Sunday 7 February 2010

Scottish wages must be cut

One of the biggest problems we face here in Scotland is over-dependence on public sector employment. And one of the causes of that over-dependence is that public sector wages are all too often set at a common UK level.

In Scotland the price of housing, both rented and owner-occupied, is considerably less than costs in the south of England. That's the result of a lower density of population. In a free market economy we would expect Scottish workers to accept wages less than those available down south and that in turn would encourage businesses to relocate up here.

But we don't have a free market economy, do we? In fact, Scotland has one of the largest state employment sectors in Europe. And as long as many of those government workers are paid the southeast-dominated UK rate this means that private Scottish companies have great difficulty in attracting suitably qualified workers. Why work in the private sector for lower wages, less holidays, less tolerance of time off "sick" and, especially, far less pension entitlement? And why bother to even think about starting your own business in these circumstances?

One of the attractions on an independent Scotland is that it would be forced to think seriously along these lines. An independent Scotland would have no reason to offer government workers rates geared to conditions in London.

I am posting an interesting video from Peter Schiff who is running for the US Senate.


The biggest industry in American Samoa was Tuna canning.

Socialist politicians in Washington legislated to have the US mainland minimum wage law applied to American Samoa.

After this, some of the canning plants closed down and moved to the US mainland and thousands of Samoans lost their jobs. At the mainland wage level it no longer made economic sense to process offshore where incidentally the cost of living for the workers was considerably less than on the mainland.

Ships that had previously taken the canned Tuna to the mainland had brought a large variety of other goods on the return journey from the US itself. Without the outgoing Tuna cargoes the incoming trips became uneconomic. So the Samoans lost their jobs and had their cost of living increased. Thanks government!

The Scottish economy suffers in exactly the same way.

Let the SNP speak out.

I'm still waiting...

1 comment:

David Farrer said...

Comments made on previous template:

David Farrer
I believe that the public sector London weighting only goes a small way to cover the higher costs of living there.  
In fact the Scottish average house price of 155K is higher than many English regions so should these regions get even lower pay than the Scots?  
My argument does apply to many parts of England. But it's the public sector pay that I want to see cut.

12 February 2010, 19:05:23 GMT
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Well, in Germany the wages for public sector workers are less in Eastern than in Western Germany. For just that reason. (Well, at least most of the wages. Not sure with the politician's)

10 February 2010, 00:11:41 GMT
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I though "London Weighting" was paid to public sector workers in London because of their higher housing costs. So there isn't one national pay level. Anyway outside London there are many areas where house prices are equivelent to those in Scotland. or even lower.  So should everyone outside the southeast take a pay cut then? 
In fact the Scottish average house price of 155K is higher than many English regions so should these regions get even lower pay than the Scots?

9 February 2010, 22:48:14 GMT