Reflecting on Crazy Mirror Syndrome

Economics: Bertie Ahern has a serious affliction, one that affects his eyesight. The problem, which I'll describe shortly, is brought on by the stagnant, unhealthy air that lingers in the halls of social partnership, a bit like MRSA. Unlike MRSA, however, this affliction is curable, but before I describe how, I'd better give a full diagnosis.

"Crazy mirror syndrome" is brought on by spending too much time in close proximity to people from a unique and similar business culture. Anyone who visited Funderland as children knows what a crazy mirror does: it takes one part of your body and magnifies it beyond all reasonable proportion. At the same time it shrinks other parts of you to a tiny speck.

Not having to queue to pay taxes, experience the aggravation of the public transport system or the direct consequences of the grinding inefficiency of local government - as many of us must - Ahern's view of the public service is dictated by what he experiences around him as Taoiseach.

Through close proximity with some of the brightest and most hard-working people in the land, he has concluded that the public sector is simply the biggest and best thing about the Irish economy.

The make-up of the second public service benchmarking body contains all the symptoms of this affliction. Due to report later this year on pay relativities within the public sector - and between the public and private sectors - the body will be chaired by Dan O'Keeffe, a senior counsel and an accountant.

Nothing wrong so far (although as Minister of State at the Department of Enterprise, Trade and Employment Michael Ahern has noted that the professional services industry in Ireland is highly priced by international standards, and this factor makes pay and conditions in that sector very ambitious ones when setting standards for public service pay).

Individually, there is nothing wrong with any other members of the benchmarking body. Not only intelligent and articulate, Olive Braiden has done great work on the Arts Council. Thomas McKevitt and Billy Attley are, respectively, former secretary general of the Public Service Executive Union and general secretary of Siptu, both respected trade unionists. John Malone's former status as secretary general of the department should not be held against him, while Prof Brendan Walsh is one of the most knowledgable economists around. Finally, State Street International's managing director Willie Slattery provides some private sector perspectives.

Individually, each member of the new benchmarking body is fine. So what's the trouble? It's when you look at the full extent of the body that Crazy Mirror Syndrome becomes apparent. Constructed as it is by someone who thinks the public sector is the bees' knees, it bears absolutely no relationship to the modern reality of the Irish economy and has absolutely no incentive to take on board the views of the three-quarters of workers, the vast majority, who work in the private sector.

Of its seven members, five are provided by the public sector, and one comes from the professional services sector. One and only one - Willie Slattery of State Street - can be truly said to truly represent the private sector.

With two public sector trade unionists, a lifelong political appointee and former government department chief, a majority of the body's membership is already made up of sectors contributing less than 10 per cent to our economy. And even that figure assumes, bravely, that this contribution is positive.

Who is missing from the body is even more alarming: a group that needs to understand rapid changes in the workforce has no one from the small business sector and no one from the more dynamic multinational sector. Even the Government's own think-tank on workplace change and innovation, the National Centre for Partnership and Productivity, is unrepresented.

Before the now infamous and discredited decision of the current group's predecessor on benchmarking to increase average public sector pay by 8.9 per cent, the average public servant was - as the ESRI has now shown - already paid 40 per cent more than the average private sector worker.

Spurious attempts have been made to justify these differentials on the grounds that public servants are more educated. In terms of academic qualifications that may be so on the surface, but any serious analysis of this argument shows it to be ridiculous. Competent and hard-working though most of them are, the qualifications of most of our public servants are rendered useless by the insane recruitment practices of the public sector. Just as trained engineers worked in Soviet theatres while Soviet farmers were sent to man industrial machinery, Ireland's civil service puts economists to work on Irish language policy while health policy is run by people with degrees in classical civilisation.

However competent and hard-working they are, public servants' pay should be determined on an individual and sectoral basis, referring to productivity rather than qualifications and should do this for specific, rather than general, types of work.

This exercise will find that while some public servants are poorly paid, others are overpaid or being employed to do no work.

It can then map out how resources can be transferred from one to the other by non-replacement of staff in the latter category. In net terms, there should be no transfer from the private to the public sector.

In the meantime, and before he goes back to being Taoiseach, Bertie Ahern should take a short sabbatical (a week) in the private sector - preferably a small business in the commuter belt whose workers have to rely on public transport to get to work. That should get his vision back to normal.