Dec 2011 01

Union myths unravelling7

Following up on our release yesterday confronting union myths, and TPA Research Director John O’Connell’s blog for this site, I wrote for the Spectator Coffee House about the TUC using a poll which showed the public had a good idea of the value of normal public sector pensions to try and sell their misleading average pension statistic.

Since then the Institute of Fiscal Studies have estimated that public sector workers are 7.5 per cent better paid, even after “allowing for the higher age and qualifications of public sector workers”.  Their work confirms the figure from the Office for National Statistics which we have been quoting.  The unions just can’t defend the strike except with misleading claims that fall apart when challenged, like they did when I debated the issue with the ATL President on Sky News:

 

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  • http://twitter.com/Fulby Andrew Campbell

    Well done to Matthew Sinclair for getting some facts across.

  • of-course-blog

    I think it is questionable “that public sector workers are 7.5 per cent better paid” but even if it is true all it is doing is highlighting the poverty wages that the private sector pay to the vast majority of its workers. The problem is with the private sector ripping people off and not the public sector. As a taxpayer I begrudge my taxes being squandered on subsidising the private sector.

    • http://www.taxpayersalliance.com The TaxPayers’ Alliance
      • Blarg1987

        It is questionable when you are not comparing LIKE for LIKE such as private nurses / teachers and PMC’s to their state equivelent.

        Also of note alot of public sector jobs have been outsourced over the last 20 years mainly at the bottom end, where the public sector is now a contractor of services rather then a service provider, this has meant low salary jobs being transferred over to the private sector shifting the avergae pay in the public sector up, and decreasing it in the private sector.

        Also the statistics used do not include the following:

        Any pwerks in the public or private sector such as compamny car, health insurence, paid christmas meals, subsidised / free holidays.

        Again, will the TPA plese do research showing like for like so a fair none biased compariison can be made.

  • Dave

    You refer to IFS findings but link to a page in today’s Telegraph, rather than to the source material. This is poor practice.
     
    I have now looked at the relevant IFS presentation by Carl Emmerson and acknowledge that, at face value, it presents a balanced view. Interesting then to dwell upon a few of the other points it raises.
     
    - The graph presenting growth in public and private sector pay clearly demonstrates that, with the exception of the anomoly in 2009, growth has been similar. I could select early 2007 and observe that public sector pay was rising at about 2% whilst private sector pay was at 9%.
     
    - The public-private wage differential for men is much lower than the figure you quote. It’s +4.3% with a standard error of 1.3%. Not small, but significantly lower than the higher figure you quote, which is driven by the differential for women. (Perhaps this indicates lesser gender discrimination in the public sector.)
     
    - The male differential will be eliminated by 2014/15. Increases in employee pension contribution are effectively a pay cut on top of this.
     
    - Public sector pay is not statistically higher in London or the South East.
     
    - Current public sector pension schemes are not unaffordable.
     
    Actually there’s a lot more of interest, and I accept there is a case for change. However, it is disappointing (but entirely predictable) that you choose to highlight a single average differential.
     
    I conclude that Andrew Campbell is correct to congratulate you for “getting some facts across”. He should however have emphasised the “some”.

    • http://www.taxpayersalliance.com The TaxPayers’ Alliance

      Dave,

      The combined figure provided by the IFS is that public sector workers earn 7.5% more than their private counterparts, having accounted for differences in education, age and qualifications. There is nothing misleading about stating as much.

      We would suggest you read the ONS report, which examines in greater detail than possible in a powerpoint presentation, or indeed a blog, the various differentials inherent in this kind of comparison, their distortionary effects, and their statistical mitigation.

      Public sector pension schemes, in their current guise, *are* unsustainable. The Hutton Report, the Audit Commission, the Public Sector Pensions Commission and many others are utterly unequivocal about this.

      Even following reform, public sector pension schemes will remain far more generous than most in the private sector could ever enjoy.

      • Dave

        It is always misleading to quote selectively and without caveat. However, I do not dispute the IFS suggestion that the corrected differential is 7.5%. I merely point out that it is the nature of averages that detail and structure is lost, and I observe particularly that gender and regional variation are key.
        And since it is you who have chosen to use the IFS work in support of your argument, I have thought it appropriate to address other issues raised in that work.

        I am sure you are right to claim that the trade unions are guilty of using statistics in a misleading fashion but, having done so, a reasonable person might expect you to uphold a higher standard. Anyone who is prepared to claim that “there is nothing misleading” in quoting a single average at a point in time has a most limited grasp of statistics.