More misreporting on public sector pay

Right wing papers have reported a "record" gap between public and private sector earnings. But this includes nationalised banks - the gap shrinks without them.

A range of right wing commentators and newspapers have been keen to highlight that yesterday’s labour market statistics identified a “record” gap between public and private sector earnings.

The Telegraph tells us that:

“This is the first time that the gap, which has slowly widened under the Labour Government, has hit more than £2,000 … this gap of 3.6 percentage points is the widest ever recorded by the ONS.”

And that:

“Nurses, teachers, civil servants and other public workers [were] enjoying an average annual pay rise of 3.8 per cent in the three months to the end of November.”

However, this refers to public sector earnings including financial services (i.e. nationalised banks). When you look at the public sector earnings excluding financial services the gap shrinks to 2.7 percentage points. Over a quarter of the rise that is being reported is a result of rising earnings for bankers.

This is still an earnings gap between the sectors, but not an historic one. As has been regularly highlighted the earnings differential can be accounted for by the composition of the workforce (there are more professionals in the public sector), the fact that the lowest paid workers get paid more in public sector jobs and the diverse performance of earnings in the private sector (for example earnings in distribution, hotels and restaurants rose by 1.8 per cent on the year, and in manufacturing by 1.9 per cent). Ben Goldacre has more on some of the other problems in these kinds of comparisons. At the very least, those who seek to criticise the public sector should get their facts right.

Our guest writer is Nicola Smith, Senior Policy Officer on economic and social affairs at the TUC.

22 Responses to “More misreporting on public sector pay”

  1. Alice Pilia

    RT @leftfootfwd The public sec pay "gap" identified in press includes salaries in nat'd banks //bit.ly/6DJrFd <

  2. Adam Bienkov

    RT @leftfootfwd The public sec pay "gap" identified in press includes salaries in nat'd banks //bit.ly/6DJrFd

  3. Anon E Mouse

    Nicola – The thing is the private sector produces the monies that pay for the public sector.

    As Senior Policy Officer at the TUC I’m surprised you haven’t commented on the fact that some public servants earn more than the Prime Minister which, despite his obvious shortcomings and ineffective ability to do that job, is surely a more relevant point for the TUC.

    People in the UK have serious reservations about the fact our country seems to be reliant on either service industry jobs and the growth, particularly under this current government, of the public sector.

    The private sector is a contributor to this countries growth and needs to be encouraged and supported by everyone, including the TUC.

    If not where will the money in this country come from?

  4. Martin McIvor

    RT @leftfootfwd: The public sector pay "gap" identified in the right-wing press includes salaries in nationalised banks //bit.ly/6DJrFd

  5. More misreporting on public sector pay | ToUChstone blog: A public policy blog from the TUC

    […] being mentioned is only half the story though. Nicola has a blog post up at Left Foot Forward, filling us in on the half that hasn’t been reported. Related posts (automatically […]

  6. ToUChstone blog

    Nicola has a guest post at @leftfootfwd on today's story about the pay gap between public and private sectors: //ow.ly/YVDh

  7. James Anthony

    martinmcivor RT @leftfootfwd: The public sector pay "gap" in the right-wing press inc salaries in nationalised banks //bit.ly/6DJrFd

  8. One Society campaign

    RT @AdamBienkov: RT @leftfootfwd The public sec pay "gap" identified in press includes salaries in nat'd banks //bit.ly/6DJrFd

  9. AndrewSparrow

    Why public sector/private sector pay gap not really as big as it looks (because nationalised banks shouldn't count) //bit.ly/6DJrFd

  10. Jesus Wept

    Nicola – The thing is the private sector produces the monies that pay for the public sector.

    Yes, and the private sector would not be able to generate that money without the public sector: roads for employees to get to work on, schools and colleges for staff to learn the skills they need, refuse collection to enable businesses to keep moving, etc.

    And please don’t presume to speak for what “People in the UK” are thinking. I’m in the UK and I think you’re talking bunk.

