…but it pours.

If there’s one thing that’s almost as bad as the faux survey carried out by PR people for companies seeking to generate publicity (see my post on Public sector workers unemployable – shock, horror), it’s the research carried out by think tanks seeking, er, to generate publicity.

This last week brings the latest example to knock the public sector, from the Policy Exchange (“David Cameron’s favourite think tank”) – Public and private sector terms, conditions and the issue of fairness.

This effort was widely reported in the media over the weekend.  Google News lists 142 articles so far.

The premise of the research is that

public sector pay is higher and continued to grow faster than private sector pay during 2010 and that significant reforms will need to be made to limit job losses in the public sector and to achieve equity and fairness in the labour market.

As with many of these things the conclusions and the inevitable recommendations (end national strike balloting in the public sector; replace the two-year pay freeze with a paybill freeze; reform public sector pensions) are reached after a cursory trot around a complex series of data sets.

Without spending a lot of time on the detail and seeking the views of those better qualified than me in the field of labour market statistics, I don’t have a snowball’s chance in hell of providing a reasoned critique of this work on the day (as I write) that this came to my attention thanks to the BBC Radio 4 Today programme.

In the meantime, of course, 142 – as we know thanks to Google – mainly UK media outlets have summarised and punted the findings in a mainly uncritical way, with the main countervailing viewpoint coming from the TUC who are just about as objective as the Policy Exchange, but in another direction.

And it’s out there in the public consciousness.  That vague feeling that yet again the public sector has been proven to be (choose your adjectives) bloated, inefficient, out of touch, unsustainable, etc. etc.

It’s a shame because reform, in all sorts of things, is needed in the public sector.

It’s just that a first examination of this particular work doesn’t provide the conclusive evidence that would lead to the particular proposals the Policy Exchange comes up with.

For example

  • Much of the analysis is based on a remuneration premium the authors claim public sector workers enjoy compared with the private sector.  Put simply this is a higher pay rate per hour for similar work
  • The main comparisons are made for 2009 and 2010 when the gap in pay rates between the two sectors is said to have widened for all levels of pay (except interestingly at the highest managerial level where the private sector has the edge)
  • Tucked away towards the end of the publication, and uncommented on for this purpose, is a table showing longer term trends in the public/private sector pay relationship between 1997 and 2010 demonstrating that between 1997 and 2003/04 the private sector enjoyed the pay premium.  This is followed by the authors’ own projections which show that if the current public sector pay freeze is maintained the current public sector premium will decrease and give way (or return) to a private sector premium by 2016/17, i.e. in five years time.  Which suggests there is some truth in my own conclusion that public and private sector pay relativities are both cyclical but at different times (see for example my earlier post on New year, hard times – public sector pay revisited)
  • In order to make sense (or not) of the analysis, you’ll need without much help from the authors to get to grips with some subtle statistical definitions like median gross, mean, median, hourly median, nominal change, and 10th, 25th, 90th etc. percentile
  • You’ll also have to take on trust that when they compare particular categories of worker in the two sectors, for example, housekeepers and related occupations, therapists, and security managers they are comparing apples with apples and not apples with pears
  • Interestingly, taking the comparability of these occupations at face value the evidence is not always as conclusive as the authors suggest.  For example, the median annual pay for sports and leisure attendants in 2010 was all of £162  more in the public sector, a whopping 1.6%, while the median pay of electronics engineers was actually a modest £3,500 or 8% higher in the private sector. Am I getting my percentages confused here or are they?
  • Some of the occupations exemplified do not allow easy comparison.  For example, how many policemen (sergeant or below) (sic) are employed in the private sector?

Was there ever a think tank with a political or ideological affiliation that found evidence to contradict its fundamental beliefs?  There was a reason that Private Eye many years ago dubbed the first ever Prime Ministerial think tank, “Ted Heath’s wank tank”.  Crude but telling.

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