they are is because they face competition from the public sector.
Some business may offer a fair pension out of the goodness of their heart, but many more offer the lowest that they can get away with – and if workers aren’t offered a better alternative in the public sector, then that low will be much, much lower.
242 Responses to “Four myths about today’s strike: Busted.”
Blarg1987
I do agree with your statement, I also think the goverment should make it law any CEO / executive / non executive in a PLC should have the same pension rights and entitlements as those who are on the shop floor of the company, as these people only manage an exisitng company and have not built it from the ground up.
It is a scandal that people in the private sector are told their final salary schemes are being closed while the executive pay skyrockets and they retire on final salary scheme. It is of no coincidence that large pay rises happened at the top when there were pension holidays and closing down of final salary schemes. It is nice to know that share dividnds skurocketed at the same time, products were cheaper and employers terms and conditions improved, sorry, my mistake thats what should have happened.
Tommy Long
What a ridiculous article. It’s been stated at least a dozen times that Chart 1B above is using CPI not RPI and therefore only shows pensions dropping as % of GDP under one of the reforms that the Unions oppose.
Also, comparing public sector pensions to the pensions of FTSE directors… well, it’s just meaningless, I’m really unsure what you’re trying to prove.
Finally, I personally think striking is quite different to voting in an election. We’re meant to vote in new people every 5 years but striking is meant to be a last resort. If only 40% of people turn up in an election we have to choose a government from that, we don’t have to strike. Only 34% of Union members voted for this strike, most of them don’t care.
Penny Unison
Many people I met today while picketing are not just worried about their pension. They do not know how they will pay increased contributions. If they are in jobs which are physically and mentally stressful they do not want to have to work full-time until 68, especially in shift work.
Retired people are often doing unpaid work looking after elderly relatives and grandchildren and voluntary community work. Who will do this in future?
Alan Mackie
@AParry9 @ninasachen No need for compromise, as is noted in point 1 – http://t.co/xHYUFfAz But let's not allow facts to get in the way #YAWN
Nicola Thomson
One last #n30 #mythbusting: A race to the bottom will not help the public or private sector: http://t.co/DzcSUQAt and http://t.co/OyFEiiC8