16% pay cut over 5 years!

[Admin_Guru]

A pay freeze of two years is almost certainly going to be followed by a max 1% pay rise (gesture) for the following two years. This effectivey means that the Armed Forces will have received a 16% pay cut over a five year period. This assumption is based upon the Armed Forces being treated the same as Public Sector workers.

Crewroom chat had suggested that after a two year (over three year period) pay freeze, the Government would be obliged to catch-up the drag curve with a generous pay rise; how wrong was that assumption?

As the ingredients to these assumptions were voiced in the House of Commons today; I anticipate that many people scheduled to reach a 'natural break' in the next five years may make tranche two of the redundancy program an easy task to complete.

Of course the cost of living is also on hold what with fuel prices and the hidden taxation therein........ :bored:

[muttywhitedog]

and in the interim, I just put less and less effort in at work, leaving off as early as possible!

[Chicken Leg]

Out of interest, how have you arrived at 16%? Is that based on inflation staying at 5% over the next 2 years?

[jayc530]

Yet benefits are going up by 5.2% inline with inflation.

[fin1012]

16% over 5 years gives an average of 3.2% per year - seems a reasonable approximation and is below what I used when I did the same calculation this afternoon. Bizarrely, I also couldn't help thinking that if I pulled the plug now, my pension would go up 5.2% in April. We are certainly living in interesting times....

My enthusiasm for 'going the extra mile' has also lessened noticeably over the last 12 months. I think it bodes ill for the future - I don't know anyone who hasn't run their details through the redundancy calc in the last month or so - standby for a complete collapse of morale.

[Kreuger flap]

standby for a complete collapse of morale.

Standby? You must be a Senior Officer. Morale has already completely collapsed.

[Jimlad1]

Its even worse for the MOD CS - the military have at least got their in year increment rises. The MOD used to get them, but instead had progression frozen under the last pay rise.

Today we discovered we're only getting a 1% payrise as according to the Chancellor we should have been rising through the payspine progression for the last 2 years, so only need 1% to make up.

[Trim Stab]

Well think carefully if you imagine that by resigning and going to the private sector the future will be brighter!

[Cows getting bigger]

Hey guys, welcome to the real world. Those of us who have been out for a few years are only too aware of the financial climate

..... and before anyone start about troops being worked harder than ever, operational tempo etc, the reality is that there is no money. Period.

[NutLoose]

Spot on CGW, not all of us get a raise every year, so welcome to the real world.

[ICBM]

As a few have intimated already:

Our blessed country is BROKE; the Eurozone might shortly go down the pan (pulling our exports/revenue/economic growth even further down with it) and the outlook is a stark realisation that things are, on a balance of probability, going to get worse before they get better.

Taking heads out of the sand, realising that we're paid pretty well compared to some sectors (after all YOU volunteered for public sector work!) and not moaning about a pay freeze and a 1% gesture is wise right now.

Get real or get out, quite frankly. You'll be lucky to get a job on the outside over the next few years..

[Just This Once...]

..and ICBM sums up the public's view of the Armed Forces and any form of implied 'covenant'. Die for us, but don't expect to be paid by us.

[ICBM]

...or, I rather take the view that no matter how much is pushed our way there will always be those who demand more pay. I'm sorry I cannot join your crusade bemoaning a 1% gesture (unconfirmed btw)

I would, however, completely support an enhancement to the Op Allowance thereby giving extra benefit to those who put their lives on the line on Ops and not to those who always find a reason to not deploy; that gets my vote!

[NutLoose]

JTO, I like CGB are ex RAF, so you are preaching to the converted, however the expect to die for us but not get paid by us gets old, does that fact, automatically mean you should get pay rises regardless because of that fact? As said Operational allowances are for that, Not your core wage, if anything as said raise those.

It is the same with the likes of immigration staff striking because of the Government and their pensions, the Country cannot afford them, hence why the retirement age is being pushed upwards... But what really does pee me off is the fact that bloody MP's get their pension upon being ousted from Parliament, they to should have to wait until the retirement age.

[glad rag]

...or, I rather take the view that no matter how much is pushed our way there will always be those who demand more pay. I'm sorry I cannot join your crusade bemoaning a 1% gesture (unconfirmed btw)

I would, however, completely support an enhancement to the Op Allowance thereby giving extra benefit to those who put their lives on the line on Ops and not to those who always find a reason to not deploy; that gets my vote!

