Tuesday, 7 October 2014

Public versus Private Sector Pay

Proinnsias Breathnach: On August 26 last, the Irish Times published an article with the headline “Public sector pay a third higher than private sector” in the front page of the Business section.  This was a highly irresponsible headline of the type one might expect to find in the Sunday Independent.

If the Irish Times presented a headline stating that, on average, workers in solicitors’ offices are much better paid than workers in supermarkets, readers would immediately regard this as being obvious, given the major differences in qualifications and hence pay rates between the two.

Essentially the same situation applies to comparisons between the public and private sectors.  There is a much higher proportion of professional people (e.g. teachers, doctors, nurses, administrators) and a much lower proportion of unskilled people (e.g. retail, catering, hospitality workers) in the public sector and therefore one would expect average pay rates in the sector to be higher.

To quote the 2010 Employment Survey (the most recent to be published by the Central Statistics Office), “on average, public sector employees had higher educational attainment, longer service, were older, and were more likely to be in professional jobs than their counterparts in the private sector.”

The 2010 Survey found that, while overall average weekly earnings in the public sector were 35 per cent higher than in the private sector, when allowance is made for these and other variables (including organisational size), the gap between the two for permanent full-time employees aged between 25-59 was only around 8 per cent and had fallen from around 13 per cent in 2007.  

Furthermore, the gap was greatest between workers at the lower end of the pay scale while at the higher end, private sector earnings were higher than in the public sector.

Misleading headlines such as the one used in the article referred to do nothing to promote balanced and reasoned debate on this topic and instead are conducive to the kind of emotive language (“inflated public sector pay”, “tiger wages” in the public sector) attributed to the Irish Small and Medium Enterprises Association in the same article.

I sent a letter to the Irish Times putting the above points, but it was not published.  I routinely send letters to that newspaper seeking to correct what I believe to be errors of fact or interpretation which have appeared in the paper but these are hardly ever published.  I am thinking of changing my name to Anthony Leavy!

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