Public commentators in Ireland, like the greatly admired Matt Cooper, in today’s Irish Sunday Times, and on the radio, like Today FM’s Sunday Business show, contend that the public sector unions are out of touch with reality, because they are protesting the imposition of a pension levy on workers in the public sector and don’t give enough acknowledgement of the job security enjoyed by the public sector, when workers in the private sector fear for their jobs. The comparison drawn by these commentators between job losses borne by the private sector and pension levy borne by the public sector suggests that the two evils counter-balance each other and that given that job losses are inevitable in the present climate, the counter-balancing is necessary to ensure everyone does their fair share towards recovery.
Wrong! This misunderstands the way job losses affect the private sector. The fear of job losses is pervasive, but only some individuals will lose their jobs. Those individuals will definitely suffer the evils of the depression. But the lucky ones in the private sector who keep their jobs, will so far have suffered nothing. Comparing private and public sectors and ensuring that the pain is spread equally between those two groups, understood as groups, ignores the fact that the pain is not shared equally within each group.
The public sector unions want to increase taxes. This would be one way to ensure the pain is spread to every individual. The people who lose their jobs, slip out of the tax net, so they suffer an evil, but don’t additionally have to contribute to the costs of recovery. The people who do not lose their jobs, don’t suffer that particular evil, but have to pay for the costs of recovery through taxation. Further, taxation is the best way to ensure that those who are most responsible for the current situation don’t avoid paying the costs of recovery. The bosses in the private sector, after all, are not in general going to be making themselves redundant, and when they are retired, it will be on very generous terms.