Michael Taft: Increasing Public Sector Employment

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From top: IBEC Ceo Danny McCoy; Michael Taft

According to Danny McCoy, director general of employers’ lobby group, Ibec:

‘The public sector is too small for the size of the private sector, and that is really something for Ibec to say. The lack of doctors, the lack of guards etc. You can feel it.

We agree there needs to be an allocation of resources towards issues that affect people’s everyday lives, like housing.’

He went on to say the Government must deliver a surging demand for public infrastructure and public services with more investment in public sector jobs and subsidised child care. Yes, that’s something coming from employers.

But common-sensical, too. High costs – whether measured in childcare fees, private rents, A&E over-crowding and health waiting lists – degrade the productive economy and put costs on both households and businesses.

So it makes good ‘business sense’ to call for investment in public services.

And this social investment will require higher levels of public sector employment. You can’t consume a service that hasn’t been produced by women and men.

The problem is that over the long-term, the proportion of public sector jobs has declined relative to total employment.

In the early 1980s nearly one-in-five worked in the public sector. This has fallen to less than 15 percent. If we were to return to 1980 levels, we would have to employ 100,000 more in the public sector.

Ireland’s level of public sector employment is quite low compared to our peer group in the EU.

If Irish levels reached the average of our EU peer group, we’d have to employ another 150,000. To reach Swedish and Danish levels, we’d have to nearly double the number of public sector workers (i.e. another 300,000 employees). Note: Germany and the Netherlands are excluded as employment data doesn’t include public health employees.

Some might wince at these levels of public sector employment though they are pretty mainstream on the continent. But public sector employment there has a radically different structure.

Countries with high levels of public sector employment are also countries with a high level of decentralisation; where local government plays a more substantial role.

It is difficult to make these comparisons across Europe as many countries have a federal structure, where there are local and regional tiers.

But in those countries with an Irish-style central/local tier structure, local government accounts for the greater part of public sector employment.

To drive Irish public sector employment we should look to empowering local government to take over more functions that are currently reserved for central government. This, of course, is a long-term reform given the highly-centralised nature of Irish government and the complexities involved in decentralisation.

This process could involve a regional structure with a local tier. For instance, a Greater Dublin Council could be created, amalgamating the four local authorities with provision for smaller councils (e.g. Tallaght, Donnybrook, Inner City, Blanchardstown, Clondalkin, etc.).

This would build scale and localise at the same time.

There would also be benefit to the political culture from this process. Eurobarometer shows a higher level of trust regarding local authorities:

61 percent tend to trust local authorities (as opposed to 34 percent who don’t)

Only 42 percent tend to trust the national government (as opposed to 51 percent who don’t)

Moving from a ‘too small’ public sector (as IBEC puts it) to a European-style balance between public and private sectors will be a truly radical reform. This is one of many issues that didn’t arise during the election. But it will be an issue facing the incoming government, regardless of ideological hue.

Satisfying the demand for enhanced public services could well determine the popularity of any new government. And employing more people will be necessary in meeting that demand.

Radically decentralising government may be the best way to achieve all that.

Michael Taft is a researcher for SIPTU and author of the political economy blog, Notes on the Front. His column appears here every Tuesday.

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16 thoughts on “Michael Taft: Increasing Public Sector Employment

  1. Clampers Outside!

    I didn’t know the public sector had gotten that small… 15%.

    With areas like welfare seeing increased use of IT albeit slow and hindered by the PSC controversy, I would imagine with health IT investment too, there should be monies available or freed up for investing in people in services like police and health provision (nurses and doctors, not administration).

    Informative, thanks Mr Taft.

      1. Clampers Outside

        I’m sure that contributed some, not all, to the divide. And the point here is public sector employment ‘proportional to’ private sector, I believe.

    1. Cian

      How much outsourcing is there in the public sector? Are they included in these numbers? Is Ireland different in tis regard?

      If a public hospital has 400 nurses directly employed and another 100 as agency staff – are the 100 counted as public or private?

        1. Cian

          Thanks. It is about 1,400 nurses (out of 40,000).
          But there is outsourcing in lots of agencies – especially during the hiring freezes after the crash.

          We also have a lot of private hospitals- I’m not sure if that happens in these peer countries. That could explain a big chunk of the numbers.

          We also don’t have a large military – all those other countries employ tens of thousands more soldiers – do we want to do that?

          And possibly we are more efficient by not decentralised!

  2. Dr_Chimp

    On the contrary, the public sector is far too large. The issue is one of productivity. The amount of capital allocated to social protection, health and education has increased by 11% since 2010. The public sector, like everyone else, must now do more with less. The public sector, by definition, does not generate revenue. In order to get money, they must first take it away from someone else on the presumption that they know how to spend it better than the individual. Public sector should be shrunk, reformed and it’s funding cut in favour of ordinary citizens keeping more of their hard earned money.

    1. Clampers Outside

      That’d be the ideal libertarian utopia, yes? Much like the far-left utopia in its real world application, no?

        1. Dr_Chimp

          Striving for minimal government involvement in your life is not impractical. I’m not denying that there is some need for government. What isn’t practical is probably the unfortunate fact that we’re so far down this “big government”/”welfare state” path that it would be almost impossible to unwind. But in any case less central planning, in my view, is almost always preferable to more

    2. Cian

      “The public sector, by definition, does not generate revenue.”

      True – but it generates wealth.
      The education sector takes dribbling illiterate people in and produces doctors and nurses and engineers.

      The health sector creates new people. e.g. Last year Holles Street took in about 10,000 women but it discharged over 20,000 people!!!I’d like to see a private sector company do that!

      1. Dr_Chimp

        You don’t need a public sector to create doctors, nurses and whatever else. In almost every sphere the public sector plays second fiddle to tbe private sector in terms of productivity. If anything, the public sector is destroying wealth that would have been created by private markets.

  3. max

    How can the likes of Denmark achieve such a high level of local public sector employment. I cannot imagine it makes sense to have the Mater and rotunda managed by DCC makes much sense. You could possibly move schools under the umbrella of a county council as that would allow various councils to vary wages to attract teachers to disadvantaged areas, but you would also end up running into issues with catchment areas, like if you were living on the border of meath and dublin, would you have to send your kids to a school 10 miles area just because you pay your LPT to Meath CC

  4. Jake38

    Taxpayers distrust of the public sector derives from its lack of accountability.

    Here’s a suggestion.

    We (taxpayers) will fund more public sector workers if they can be made redundant when no longer needed, or fired when incompetent.

    Hows that?

    1. Cian

      How do you define incompetent? and who would you fire when something doesn’t satisfy you?

      Oh, are you 100% competent at you job – have you never made a mistake? Have you always got 100% of the resources you need? Been managed so that you are able to perform at 100%? Been provided with 100% of the equipment that is 100% fit-for-purpose? Or should you be fired?

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