Lucky13 said:
Prestwich_Blue said:
Won't it?
According to the IMF's formula, an increase of 1% in public sector pay would:
- generate around £750m in various direct taxes;
- inject between £500 and £900m into the economy;
- create up to 20,000 jobs in the private sector.
I don't dispute any of the above , what I do dispute is that increasing public sector wages will increase private sector wages which you have claimed will happen.
I think we can both accept that wage rises can only be paid out of increased productivity.
Productivity can only increase if demand is there to support extra output.
Demand is stimulated by people having more money in their pockets.
Therefore injecting extra money into the economy via the public sector would stimulate demand, lead to rising productivity which, in turn, would fund wage rises. The problem with the current situation is that wage rises are not being funded by increased productivity.