Relative Reality

The theory goes that generally collective thinking produces the correct results,  however the current forced fiasco with the pension reform seems to directly buck this idea.

The theory behind the need for reform is simple, the country is broke, people are living longer and because of this people will be claiming pensions for longer – which ultimately costs more.  The facts have changed and we must adapt, if something costs more you have to pay more.

Of course it seems a little unfair that people who signed up for a job thinking they would get a lovely gold plated pension, find when reality sets in they have to have something more affordable.  But unfortunately for them there is no other option.  Unless they think private sector taxpayers subsidising a pension they could only dream of while they struggle is fair?

And then there is the argument about raising the retirement age.  Raising the retirement age by a few years still leaves a huge retirement time because as I mentioned before, people are living a lot longer – it’s relative.

Yesterday the Government made a more than a fair concession which was refused by the Unions.  This is not a negotiation, this is the Unions refusing to cooperate unless they get exactly what they want.

There is one option that seems not to have been considered.  We could keep the pension scheme and retirement age the same, but it will only be paid up to the age people generally lived to when it was originally devised.  Meaning those who are lucky enough to live past that age are not entitled to any more pension money because they have not paid for it.  This makes sense, it’s fair and is giving people what they paid for – a pension up to a certain age.  But some how I think the Unions would not like this taste of reality either.

The Government must hold its ground.

Unions and strikers should not bite the hands that feed.

One of the many arguments made by the unions and those striking yesterday was that they did not cause the financial crisis, and thus the money should be taken from the banks.

There is an element of truth in this, the crisis did originate from the banking sector.  However, while one may make the moral argument that they should be punished, in reality this would do the public sector no good at all.

In very simplified terms, the private sector is the money making sector of our society, it creates wealth and this wealth pays for the public sector.  To take money from the banks may bring some money back into the public purse, but only in the short-term.  Effectively it will choke the banking sectors ability to invest in wealth creation, in other words it’s ability to use money to make more money.  This flow of money into the public purse from banks creating more profit to tax from, and more people being employed meaning more tax, would decrease.  Overall this would mean less tax revenue, and therefore less money to spend on the public sector.  Not to mention the effect it will have on pushing banks abroad meaning job losses, and a loss of wealth creation.

On the same theme, unions and strikes would be wise not to disrupt the private sector too much, as after all they are creating the wealth that pays their wage and pensions.

These Strikes are not like the Miners’ Strike!

Strikes such as today obviously bring on memories of ‘The Miners’ Strike’ in the 1980s, but the same they are not.

The main difference is that the miners were striking because their industry was being shut down.  The public sector on the other hand is not being shut down, yes it is being cut back, but the public sector will still exist.

The strikers today are striking because they will get less money for their pensions, the miners were striking because they were losing their jobs and their livelihood, there is a big difference.

The irony of today’s strike is it is against reform that will ensure those in the public sector actually still have jobs and pensions in the future.

The miners had a point, those out on strike today do not.