Public sector pay: some unstraight statistics from the Sunday Times
The Sunday Times has some shock horror statistics about the public sector today – and I suspect because they know they are dodgy – they have got Straight Statistics to validate them. The Sunday Times says:
The analysis was validated by Straight Statistics, a group that campaigns for the accurate reporting of official data.”
Straight Statistics say:
Straight Statistics is a pressure group whose aim is to detect and expose the distortion and misuse of statistical information, and identify those responsible.
Yet this article contains very few straight statistics – it both distorts and misuses official statistics. I hope that the group has been guilty of naivety by allowing their name to be used in an article whose final text they did not see. If they did approve the final text, then they have some serious questions to answer.Let us look at the problems one by one.
The first error is in the opening sentence. It says:
Public sector workers earn 7% more on average than their peers in the private sector.
But the figures they use are the average for all workers in the private sectors compared to all workers in the public sector. If they were comparing peers, they would be looking at people doing the same job in the public or private sector.
Next, the figures they use are taken from the 2009 Annual Survey of Hours and Earnings produced by the ONS. The Sunday Times uses Table 13.7A to get their figures for average pay. This is the figure for gross annual pay. It takes no account of how many hours people work as it mixes up full and part timers. A legitimate way to compare pay between different groups of workers is to look at hourly pay. This is not hard as it is Table 13.5a on the same page (pdf).
Producing figures for peers is hard because the jobs done in the public and private sector vary such a lot. But one way of approaching this is to compare pay by educational qualification. You can read my post that does this here but to summarise briefly:
- Public sector graduates are paid 3.4 per cent less than in the private sector
- Public sector workers with higher ed short of a degree are paid 6.2 per cent less than in the private sector
- Public sector workers with A levels are paid the same
- Public sector workers with lower skills get paid more than in the private sector.
Pay in the public sector is flatter than the in the private. The low paid do better in the public sector because there are few minimum wage jobs in the public sector, and the rank exploitation of vulnerable workers that happens in parts of the private sector is missing. At the other end pay for skilled workers in the public sector is lower, and there are fewer public sector fat-cats and they are a lot slimmer than their feline counterparts in the private sector.
Studying historic changes in this way is even more prone to error.
If you look at the difference between average annual pay in either sector from one year to another, there are lots of different factors that will contribute to a change in pay in addition to any pay increase.
- the ratio of part-time to full time workers (and the hours breakdown of the part-timers)
- non-basic pay such as overtime and bonuses can vary from year to year.
- the composition of the workforce (ie if the number of well-paid skilled staff increases and the number of low-paid less-skilled workers decreases then average pay will increase without anyone getting a pay rise.)
As the article concedes there has been a big increase in the proportion of graduates working in the public sector over time. This reflects both increased employment of staff such as doctors and teachers, but also the continuing trend to contract out unskilled jobs such as cleaners.
The article says:
The (pay) lead of the typical state employee stands at 7%, compared with 3% the year before. Until 2005, private sector workers received more on this measure and as recently as 2002 enjoyed a 5% lead.
But this again looks at the annual pay figure (source table 13.7a here). In my post here I looked in detail at the notion popular with the small state right that public sector pay has overtaken private sector pay. The figures show that the median hourly pay for full-time public sector workers has been higher than that for private sector workers since at least 1984. This is simply down to the higher number of professionals in the public sector.
Last year the average public sector worker laboured for 35 hours a week — a fall of an hour on the previous year and 2.5 hours less than the typical private sector worker.
This figure is taken from Table 13.9a here. This is for all employees whether part-time or full-time. It also only shows paid hours. The change may be due to more part-time workers being employed in the public sector, or cuts in overtime in the public sector. This table simply doesn’t tell us. Many workers in both the public and private sectors do unpaid overtime. So the Sunday Times figures tell us nothing about the effort put in by private and public sector workers.
Let’s finish with a Pinteresque non-sequitur:
Most private sector workers have to work until they are 65 to claim their company pensions; the average public sector retirement age is 58.
Pension age is not the same as retirement age. Your pension age is one of the figures used to calculate your pension in a defined benefit scheme. If you retire before your pension age, you can still claim a pension but it is reduced. Retirement age is when you stop working – and is below 65 in the private sector too.
Most private sector workers are not in defined benefit pensions in any case – in fact nearly two thirds are not contributing to any employer backed pension.
Of course in some ways public sector worker have done better under this government. After all it was elected in part to put right the crumbling and neglected public services. Pay which had been held down did catch up to some extent (although there have also been pay caps in subsequent years.) There are more nurses, doctors, teachers and other, just as vital, public servants than there used to be.
During a recession it is not surprising that pay does badly in the private sector, particularly when there has been short-time working and sharp falls in paid over-time. Typical public sector pensions are better than private sector pensions. There are many rich and detailed official statistics that can no doubt be cut in various ways.
But this Sunday Times article distorts and misuses official statistics. I thought Straight Statistics was set up to stop this, not validate it.
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