Quality | 2009.10.19
Say it again, say it often: the public sector is paid less | Polly Toynbee
In a triumph of upside-down logic, the myth that an overpaid state sector is to blame for the crisis has taken poisonous root
Remember, this week is exactly a year since the banks tottered , when only the power of government stood between us and a worse depression than the 1930s. I met a level-headed senior economist that day in the street who said buy pasta, lentils and tins, quick.
What a long time a year is in politics. Since then the Cameron and Conservative myth machine, aided by their progeny, the Taxpayers\' Alliance , have rewritten last year\'s history. In a breathtaking logical somersault they have persuaded people that state extravagance is to blame for the deficit, not reckless banks. "It is more government that got us into this mess!" David Cameron declared in last week\'s speech , to cheers from the conference. No, it was not. Only a lot more government and mountains more taxpayers\' cash got us out of a mess caused by runaway financiers.
It took upside-down logic to blame the victim: the swollen state became the cause, not the result of the bankers\' recession. It must be cut, shrunk, shrivelled and taught austerity while its featherbedded denizens are dosed with corrective medicine. If the Conservatives win, that\'s what Cameron and Osborne promise loud and clear, cutting both the size of the state, which means jobs – and cutting pay.
So there would be a freeze in most of the public sector. George Osborne said a year\'s freeze could save the equivalent of 100,000 jobs . People are often willing to hold back pay if it saves their jobs in a crisis, but Osborne\'s freeze is not accompanied by a no-sacking pledge. On the contrary, he would cut the civil service by a third, starting with a 25% cut from the Ministry of Defence.
In hard times it is easy to create scapegoats – and so the myth that an overpaid public sector is to blame has taken poisonous root in public opinion. The Taxpayers\' Alliance purveyed this non-statistic: "State workers now earn an average of £62 a week more than their private-sector counterparts." They add, "We cannot pay these enormous bills for people who are not creating wealth."
This is nonsense economics when state spending is the main motor of growth. But it\'s also a rubbish figure concocting a fallacious average. You can\'t average out the two sectors because there are five times more unskilled workers in the private sector – most manual jobs have been contracted out from the public sector. The state sector is far more highly skilled: ONS figures show only 8.6% of people in the private sector are in professional grades, against nearly a quarter in the public sector. Comparing grade for grade, they are paid 70p an hour less for working for the state.
Even then, comparisons are difficult as so few jobs are genuinely comparable. We all encounter some disobliging jobsworths in the public sector; no one claims the six million public servants are all saints. But most state jobs are, by their very nature, more responsible and stressful, requiring multiple skills in dealing with difficult public needs – and mistakes matter more. That\'s true in the "bureaucracy", whether in the Department for Work and Pensions dealing with welfare-to-work and benefit claims, or in Revenue and Customs, dealing with tax or tax credits – before considering nursing, teaching or social work. Managing a hospital, a local authority or a large comprehensive far exceeds in skill, complexity and stress the job of managing an equivalent-sized company with a single objective – the bottom line. Nonetheless, these rarer public sector skills are less well-rewarded than in the private sector. Say it again, say it often, they are paid less – for the lie has become a generally accepted truth.
Here\'s some history: between 1993 and 1999 the public sector was badly squeezed. An acute shortage of nurses, teachers and doctors and other skills ensued, as it always does. Labour paid out for a good catch-up between 2000 and 2004, which transformed the number and quality of people entering these professions. But after 2005 the brakes came on again. In 2008 inflation was 4%, but the public sector was on 2.5%. The crash caused a brief anomaly when public sector pay rose while inflation plummeted. Nonetheless, according to Ken Mulkern of Income Data Services, the public sector still lagged 1% behind the private sector for most of 2008 – average private-sector pay rose by 3.5% while the public sector only got 2.5%.
Ah, but look at their gold-plated pensions! Yes, pensions are their traditional compensation: those whose private pensions have tanked look on with envy. But the real problem is everyone else\'s lack of occupational pensions, especially women, not excess in the public sector, where the average is only £7,000 a year. Reduce that, and the state makes no saving, as people are so poor they draw pension credit instead. Scapegoating public employees isn\'t the answer to a private sector where employers once gave 8 million people pensions while now only 2 million receive them. Meanwhile, half of all pension tax relief goes to the top 10% of earners, and a quarter goes to the less than 1% who earn over £150,000.
Those who took a freeze this year didn\'t lose much, with inflation so low, but next year Income Data Services predicts inflation at 2.5% to 3%. That means Osborne\'s total freeze – or Alistair Darling\'s 0%-1% rise – imposed across the public sector will hit them much harder. In the present anti-public sector climate, they are likely to keep falling behind. The old cycle will repeat itself as talent is drawn away leading to key skills shortages, less qualified applicants and a downgrading of esteem, status and respect for the work they do.
If these times need sacrifice, the pain has to be fairly shared. The asset sales announced by Gordon Brown yesterday are only a small contribution. Grossly dysfunctional pay scales in the private sector have leached into the public sector, where the gap has also yawned too wide – but less so. Neither Labour nor Tories have anything to say about unjust pay structures, but they can\'t expect the public sector to take the hit alone. Where is the quid pro quo?
Tory thinkers predict a cascade of strikes over public pay and job cuts, with a hint of "bring it on" bravado: let\'s have the great showdown. They eye the management and workers\' mutual suicide pact in Royal Mail with glee – strikes make privatisations easy. Cameron and Osborne declared war on the public sector last week, heralding an era of catastrophic confrontations. But once the true facts are out there, an aggressive Conservative government may find voters\' sympathy rapidly swings behind their public servants.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]onservative-public-sector-cuts
