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”
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 (http://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 (http://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: http://www.tuc.org.uk/publicsector/tuc-17205-f0.cfm?themeaa=touchstone&theme=touchstone.
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…