:D:D:D:D:DHow many times stiffed whilst others sat back with that @@dodgy@@ knee or @@bad@@ back??

[PPRuNeUser0211]

Nutloose - In the decade I've been serving I've lost 5 good friends and 3 other colleagues in service. None of them has died on ops, so while I'd suggest that yes, op bonus is valuable (particularly to those in green) saying that is the sole solution is a bit simplistic.

[high spirits]

Op allowance current arrangements don't cut it for me. Why should some raging bluntie at bastion be entitled to the same as a patrolling soldier? Just because they both spend 6 months away from family. I don't think so. The elephant in the govt/MOD is that we cannot live within our means whilst still in Afghanistan.....we don't want to admit it because if we pull out then we are ripe for more of HM cricket bat in the one-way valve.

[NutLoose]

I see where you are coming from, I too lost friends whilst serving, again not on Ops, but in the same respect I have also lost friends outside the Forces since, the one fact in life is death, in the services Operational allowances are there specifically for that, to supplement a wage to cover operations, if anything should be boosted it should be that.

[VinRouge]

If we dont like it, we can all leave and join the private sector if we think they are much better off.

Having said that, you gets what you pays for, if they think its going to be "maximal effort" they can think again.

No Bucks? No Buck Rogers!

[zedder]

fin1012,
Hope you are not going to PVR without telling me first. Don't forget those 3 means of communication!;)

[adminblunty]

I believe the UK has to borrow £127bn this year just to pay existing bills, hence why we've now got a 1% pay rise cap for 2 years on top of the 2 year pay freeze. If you think its grim now wait for the eurozone to implode and see the massive economic hit we'll take as a result. I'm seriously thinking about emigrating, I've just checked I can get a visa to OZ, just need to persuade the wife, sell the house and find a job in OZ.

Ahh well at least the airlines are recruiting... FFS. Not so sure who is flying though.

[ShyTorque]

I'm ex mil too.

Try not to feel too hard done by. It's hard times out here, too.

In the last five years as civvy aircrew I've had only one pay rise and I had to fight hard to get it. A grand total of 3%, or three-fifths of a percent per year.

Note that the last five years supposedly included some of the "boom" times before the more recent "bust".

[LFFC]

No Return to Boom and Bust - YouTube

[ShyTorque]

So far Gordon's been half correct. At least about "no more boom" :hmm:

[Alexander.Yakovlev]

My gym membership is still free though, and the old dentist isn't too bad either. It is not the end of the world.

[NutLoose]

Speaking of boom and bust, someone elsewhere posted this laymans description of the EU Greek bailout which I thought read well lol..

ah yes ... the EU

... it is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town. No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

And that, Ladies and Gentlemen, is how the Greek bailout package works.







Nato's **** everyone off month - Topic (http://forums.ubi.com/eve/forums/a/tpc/f/2601013236/m/9701050569/p/3)

[Willard Whyte]

My gym membership is still free though

-

?

[phil9560]

Nutloose that is utter genius;)

[Top West 50]

I recall the £4 a week rise in the mid 70s. We fell further and further behind eg Underground Guards, but Maggie made all well within days of victory in the election! Perhaps similar good news in 2015? Meantime, I could go on about my CPI linked pension but I think I'd rather reflect on 34 fantastic years which never seemed like working!

[Alexander.Yakovlev]

Well Willard, a gym of that quality would cost me easily £300 a year. Especially a gym as quiet as the one I use!!! What a saving!

[The Old Fat One]

Nutloose

Awesome....but I think you will find that is pretty good description of how the entire global economy works.

Meantime, I could go on about my CPI linked pension but I think I'd rather reflect on 34 fantastic years which never seemed like working!

+1 :D:ok:


I've just checked I can get a visa to OZ, just need to persuade the wife, sell the house and find a job in OZ.


Take it you didn't watch the prog last week about all the Brits coming back from Oz then?

And on a serious note from someone that has been there and done that. If you are in the mob and have a job (and still need a salary)...suck it up and stay in, unless you are coming out with a cast iron promise of work. As a number of ppruners have pointed out, if you think your terms and conditions are suffering, you ain't seen nothing yet.

[Admin_Guru]

Ahh well at least the airlines are recruiting...