  11. John

    RT @AndrewSparrow: Why public sector/private sector pay gap not as big as it looks (nationalised banks shouldn't count) //bit.ly/6DJrFd

  12. Anon E Mouse

    Jesus Wept – Please don’t be so petty. Obviously “People in the UK” can’t include everyone for goodness sake but if there wasn’t a significant proportion thinking that way then the right wing press wouldn’t be so popular in Britain with those types of views and Nicola wouldn’t have a story.

    I’m also in the UK and feel you’re not talking bunk and make a good point.

  13. Jesus Wept

    if there wasn’t a significant proportion thinking that way then the right wing press wouldn’t be so popular in Britain with those types of views and Nicola wouldn’t have a story

    Newspapers reflect the views of their editors and owners, not necessarily their readers. A clear majority of Sun readers voted Labour in 1992 despite the rabidly Tory coverage.

    People buy papers for all sorts of reasons. Don’t take their sales as endorsement of their political agendas.

  14. UNISON EMids LocGovt

    More misreporting on public sector pay //tinyurl.com/y8oehzc

  15. User 1879

    Nicola – The thing is the private sector produces the monies that pay for the public sector.

    Hello? People (whether they are employed in the public or private sector) produce goods and services, and exchange them with one another. The invention of money made this process easier as people no longer needed to barter.

    The argument that the private sector pays for everything in the public sector is so poor it’s laughable. Even if it functioned badly, fully centralised planning still managed to achieve a level of output (despite everything being publicly owned). Taxes on private sector output are simply a transfer (just as taxes on public sector output) to allow government to provide or buy goods and services on behalf of the population.

  16. Joe

    Funny, this thread, like the last on a similar subject ( //www.leftfootforward.org/2010/01/politics-summary-thursday-january-21st/#comments ) becomes yet another amateur economics lesson for a right wing poster clearly just trying to get a reaction.

  17. Anon E Mouse

    Jesus Wept – Agreed on the editors and one can argue that papers like The Sun only really follow the polls and public opinion – I agree that it wasn’t “The Sun Wot Won It” but the damage that these papers can do should not be underestimated.

    If McKenzie’s Kinnock in the lightbulb was bad for the Labour Party then the stuff they’ll throw at Brown will be even worse and I actually do believe that things like that do affect people on the day of an election. I can remember being in a canteen with people laughing at the lightbulb headline.

    Also I would point out that the left is in decline in newspapers – look at the Mirror / Guardian sales and I also believe that if the views Nicola describes were not popular they would not be printed. It’s like this climate change nonsense; people could be forgiven for believing it was accepted by a majority of the public and yet we know from polls that it is not.

    User 1879 – Remind me again where the Public Sector makes a profit for the country. I agree one could argue the NHS for example purchases items from the Private Sector but other than that I cannot see where the Public Sector makes a profit – surely that’s not their remit is it?

  18. BenM

    @Anon E Mouse

    Also I would point out that the left is in decline in newspapers – look at the Mirror / Guardian sales

    All newspapers are in decline – including traditionally Tory supporting ones.

    It’s like this climate change nonsense; people could be forgiven for believing it was accepted by a majority of the public and yet we know from polls that it is not.

    Thankfully most of the polls show that a plurality understand what drives Global Warming. Your self-indlugent denial of the science is way in the minority.

    The thing is the private sector produces the monies that pay for the public sector.

    Like most conservatives, your understanding of economics is minimal.

    Try to remember that companies like Boeing, Lockheed Martin, Airbus, Quiniteq, BAE Systems etc would not exist without government spending.

  19. user2010

    Not only is average public sector pay higher that that in the tax paying private sector but conditions of work ( sick pay, working hours, work discipline) are slacker, job security is way greater and pensions exist. In short why should any young person chose a career in the private sector producing a tradeable product or service when they can work for the state?

