When I moved from the public to the private sector my pay nearly doubled overnight, for basically the same job – only with significantly less responsibility and much more opportunity to skive. Yeah, it’s anecdata, make of it what you will.

Oh, and I subsequently found out that they’d had to take on two people to replace me…

Good work Dave, I spotted this tripe in the Evening Standard yesterday.

Doubtless he would argue that the investment banking gravy train – a veritable Train à Grande Vitesse compared to the council white collar employee suburban stopping service – must be allowed to trundle on in the national interest. Perhaps I am missing something here?

Yes you are.

The fact that the much commented-upon bankers’ bonuses are effectively commission or payment-by-results or ‘no-win-no-fee’ payments or whatever you want to call them. They don’t get them unless they produce results.

By contrast, public sector employees are generously rewarded for persistent failure. They are promoted without regard to the shambles they leave in their wake or their past records of presiding over catastrophe. Then they retire with index linked pensions worth two thirds or more of final salary.

It’s no way to run a chip shop in a recession.

The fact that the much commented-upon bankers’ bonuses are effectively commission or payment-by-results or ‘no-win-no-fee’ payments or whatever you want to call them. They don’t get them unless they produce results.

Rubbish. In which case why are all these people leading half-bankrupt banks getting bonuses?

It’s not the pay, it’s the number of them, doing whatever a diversity outreach worker does, on my tick.

So… poor benighted bin man, nurse or social worker can have a well deserved raise, but at the cost of a community cohesion co-ordinator going on the dole.

simples.

I see the Maily Telegraph has woken up: the Murdoch flagship Times and Sunday Times have been campaigning against the public sector for a while.

I picked up on this back on 3rd January:

http://zelo-street.blogspot.com/2010/01/broadsheet-watch-4.html

which referenced an older article in a sister paper.

Similar line of attack to the Telegraph. Ben Goldacre has done a rebuttal of the piece I referenced in his Guardian “Bad Science” column.

Oh… and sunny, There may be a very very profitable forex team at RBS. The fact that they work for a bank without profits means they shouldn’t get their contractual bonus for the profits they’ve generated (losses they’ve averted)? Because what’s happened with this banker bashing is that anyone who can command a big bonus, ie the profitable people, are fleeing RBS.

Do you, as a tax-payer want a return on your investment? Or do you want RBS to go broke?

It’s really annoying that senior people in business and politics are labouring under a misapprehension of what the private sector does.

We are often subjected to nonsense such as “wealth creating” private sector and “wealth destroying” public sector.

1. But what about the 12% of GDP that is publicly-funded output produced in the private sector? Are binmen paid by Biffa part of the “wealth-creating” sector and binmen paid by Hackney part of the “wealth destroying” sector? Would the civil service magically become part of the “wealth creating” sector if a future government outsourced all roles to a private sector “civil service company” that did exactly the same activities as it does now?

2. Does it make any sense to include people – who are low-paid – that are in jobs that are entirely publicly funded (e.g. security guards on government buildings, cleaners in government buildings) as being in the private sector?

3. Do business leaders seriously argue that education, health, infrastructure and a whole lot of other spend is “wealth destroying” when it so clearly benefits their businesses?

Another annoying thing not noted in the current whinging is that the true public sector pay increase running at 2.6% per annum is inflated to the quoted 3.9% per annum by the inclusion of RBS et al in the public sector figure. And we don’t know anything about who is getting the rises – civil servants and local government admin staff are definitely on cash pay freezes (and real wage cuts) right now and for the forseeable future

Articles like this were very common in Ireland throughout last year especially in Sir Tony’s papers. Ultimately, the government imposed a pension levy on all prospective recipients of public service pensions and, by year end, an actual pay cut for all public servants.

“Inevitably, then, comparing mean averages is not comparing like with like.”

