Saturday, April 12, 2008

Of pigs and pokes...

I am pleased to see the appalling three year pay offer to Scottish local government workers described as a “pig in a poke” on the UNISON website.

Not only is this an altogether better class of cliché than those normally deployed to describe bad pay offers, it is also a phrase for which I feel particular affection ever since my use of it in local negotiations caused amusement and concern on the part of colleagues in Human Resources none of whom knew what it meant (and who thought I was making some indescribably improper suggestion).

More to the point it is bang on the money. Buying a pig in a poke means purchasing something without looking at it – so you don’t know what you’ve got. To some extent all pay rises are like this because, whilst you know how much money you are awarded (in cash terms) you can only guess at what will happen to price inflation over the coming period (and therefore how much your pay will be worth “in real terms” between now and your next pay rise).

The longer the period covered by a pay settlement the greater the uncertainty about what the purchasing power of your income will actually be by the time you come to ask for another cost of living increase.

Employers, particularly in the public and voluntary sectors, are always going to have an incentive to go for multi-year pay deals. Even if these are not being used to try to limit pay by comparison with single year deals the employers gain some certainty about the largest item of their expenditure which makes it easier for them to budget.

Of course, if you are tied in to a multi-year pay deal as a worker you may also have certainty – but only about your income. In effect the employer has managed to shift some of the “risk” that prices will increase over the period of the pay settlement from their budgets to ours. Instead of having to consider staffing cuts in the third year the cuts that may have to be considered will be in our food, clothing, housing or holiday expenditure.

Unless and until the prices of the goods and services which we have to buy in order to live are fixed three years in advance why on earth should we be accepting pay deals over such a long period? The only basis for such a gamble is if you expect that things will get worse in the near future (the argument hinted at in relation to the offer to health workers in England and Wales.)

Scottish local government workers are being recommended to reject three annual 2.5% increases. This is right on two counts. First because the sum of money is just too small, secondly because multi-year pay deals are (other things being equal) worse than single year deals. The logic of this recommendation should apply generally throughout the Union.

How about united action, North and South of the Border, for decent pay for local government workers?


Anonymous said...

Some of us work in public sector quangos - and I know are facing pay offers of less than 2%.
How about we do what we said we'd do earlier this year and consider "pay matters" across the whole union (not just local govt) in terms of joint action?
My employers chief exec got a bonus of £24k last year and said it wasn't a "huge amount". She's right. And my annual salary is less than her £24k one-off bonus.....

Anonymous said...

How did the debate go re action on the current local govt pay offer go, Jon? Any moves to take action?