  20. SOCIALIST UNITY » AROUND THE BLOGS

    […] Foot Forward enters the fray in countering right-wing mischief-making about public sector pay. Left Foot Forward should also be congratulated in their regular coverage of […]

  21. Nicola Smith

    Great to see so many comments on this post. A few points:

    All public sector workers do not get paid more than all private sector workers, the ONS earnings figures provide an average of the pay bill across entire sectors. The reality, as my colleague Nigel Stanley (//www.touchstoneblog.org.uk/2010/01/publicprivate-sector-pay-what-about-gender/) has shown at length, is that the lowest paid get more in public sector jobs, and everyone with qualifications above A-Level gets less than they would in equivalent private sector positions. The pay distribution in the public sector is therefore fairer – and the reason the overall earnings figures are higher in the public sector is that more professionals are employed there. The growth in wage inequality in this country is a real concern – but it’s not the public sector that is driving it. The TUC’s Touchstone pamphlets on the superrich, and on the squeeze in earnings experienced by middle income families might be of interest (//www.tuc.org.uk/touchstone/frontpage.cfm?theme=touchstone).

    Some comments here seem to suggest that the entire public sector should be disbanded. I can’t see how anyone can believe the entire public sector is an economic inefficiency. National security, infrastructure, health, education and sanitation are all requirements for economic success – the public sector doesn’t just take tax payers money and burn it, it’s invested for the good of society. Similarly, public servants who deliver these services don’t just throw their wages away, they spend them which adds to consumer demand. And – to address a specific point – of course the TUC supports both the private and the public sectors – and we recognise the vital roles that both will play in building our recovery.

    For an example of the role of public services, look at Jobcentre Plus, which has been supporting unemployed people back into work and supporting job seekers to find vacancies and gain skills, meaning that off-flows from benefit are almost double the rates we saw in the 90s recession, that the private sector is able to function more efficiently and that we see real future savings as the social costs of recession are less than they would have been. For those that are interested, there’s more info in a touchstone pamphlet on the public sector here: //www.tuc.org.uk/publicsector/tuc-17205-f0.cfm?themeaa=touchstone&theme=touchstone.

  22. Anon E Mouse

    BenM – So the decline (proportionally) in sales in the Daily Mirror and The Guardian haven’t been (overall) greater than say The Sun and The Daily Mail?

    I am far from a conservative. Both my parents worked their whole lives in Public Service (college lecturer / tax inspector) – my grandfather was a trades union activist and a Labour Councillor. My sister also works in education and my partner is a senior social worker (coal face still – not management).

    I cannot find a single person (stupid enough in my opinion) to vote Labour while that bullying unelected thug Gordon Brown remains Prime Minister.

    I have never voted Tory in my whole life I just happen to be:

    1. Old enough to know truth from MP’s when I see it, hence my current dislike of this government and the hopeless members of the cabinet – I wouldn’t pay them in washers.

    2. Old enough to know the difference between challenging an opinion without smearing and lying about people – again my dislike for people like this useless Prime Minister.

    3. Old enough to know that scare stories – especially ones with no basis in science, such as the current Climate Change nonsense – will be overtaken by newer scare stories. BSE anyone? MMR anyone? GM food anyone? Nuclear Power anyone? Millennium Bug anyone?

    It used to be “Global Warming” until those liars at the IPCC got rumbled so now its “Climate Change”. Oh and the glaciers aren’t melting after all but I bet taxes on poor people (proportionally) will continue.

    I never said the Public Sector should be abandoned and as Nicola stated the TUC doe help privately employed union members. Glad to hear my weekly contributions to Bill Morris and the T&GW weren’t in vain.

    Small point BenM. To be called “right wing” is not an insult to someone who disagrees with 10p tax, Gurkhas and illegal overseas killing sprees by this bunch of liars who have hijacked a decent political party.

    To be called a “Climate Change Denier” is not an insult either – and those companies you mention wouldn’t exist without an arms industry to be supported. There was a time Labour was against an arms industry and supported the poor of this country… sigh…

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