American Airlines filing for bankruptcy is a bit of a shocker.

I suppose that 1% of a lot is a lot
and 1% of sweet FA is... ergh ..sweet FA.

My point is that having bitten the zero pay rise over 2 years whilst all bills sky rocket, especially fuel as despite a briefing given by Manning several years ago concerning geographical stability, many, many servicemen are forced to drive long distances to maintain family ties. ....and rising fuel costs added to deleted routine claims and allowances are seeing quality of life dissappear down the pan. PC Plod and my CS friends still get pretty awesome allowances including good hire cars and the best hotels without the subsequent scrutiny that makes you feel like a thief.

For those that work for what they earn :ok: Respect :ok:
For most of us the can-do attitude prevails, but for how long?

[ShyTorque]

For most of us the can-do attitude prevails, but for how long?

You mean in the military? Until you become a civvy.

Then you will do it all over again, but as a civvy. If you want to keep a job, that is. It's an employers' market out here, too, don't forget. ;)

[Vortex what...ouch!]

As has been said, its not a bunch of roses outside at the moment. I've taken an effective pay cut of 25% in the last 2 years just to stay employed and I can't remember the last time my wife had a pay rise. I'm amazed at the public sector being so out of touch with reality and going on strike today. I am sympathetic that they are facing difficult times, we all are, but there is no money left, period. It's tough for everyone right now.

[jimjim1]

"...another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks with a billion dollars in new assets."

Michael Lewis author of:-

Liar's Poker - His experiences as a bonds salesman around the mid eighties
The Big Short - The 2007/8 banking crisis - people who saw it coming.
Boomerang - Not read it YET

Eye opening books from an (ex) insider.

[Melchett01]

I am sympathetic that they are facing difficult times, we all are, but there is no money left, period

Possibly a naive question, but as a geographry / met rather than economics type, I'd love to know just where all this money has gone. You can't uncreate money, once it's in the system, it's in the system. Surely what changes is who has it - is the financial system not a zero-sum game?

So assuming it is a zero sum game and we have lost all our money, where is it now? There must be someone sitting on a tidy sum somewhere. And if we have lost it all on the back of a excessive debt burden, then does that not implicate those financial institutions that packaged the money and sold it on as an asset / lent it out as now benefiting in the form of our sky high deficit and debt repayments? And are these financial institutions not the ones we bailed out in the first place?

Or am I being thick and at the state / national level money, debt etc is actually more conceptual and ethereal rather than the cold hard cash I hand over every time I go to the pub?

[Seldomfitforpurpose]

There will no doubt be a hundred different places the money went but lots of ordinary folk will have sold property/business's etc to folk who had borrowed the money from the bank. When the mortgage cannot be paid or the business goes belly up the bank has no way to recover the money.

Whilst we are all quick to blame the banks and yes they should have been smarter about who they lent to there are lots of ordinary folk who have had a finger in the current problem.

[dermedicus]

Or am I being thick and at the state / national level money, debt etc is actually more conceptual and ethereal rather than the cold hard cash I hand over every time I go to the pub?

I'm not economically minded but I think the problem comes from 'theoretical money'. In 2006 my house in the UK was valued at £135000. My neighbour's identical house sold for a similar price. They turned a theoretical value into an actual one and stepped up the ladder. In 2010 when I considered selling, it was £119000. If I had entered into re-mortgaging or financial commitments based upon the theoretical value in 2006, I would have been stuffed, as would those who had lent me money. I would not be able to settle my debt simply by selling and they would have no way of recovering their money. Property prices, which were behind a lot of the wealth people seemed to have, were all theoretical unless you actually sold the house and realised the value.

The Daily Mash has a good article today, suggesting that we scrap this economy and give everybody 5 grand to start a new one.

The Daily Mash (http://www.dailymash.co.uk)

[The Old Fat One]

You can't uncreate money, once it's in the system, it's in the system. Surely what changes is who has it - is the financial system not a zero-sum game?


OK, in aircrew lingo...

Someone borrows some money to buy something (like a house or a business or a dog).

The lender sees that the house etc ain't worth the money they just loaned on it and the borrower don't seem that likely to repay it, so they think..."hhmmm risky". So they chop up the debt and sell it on at a discount.