Absolutely Dave, you’re spot on. Let’s just hope everyone around here remembers this when the gender pay gap figures come out shall we? We shouldn’t compare mean averages because that is not comparing like with like. We need to compare in more detail, human capital, levels of training, years on the workforce, trade offs between money income and fringe benefits (like flexibility), different jobs done, different hours done…..you know, as we should in the public/private sector comparison.

Shouldn’t we?

Quite right Tim – Harman’s publication around the Equality Bill put these stats in quite a ridiculous way just comparing average wages without adjusting for anything (though we also need to consider the reasons for these underlying differences too in thinking about discrimination).

If only this desire to look at statistics in an accurate way applied to subjects where looking at stats in a basic and stupid way is favourable to right-wing interests as well (say, public pay, for example)

“Let’s just hope everyone around here remembers this when the gender pay gap figures come out shall we? ”

“Quite right Tim – Harman’s publication around the Equality Bill put these stats in quite a ridiculous way just comparing average wages without adjusting for anything”

Do you have a link to these publications, Sevillista? I always understood that the figures relied upon were adjusted for relevant factors.

(Although I’m also interested to hear from Tim Worstall exactly how the figures should be adjusted for ‘human capital’ and ‘flexibility’ – particularly the latter, given how often ‘flexibility’ is a euphemism for ‘we can send you home/fire you if it’s quiet’.

“I always understood that the figures relied upon were adjusted for relevant factors. ”

Nope, sorry, they’re not. They are exactly the same raw figures from the ASHE survey done by the ONS as are used in this comparison of public/private wages.

They are the mean/median figures for all women working full time as against all men working full time. No adjustment is made for any of those other “relevant factors”.

Indeed, it gets worse than that. The “part time wage gap” is calculated as the difference between women working part time and men working full time. Yes, really. Not between women working full time and women working part time. Not between men working part time and women working part time. I’m pretty sure I was the first to point out this emperor’s no clothes thing a few years back, at least publicly point it out.

And yes, I think it still stinks.

“Although I’m also interested to hear from Tim Worstall exactly how the figures should be adjusted for ‘human capital’”

Been done a number of times. Have men had more years of education? More years in the workforce? More experience? Go look up the literature, why don’t you? The clearest fact from the research is that women spend fewer years in hte workforce. If (and it’s not a huge leap) value at work depends upon experience then less experience will lead to lower value and lower wages.

“and ‘flexibility’”

Again, the academic literature shows that women tend to (note “tend to” and “on average”) value felixibility of working hours more than men do. So women trade what they desire more, that flexibility, for income.

Sure, we can ask why this is so and we might arrive at the assumptions of a patriarchal society that insists that women carry the burden of child care and caring duties for the wider family (or even that men and women are equal under the law yet different) but that in our current society this choice is evident is still true.

To supplement what Tim has said, even after adjusting for all of the other factors there is still a significant unexplained gap – attributable to discrimination (or – plausibly- factors outside the model. Though the consensus is discrimination).

The link to the offending document is http://www.equalities.gov.uk/pdf/NEWGEO_FairerFuture_may09_acc.pdf

See this for a more sensible view http://wpeg.group.shef.ac.uk/papers2009/10Olsen.pdf – in this study, an
hourly pay gap of 9% due to discrimination (ie 41% of the total pay gap of 22% identified in Harman’s document)

It’s a shame Tim W does not get het up about the even more simplistic use of raw public v private pay comparisons. Maybe bending stats is only a problem if you disagree with the conclusions reached?

“It’s a shame Tim W does not get het up about the even more simplistic use of raw public v private pay comparisons. Maybe bending stats is only a problem if you disagree with the conclusions reached?”

But I do get het up about exactly this. I’ve had back and forths with several people about exactly this point (ie, Adam Lent over at Touchstone).

Sunny H @ 4

In which case why are all these people leading half-bankrupt banks getting bonuses?

The guys that got them half-bankrupt have been fired. The new guys brought in to get them profitable again are being offered bonuses to do do. As the chief exec of RBS told the select committee last week, he doesn’t see a penny of it unless he hits his targets.