One factor more than any other will help us out of this mess, and that is a global recovery. Former Taoiseach (Prime Minister) Garret FitzGerald and other economists last week said that there could be a slow improvement in the Irish economy from 2011 onwards, assuming that there is a global pick-up next year. Our economy is so open and so dependent on exports that everything hinges on that.
One way or the other, the key to the future in Ireland is getting our costs -- wages and the price of goods and services -- down to a level that will make us competitive again, when a recovery starts. That readjustment is happening anyway in private industry, as companies big and small struggle to stay afloat and workers take pay cuts to hang on to their jobs.
But in the state sector it's a different story. Workers there, backed by powerful unions, are refusing to budge.
During the boom, the benchmarking system -- matching pay for public workers with pay for private workers -- pushed pay for state workers through the roof. But as far as the unions are concerned, what goes up must stay up. Private sector pay is falling, but state workers don't want to benchmark downwards.
There is no better example of this than teachers in Ireland. The big three teacher unions have their annual conferences every Easter, and this year their behavior showed a disconnect from reality and a selfishness that was breathtaking.
One young teacher tackled the Minister for Education Batt O’Keeffe at a conference and told him the cutbacks meant that she had to live on just €90 a week. But when journalists dug into her case they discovered that, at the age of 26, she was actually earning €40,000 euro a year. Like all teachers here she was well paid.
Plus teachers have total job security. Plus, like all state workers, they have guaranteed pensions that cost them, even with the recently introduced levy, less than half what a similar pension would cost on the open market.
And of course, the big plus for teachers is that they get three or four months holiday every year. On full pay.
Teachers have it good in Ireland. They are paid between 30 percent and 40 percent more than teachers in Britain. And it's not reflected in their performance ... in fact over 20 percent of children coming out of the Irish school system are functionally illiterate in English and incompetent in basic math.
To pay the teachers inflated salaries for their short working week (they do less hours in class per year here than teachers in the U.S. and in most European countries), the government is now cutting back on other areas in the education budget. So the school building program, extra teachers for immigrant kids with no English, and other extra school services are all being hit.
And the teachers are up in arms, screaming about an attack on children and using that as a smokescreen to deflect attention away from their own pay and conditions.
Remember that old Pink Floyd classic? Teacher, leave them kids alone!