Public sector pay and productivity easily stand comparison with private firms
Published on 28 Jul 2010 in The Herald Letters
Andrew
McKie appears to argue that because some workers in public services
have a vote in the Labour leadership, they should face redundancy and
wage cuts (“Public sector unions need to bite the bullet and accept cuts”, The Herald, July 26 ). He is surely entitled to this bizarre
opinion but it’s one I’m sure few Herald readers will share. More
serious is the way he repeats distorted figures about pay and
productivity in public services (courtesy of the right-wing campaign
group Policy Exchange).
He tells us
that public sector workers are paid 30% more per hour than those in the
private sector. This raw figure is meaningless because like is not
compared with like. The Office for National Statistics Labourforce
Survey lists 8.6% of private employees as professionals, whereas these
form 24.5% of public employees. Incidentally, including the employees of
nationalised banks in the public sector earnings figures is a good way
of inflating them, but not really representative.
The
only meaningful comparison between public and private is to look at
similar levels of qualification. This shows graduates in public services
are paid 3.4% less than those in the private sector. Those with higher
education qualifications short of a degree are paid 6.2% less, and those
with school level qualifications are paid the same.
Andrew
McKie tells us that public sector productivity has fallen. The Office
of National Statistics says productivity has shown positive growth since
2006. Productivity did fall in the early years of the decade, but this
was to be expected as there is an inevitable lag between upfront
investment and improved output and outcomes. That rates of productivity
improvement are faster in the private sector is also to be expected. The
private sector includes manufacturing, where technology can replace
workers. Public services are inherently labour-intensive. These are
factors which are well understood by economists, but not it seems by
ideologues.
Part of Andrew McKie’s
justification for an attack on workers who provide public services (and
it’s typical that he shows no sign of having thought about what the
impact will be on those services) is that so much pain has been endured
by the private sector. Really? A report by Incomes Data Services says
bonus levels in FTSE-100 boardrooms have increased by an average of
22.5% over the past six months to just shy of £559,000. Salaries have
risen by 7% from last year.
It’s also
not just the big companies who are cashing in. According to the survey,
which looked at 237 directors in 180 listed companies, bosses of FTSE
250 companies have seen their total incomes (salary and bonuses) rise by
8%, and Small Cap directors’ pay went up by 5.3%. No-one in the public
services is contemplating those sorts of pay rises.
Andrew
McKie in his bid to paint the Labour Party as a wholly-owned subsidiary
of unions representing workers in public services wildly overstates our
influence. To take just one example – were ours the decisive influence,
Labour would have long since abandoned the wasteful folly of PFI.
Contrary to Andrew McKie’s “whip hand” fantasies, our priorities remain,
as always, the protection of public services and those who work in
them.
Mike Kirby,
Convener, Unison Scotland,
14 West Campbell Street, Glasgow.
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