Below is some background information on public sector pay and union pension myths, as well as an assortment of recently published work that you may find of use.
The TaxPayers’ Alliance is today also releasing a new online calculator that allows someone in the private sector to assess how their total remuneration per hour is comparable to that enjoyed by public sector workers on significantly lower salaries.
Public sector workers are significantly better paid than those in the private sector. Research at the Office for National Statistics concluded in July that “after accounting for: gender, age, occupation, the region that the job is located in, and factoring in qualifications, the public sector, on average, earned 7.8 per cent more per hour (excluding overtime) than the private sector in 2010”.
The unions are propagating two key myths about public sector pensions:
1. They claim that Chart 1B in the Hutton Report shows public sector pensions are affordable. But that chart is based upon pension accruals and pensions-in-payment growing with CPI, rather than RPI, which is one of the measures the unions are striking against. They cannot have it both ways. The projections shown in that chart are also the result of assumptions about public sector workforce and economic growth that may prove optimistic.
2. They claim that the “mean average public sector pension is £7,000” and “the majority” receive less. But that average will include a large number of workers who were only in a given public sector job for a short period of time, and have therefore only accrued a small public sector pension. With a 30-year career in the public sector, workers can expect generous pension provision:
Public Sector Pension Gap (Nov 2011) – Research showing how, excluding the NHS, there are already more public sector workers drawing a pension than there are working and paying in to the system.
Taxpayer Funding of Trade Unions (Nov 2011) – How the taxpayer subsidises trade unions to the tune of at least £113 million each year through direct grants and “facility time”.
Trade Union Rich List 2011 (Sept 2011) – The comprehensive annual run-down of the now 38 trade union bosses who took remuneration packages worth more than £100,000 in 2010-11.
Reacting to the strikes, Matthew Sinclair, Director of the TaxPayers’ Alliance, said:
“It is incredibly unfair that taxpayers already struggling with the bill for the higher pay and better pensions enjoyed by public sector workers are now facing the disruption of a massive strike. Even after the proposed reforms, staff in the public sector will still get a great deal. The unions need to be more realistic and stop expecting everyone else to pay so much for public sector pensions.”