And the person that buys the discounted debt thinks..."hhmmm risky". So they chop up the debt and sell it on at a discount.

Rinse and repeat several billion times.

And everybody employs loads of clever accountants to do clever things to balance sheets to show everybody has sh1tloads of collateral. And auditors turn a blind eye because...err nobody is sure why yet? Maybe auditors serve no earthly function...discuss? And the clever accoutants pay the *ankers lots of real dosh.

All is well until one day somebody breaks the chain and wants their money back...and, it does not exist. It never did, because all the assets have been "over leveraged". And then everybody wants their money back and all the assets (even the good ones) are now over valued.

Rinse and repeat several billion times.

And that was how funny money was created and removed. The problem is not the removal of the funny money. The problem is the legacy of vastly over- inflated asset values (caused by funny money) which no longer hold the positive equity needed to support the huge debt burden associated with them.

[AnglianAV8R]

Yes, a good description. Here's some food for thought....

Money = debt. All the money that exists in the world has been created by the central banks as debt. So, it is all due to be repaid with interest, but no extra money is created to pay that inteerest. That is the basis of our economic system, there will undoubtedly be losers but somebody gains whenever somebody loses. The clever folks are those who recognise how to exploit this fundamantal truth.

Fractional reserve banking. Banks are allowed to loan more money than they actually have. Many of us have been fed the lie that we get interest as a reward for our money being loaned by the banks, not so. This is a safety net which permits 'lines of credit' to be created against a % of real money in the vault or real assets. In the crisis that started a few years ago, where blame was placed on the risky practices of sub prime lenders, it was really fractional reserve lending that caused the collapse. It is a house of cards at the best of times, but engineered to ensure that those at the top don't lose.

So far as the public purse is concerned, we pay taxes to cover the interest on the borrowing. The loans are repaid by maturing bonds. That is the weak point, when the bonds don't mature as hoped, it becomes necessary to refinance the borrowing and the costs increase. It is all a gamble that is dependent on continued GDP growth. Or, like I said, it is a house of cards.

Every time the house of cards collapses, some people get rich because they acquire the assets of victims of a system that is designed to fail.

As has been alluded to on here, the money doesn't exist. This is increasingly so in the digital age.

A very good five part cartoon film explanation is on youtube. Just do a search: Money as debt.

[NutLoose]

Totally agree, and then we have to put up with the paranoia over what Clarkson said, it was a joke, was said as a joke, was put over as a joke and we have 24,000 odd complaints no doubt pushed by the damn union involved, Who are no doubt on a Kings ransom, have a job for life guarranteed in their contract and a pension far in excess of any of their members, and to top it off the police are investigating it, get a life, this Country has gone to the dogs and the PC brigade.... I thought we had got away from these strikes years ago and hope they Lose..

[LFFC]

Looks like the great and the good have finally decided that they should say something.

Pay deal 'breaks Military Covenant' (http://www.telegraph.co.uk/news/uknews/defence/8967023/Pay-deal-breaks-Military-Covenant.html)

[NutLoose]

Totally agree the Benefits rise is wrong, that sends out the totally wrong signals, but as for as Forces pay rise the Country is still skint........ God I wish I had one over the last few years, but I realise that we have to tighten our belts to survive, I just wish all of those on the public purse thought likewise...... but that said, as with mine, your Military Careers will eventually come to an end and one will then realise the Grass is not always greener on the other side of the fence, well unless you are serving in the Sandpit!

[I'm Off!]

Interesting that during a quick clip from Parliament this morning the point was made that Military pensions were not included in the current pension reforms and negotiations with unions, but that, coupled with Police/Firefighters etc a 'review would take place in due course'.

Here we go...

[Yozzer]

Politics these days; and especially were finance is concerned, frequently engages the cycle of: Announcement -> Monitor response -> Wait and see if it dies a death -> If not, announce a little more $ nearer to the time and tell the world how wonderfull you are. Rather then announce the same (final fiqure) $ -> enter the same cycle of events and end up settling on a larger sum.

Otherwise put as throwing a stone into the pond and seeing how many ripples reach the edge before commiting to a brick. Lets hope so anyway, for a pay freeze followed by 1%pa is a pay cut in anyones book.

.....and if the Militarys WAGs march on Downing Street as they did in 1978; there are some awfully high profile WAGs these days courtesy of the Afghanistan death toll.