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December 30, 2005
Public Sector Pay.
A startling claim here:
The Treasury called the alliance figures "nonsense". Overall spending on public sector salaries was £135 billion. That covered 5.85 million workers with an average salary of £23,000 - below the national average, both public and private, of £25,100.
So how come the EOC found that public sector hourly pay was higher than private?
Update. Good guess from Matthew there in the comments. Yes, indeed, private sector pay is indeed more skewed. However, not quite enough to make his main point stand up. Mean public sector pay is higher than mean private.
The figures are here (these might not be the correct ones to answer every point but they are the ones the EOC was using):
Update again. A thought occurred overnight that perhaps there was indeed discrimination in the past and that there might be less of it now. This might mean that those women who were discriminated against, in their training, choice of careers, even, for those who have been in the workforce for forty odd years, the lack of legal abortion and so on (although my views on that subject are fairly sulphurous, let’s just take it as read, for the moment, that unplanned pregnacies will impact on earnings and career development shall we?), even the cultural ethos of stay at home mums and so on.
Hhhmm. So if that was in fact the case in the past but is not so now, or is less so now, then we’d expect to see a greater difference between male and female earnings for those in the older age cohorts than we do in the younger. Is this true?
Median hourly earnings.
Male FT Female FT
18-21 6.20 6.07
22-29 9.35 9.29
30-39 12.42 11.36
40-49 13.24 10.50
50+ 11.43 9.79
So for those under 30 there is in fact no (noticeable) gender gap in pay, for those in their 30s there is some and for those over 40 a considerable one.
This is entirely consistent with two possible causes. That women who take a career break to raise children do indeed get paid less. Not all that much of a surprise there really. That we did indeed have discrimination against women a generation ago and that we do not now.
What it clearly does not show is that there is any discrimination against women who have entered the workforce in the last 10 - 15 years.
So, we had a probem, do not have one now and don’t need to do anything more. So can everyone shut up now and we can get onto problems that really do exist?
December 30, 2005 in Your Tax Money at Work | Permalink
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Comments
I must admit that I find that public sector pay per hour, is higher than private - on average (median) by my calculations.
What I didn't look at was total remuneration - for the private sector bods, this might include bonuses. For the public sector bods - a good pension contribution from the employer.
I think, like gender though, that a close examination of like for like occupations is warranted.
You just can't compare a lot of types of job and work with the private sector. Lots of public sector jobs have incredible qualifications and certificatations requirements. Some private sector jobs have good bonus schemes.
Posted by: Angry Economist | Dec 30, 2005 9:59:13 AM
The hours are shorter?
Posted by: Matthew | Dec 30, 2005 10:01:12 AM
Actually perhaps more the point, wasn't the EOC's figures on median earnings? It seems quite plausible to me that the earnings distribution in the private sector is more skewed than in the public sector. This would raise the average relative to the meadian (for private)
Tim adds: A good point but not sure that it stands up. Should look at the spreadsheet again for it has mean as well as median earnings on it. I’ll report back if I remember to look it up.
Posted by: Matthew | Dec 30, 2005 10:07:14 AM
I've just read a report (sorry, I can't find it now) which said that was the case. Your figures for 2005 don't, but the gap reported is 10% not 26%, so perhaps fewer hours could explain the rest.
Posted by: Matthew | Dec 30, 2005 10:55:43 AM
Incidentally on your figures (I mean the spreadsheet) public sector employment is 27% of the total even if you include "not classified" as private. This seems higher than other estimates - I wonder why?
Tim adds: Dunno. They’re the ONS figures that the EOC pointed to.
Posted by: Matthew | Dec 30, 2005 10:57:10 AM
Please can we use the phrase "extortion funded sector" instead of "public sector" as it has the advantage of being accurate.
The "public sector" does nothing for this member of the public.
Posted by: Rob Read | Dec 30, 2005 12:25:06 PM
The dataset is the Annual Survey of Hours and Earnings - their calculation of no. of employees might be different to the usual sources (ABI or LFS) and might not be seasonally adjusted.
