There has been a good deal of media coverage concerning the threat of public sector industrial action over pay. In this context, a new report by the Office for National Statistics provides an interesting contribution to the debate.
In July, the ONS published a report attempting to compare public and private sector pay (“Estimating Differences in Private and Public Sector Pay“). It uses data collected for the Annual Survey of Hours and Earnings (ASHE) and the Labour Force Survey. The ONS estimates that the difference by which public sector employees’ remuneration exceeded that of private sector employees increased between April 2007 and April 2010 by almost 50%. In April 2007, the estimate was that public sector employees earned 5.3% more than private sector employees. The equivalent figure for April 2010 was 7.8%. For consistency over time, the ONS estimates assumed that employees of those banks reclassified to the public sector in 2008 were in the private sector throughout.
In contrast to the headline figures noted above, it should be noted that those with higher qualifications earned more in the private sector than in the public sector. The ONS estimate is that in April 2010 those with a degree or equivalent qualification in the public sector earned around 5.7% less than those in the private sector. This is significant as the report indicates that the public sector workforce contains more people with a degree or an equivalent qualification (38% in 2010, compared with 23% in the private sector).
All well and good, but the possible shortcomings in such an exercise are obvious. In fairness, the ONS starts its report by expressly recognising the difficulty in making accurate comparisons between the two sectors because of differences in the types of job and characteristics of employees, and says that its conclusions are reached even allowing for such reservations.
Incomes Data Services (IDS) goes rather further. It too has just produced a report, entitled “Public and private sector earnings: fact and fiction“, which considers all this information but tells a somewhat different story. IDS’s view on the ONS – and press – conclusions is that “Although the use of official statistics can give this argument credibility in the eyes of the media, the differences between the public and private sector workforces mean that this sort of comparison is far from straightforward…” Some might consider IDS’s conclusions more compelling.
Perhaps the only safe conclusion to be drawn from the whole exercise is that it is, indeed, true that statistics can say pretty much whatever you want them to say. Either way, the choice is yours!
