Friday, October 9, 2009

Mark-to-Labour-Market

Dilbert

Another day another report on how public sector workers are paid much more than their private sector counterparts. Up to 26% more in 2006, according to the ESRI. A pattern confirmed in a similar analysis by the CSO using 2007 data.

Of course public sector unions and their supporters have been vociferous in pointing out 'flaws' in such comparisons: the need to make like-for-like comparisons adjusting for size of organisations, educational attainment of employees etc etc. Unfortunately for them the ESRI and CSO have done just that: the differences they calculate still boil down to one thing - people working in the public sector are paid an awful lot more than people in the same circumstances in the private sector.

Fintan O'Toole makes an obvious point: it was the public sector unions who started the whole private/public sector pay comparisons thing with the ridiculous benchmarking racket (okay, Fintan doesn't call it a 'racket' - but if it walks like a duck ...) But he then spoils his analysis with this point:
Gender is one of the issues that nobody seems to want to talk about. The most striking area in which there is a “public sector premium” is in pay rates for women. According to the CSO figures, the premium is 15 per cent for men but 23 per cent for women. The reason for this is obvious enough – it is harder to discriminate against women in the public service than in private firms. Partly as a result, the really glaring gap is between women in the two sectors of employment, with those in public jobs earning almost €10 an hour more than their sisters in private companies.
So let's talk about it. Firstly, where is the 'obvious' proof that private firms discriminate against women? The very same ESRI recently conducted an exhaustive analysis of gender wage differences and concluded that those 'unexplained' differences that do exist (a gap in average male/female wages of 7.8%) could not be attributed to discrimination as there was no evidence for same and might be due to a host of other things (such as women having life priorties other than paid employment).

But you see the problem? It would be a brave politician (or journalist for that matter) who would suggest that women in the public sector are even more overpaid than men vis-a-vis the private sector. Much safer to make evidence-free, egregious accusations about those well known pariahs - private sector employers - than 'talk about the gender issue'.

Now in an ideal world we'd all pay ourselves public sector salaries and enjoy the same terms and conditions (and pension entitlements). But back here on planet Earth it isn't going to happen. If mark-to-market makes sense to some critics of NAMA (and I have some sympathy), then mark-to-labour-market makes much the same sense if we are to avoid encumbering our children and grandchildren with a triple-digit national debt to GDP burden.

But I'm guessing most folks won't want to talk about it.

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