I would use either ABI or LFS for estimates of total employees by sector.
Posted by: Angry Economist | Dec 30, 2005 12:26:06 PM
In 2004 the median was public 452.7 and private,
407.7. For mean, 499.5 and 509 respectively, so it looks it is a combination of a more equal distribution and slightly longer hours.
But the Treasury is right.
Also, and I'm surprised Tim didn't point out, clearly the Cuthie comparision of all private sector jobs mean salary with those of the public sector advertised in the Guardian is clearly nonsense. Jobs advertised in the national press are going to have a higher salary than average.
Tim adds: The thought did occur as I was reading the article. But then it doesn’t make a decent right wing rhetorical point really, does it?
Posted by: Matthew | Dec 30, 2005 12:42:57 PM
Finally, the distribution of the gender gap by age is not totally conclusive, as you would need to know how it splits private v public, particularly as around a third of women work in the public sector.
Posted by: Matthew | Dec 30, 2005 12:56:59 PM
I think there's problems in putting it into age cohorts too.
People's pay peaks in their 40s and tails off in their 50s. This will apply to quite a few folks. So that's something which is likely to influence total pay - i.e. where people's careers are at their most remunerative. Its likely to be a big factor in older cohort's pay. The stats further show that earnings diminish as people get closer to retirement too.
As I mentioned to Tim - it would be good to identify a cohort of occupations which are likely, in theory, not to be too influenced by the comparative advantage of gender - e.g. men - physical strength/ women - caring professions. And then take these 'gender neutral' occupations and run some statistical tests.
At least we ended the discrimination against men concerning state pensionable retirement ages. So the blokes used to get to live less and work longer!
Does Rob Read have an axe to grind? am I detecting some kind of dislike to our public servants?
Posted by: Angry Economist | Dec 30, 2005 2:06:44 PM
> "Does Rob Read have an axe to grind? "
No, but I am sharpening the axe for our "public Servants"
> "am I detecting some kind of dislike to our public servants?"
When you find someone in the extortion funded sector who actually serves can you tell me?
Posted by: Rob Read | Dec 30, 2005 3:42:05 PM
Angry Economist says: "People's pay peaks in their 40s and tails off in their 50s". On average this may be true but not, I suspect, for individuals that manage to stay in the same employment. If you manage to stay in the same employment, pay tends to continue to rise.
If you work in the private sector and are made redundant aged over 40 (a very common occurence these days since the UK has had the worst industrial output performance of any G7 nation since 1997), your chances of finding another job paying anything like a similar salary are close to zero. In fact, in many areas, your chances of finding any work at all, however skilled you are, are low (hence the rise in self-employment).
Public sector employment, of course, is much more secure, so I suspect that average public sector salaries don't decline at all with age.
Has anyone ever seen any figures on this?
Posted by: HJHJ | Dec 30, 2005 4:25:57 PM
HJHJ - I have actually looked at the aggregate figures for weekly pay by age on the LFS and you get a nice graph with pay on one axis and age on the other where pay increases to 40 to 50 years of age and then the curve decreases.
I have also analysed redundancy and the number of jobs held by people by age and gender etc - and there is no sign that his has worsened!
The facts are all there about work conditions - its all in the Labour Force Survey. Job insecurity has not increased. A lower percentage of 'job seperations' are involuntary now compared to 10 years ago.
If anything - jobs are a bit more secure overall in the economy.
Its a labour market myth! see here:
http://www.futureskillsscotland.org.uk/uploadedreports/Myth_jobs_are_more_insecure2004JULY3.pdf
http://www.futureskillsscotland.org.uk/uploadedreports/Scottish_Labour_Market_Report_2003.pdf
As for Rob Read - I think it would be better if you were a bit more expressive in your critique of the public sector - would help us understand your anger. I am not slagging you off - but rather more interested in why you hold these views.
Posted by: Angry Economist | Dec 31, 2005 10:46:02 AM
