Who's really overpaid?

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It’s unclear whether the Chancellor actually used the word ‘overpaid’ in relation to the salaries of public sector employees, but there’s a lot less doubt that he and many of his Tory colleagues really do believe it to be true.  (At least, they believe it to be true of some public sector workers – as I understand it, Ministers and MPs are also public sector workers, and I’ve never heard any Tory suggesting that they are overpaid.)  I’m more interested, though, in how they have reached this conclusion.

It seems to be based on a very simplistic comparison of public and private sector average earnings, as though the mere fact of a difference between the two means that one group are ‘overpaid’.  I’m not convinced that it is based on any sort of like-for-like comparison, and it’s worth bearing in mind that decades of Labour-Tory government have seen many low-paid public sector jobs outsourced to the private sector.  In simple mathematical terms, moving low-paid employees from the public sector to the private sector increases the average salary in the former and decreases it in the latter.  That tells us nothing about the relative value of either.

Even supposing that the comparison is properly conducted and compares work of ‘equal value’ (a phrase which itself could be the subject of extensive debate), the mere appearance of a difference in averages is as likely to mean that one group are underpaid as that the other are overpaid.  It all comes down to one’s perspective.  And that question of perspective is key – from the Tory perspective (with the obvious exception of work done by really important public sector workers like Ministers and MPs, i.e. themselves) the value of work in the public sector is inherently lower than the value of work in the private sector.  That’s not about assessing value added, or contribution made to society or the economy, it’s about a simplistic axiomatic belief that work done in the public sector is a bad thing per se.

More generally, some of the other comments made expose a belief that salaries should be determined with no regard to the cost of living or the needs of employees but solely on the basis of any recruitment difficulties.  From that viewpoint, if there are no difficulties recruiting enough people to do the job, then there is no need for any salary increase, regardless of whether the living standards of those recruited, as well as those already doing the job, are falling year on year.  (Again, this rule doesn’t apply to themselves, whose salaries obviously need to be increased regularly – despite the oversupply of willing candidates.)  The best bit of all is that they get to call this ‘an economy which works for all’ without being challenged.