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.
Convener, Unison Scotland,
14 West Campbell Street, Glasgow.