In a global world, should pay reflect "local" living costs?

[Haven]

Just reading on the Guardian that:

Public servants in poorer regions to get lower pay

George Osborne to argue in budget that pay should reflect local economies but critics say it will entrench north-south divide

Whilst I appreciate that the cost of living (houses, rates and transport) are higher where there is higher demand (London being the obvious example). The cost of other goods follow National or (in the case of internet goods) Global trends.

Given our increasingly globalised economy should pay reflect regional economies ?

I feel that Public Services should reflect maximum value for money in return for job security and a good pension (the traditional reasons for joining the civil service) - rather than maximum salary competitiveness with the Private sector. If that means moving jobs from higher income economies to lower income ones then that a good thing and will help massively in both reducing local wage inflation in highly economic value regions whilst also helping to stimulate more deprived regions in which is makes more sense to create jobs.

Discus ?

 

[Spicypixel]

It's like rearranging the deckchairs on the titanic as it's sinking.

 

[Panda with issues...]

From a global perspective, this is a very real problem. I've done a bunch of work in Zambia. When I was there last, I was told of what happened in Tanzania during the mining boom.

Towards the peak of the boom, companies mining in Tanzania (gold-rich) increased pay for local workers since they were making money hand over fist. This led to riots from farmers against mine workers flush with cash, significant social unrest, and huge numbers of farmers starting to migrate around the country looking for mining worker jobs, which in turn led the country to the brink of starvation. - In this case, increasing pay above the local norm was the cause of great problems.

I really don't think that this is an issue in the UK, but is a useful anecdote if we want to truly think about this sort of thing globally.

In the UK, the issues seem to me to be along these lines:

1) Cost of living: Yes, London is more expensive, as is the south east in general.

2) Fair pay: Is it fair for someone to be doing exactly the same job as someone else for the same company, but to be paid less for it?

In response to these two things, I believe in a meritocracy. I believe that people should be paid based on how well they do their job, and how important that job is, based on free market capitalism. This makes me expect that someone living in Milton Keynes doing the same job as well as someone in London should be paid the same for it. Where they live has no bearing on what they should be paid, certainly they should not be paid less because they live somewhere else than London.

The problem here is that London, and the South East seem to be sucking in jobs left right and centre, and it is here where the Government could actually make a bit of a stand. The government needs to make the rest of the country more attractive to situate businesses, and it could make a start (and I believe already has) in shifting public services out of London and the south east and into other areas, perhaps ones that need regenerating.

It seems fairly trivial these days with the internet and so forth to say that 'we need to be in London' - Communications are not an issue. Infrastructure seems to be the key problem. Hopefully things like HS2 are going to make sites outside of London more viable in the medium term, but someone has to start an exodus from London, and it looks like it needs to be the government.

Cutting public sector pay outside of London is not an answer. People need to be encouraged to move elsewhere, and higher pay is a way to do that.

If I had a choice of living in London or Wolverhampton, the choice is fucking obvious. If the pay was higher in Wolverhampton, it starts to at least become a little more attractive. This now starts to violate my belief in eqaul pay for the same job though. It's tough. London is like a magnet, with great infrastructure, and a good lifestyle - These are difficult things to overcome, and outsourcing public sector jobs is a good way to at least make a start on slimming London down.

London being as big as it is is not good for the country as a whole, it sucks in talent and youth, and puts a huge strain on resources such as water.

The only people who should get a London living allowance are students, and even then, it's a bit dodgy in my opinion - There are universities outside of London that you could apply to after all.

 

[Spicypixel]

Politics implies this wont happen.
It's a safe enough area in the north for it to be labour regardless of policy so labour do a poor job pandering to moving jobs northwards.
Conservatives abandoned campaigning in those areas too.

Short term democracy is pretty much doomed to centralise wealth, power and demographic spreads.

 

[Kasatka]

As a public sector worker who is subject to the ongoing pay-freezes and other cuts (though thankfully still holding a job!) i would be appalled if this came in. Upper management, councilors and politicians should all be taking the brunt of these austerity measures - namely re-scaling their salaries back to national minimum wage and working up, just like everyone else.

 

[Spicypixel]

Hint: they make the decisions and they decided the like being paid.

 

[HotStuff]

The current coalition govt is shaking every tree and squeezing the public sector like nothing ever done before in history.

Pay freezes, pensions reduced, increased contributions to pensions, working till 67, job cuts and now regional pay - they are simple reasons to cost cut.

Whilist the governement will get away with this in the short term, they are only creating future problems. Public sector jobs by tradition reward workers with job security, stable wage increments and good pension but that is now fast becoming a thing of the past.

Our school is having trouble finding any decent supply teachers, if any at all. Apparently there is only ONE applicant to a particular teaching subject at Strathclyde uni for 2012 entrance.

The long and short of it is that, the governement is scaring off people coming into the public sector. Also, I see many people leaving the public sector as it is being treated more like the private sector so why bother staying? The inevitable result of this is there will be a shortage of talent, quality and applications for current/future posts.

In about 2-3 years from now, I see this problem begining to bite the arses of the politicians who made these decisions and they will be faced with a dilema. Do they let public services continue to deteriorate or do they give in to the law of "supply and demand" and realise that if they want quality services the pay and coniditions need to reflect that.

With the next election about 3 years away, and 6 million public sector workers able to cast a vote,....Labour must be rubbing their hands.

 

[Spicypixel]

If those public sector workers can make a better income in the private sector so be it. Until we readdress the balance from 50/50 down to 30/70 public/private we're going to have some serious spending issues.

RE: Also, I see many people leaving the public sector as it is being treated more like the private sector so why bother staying?
Well I dunno maybe because there isn't enough private sector work to go around yet? It's all well and good saying people will leave their jobs to find new ones - but how likely is that if you have a mortgage or kids? The risk that you might be rewarded over the stable even if it is a declining income is usually too much for people.

RE: Do they let public services continue to deteriorate or do they give in to the law of "supply and demand" and realise that if they want quality services the pay and coniditions need to reflect that.
Yeah I like the idea of increasing the tax burden from 50ish percent of someones income to 66+ right?