Congratulations to Ben Goldacre
It's so nice to see Dr Ben Goldacre—champion of science and scourge of dodgy-report pedlars—join some socio-economic dots, as he has on Twitter today.
Well, actually, he's part-way there: his first Tweet approvingly quotes the TUC-backed Touchstone blog as an authority on public sector pay—presumably because he thinks that what they have to say is not in any way biased...
the self-pitying fantasy emerging among middle class ppl that their friends in public sector get a better deal is wrong bit.ly/vfkCgg
The blog post in question, of course, only concentrates on actual wages rather than all the benefits—such as gold-plated pensions. It seems rather hypocritical for the self-appointed scourge of selective statistic-quoting scientific studies to so uncritically cite such a source as "evidence" although, to be fair, Goldacre does mention another benefit of working in the public sector... [Emphasis mine.]
there are some terrible problems in the public sector - like, for some insane reason we don't sack shit people - but salary is not one.
Of course, for those working in the public sector, the fact that "we don't sack shit people" is a benefit: it's only a one of those "terrible problems in the public sector" if you actually have to use the so-called services. As the Daily Mash so succinctly puts it...
Businesses also fear that if public sector workers’ demands aren’t met, they may look for jobs in the private sector, costing billions in incompetence-related mistakes.
But that's not really what this little article is about. No, I come to praise Benny-boy, not to bury him. Because, you see, Dr Ben then makes a connection—all on his ownsome, without any help. Which I think is just lovely.
also, public sector pay is "geographically inelastic". private sector wages in London are a third higher. public sector, marginal weighting.
Yes, Ben—and...? Oh look—he's got it!
this has interesting consequences. personal experience only, but i think the public sector attracts better quality ppl outside of london.
Oh, well done! Well done, Ben. Have a gold star, and I shall tell your mummy how clever you've been today...
You see, what Benny has done is to independently reach the same conclusion as this Centre for Economic Performance Report [PDF]—which was published in January 2008.
I highlighted it—whilst filleting Kerron "voice of the delectable Left" Cross—after Timmy wrote about it at the Adam Smith Institute blog under the title of Centralisation kills!*.
What the authors did was look at the quality and productivity of nursing across the country, this being measured by the percentage of those admitted to hospital after a heart attack (AMI) who died in the subsequent 30 days. As we're all told so often of the connection between (relative) poverty and bad health we would expect the rates to be higher in poor areas. Quite the contrary: the richer the area surrounding the hospital the worse the survival rate. The reason for this is that nurses' wages are set centrally, to be the same (with very little geographic variation) right across the country. However, wages in general are not the same across the country:Pay for nurses and physicians in NHS hospitals, which provide almost all hospital care in the UK, is set by a central review body that sets pay scales in which there is limited regional variation. The variation that exists does not fully reflect the wages differentials in the external labor markets in which the staff are employed. Regional pay differences are considerable in the UK. For example, female white-collar wages in North East England are about 60 percent lower than in Inner London and these persist after controlling for human capital characteristics and other factors.
It isn't that wages are too high in low wage areas, but that they are too low for nurses in high wage areas. This leads to both a shortage of people willing to do the job itself and hospitals relying upon agency staff who are not constrained by the national pay scale: but agency staff are, by the very nature of their shift by shift employment, unlikely to know the systems and hospitals as well as permanent. The end effect is:A 10 percent increase in the outside wage isassociated with a 4 percent to 8 percent increase in AMI death rates.
That is, where hospitals cannot pay the going rate for trained staff because of the national pay setting, people die. All in the name of equality no doubt, for a job's worth the same amount of pay where ever it is to some people. The only solution to this is to abolish such national pay rates and allow local employers to pay what they need to attract the staff they desire.
So, well done Ben Goldacre, for understanding some basic economics and applying it—even if he is some years behind. Perhaps the good doctor will now campaign against the national pay deal because the downsides are pretty unpleasant for those poor bastards who have to use his beloved public sector services...
All of which rather puts into perspective the current wrangles over national bargaining for police pay, other public sector workers, even the negotiations with civil servants and doctors. We shouldn't be having such national problems because we shouldn't be having such national negotiations in the first place. For centralisation of pay bargaining kills people.
Yes, the national pay deal—negotiated and backed by the Unions who are about to go on strike—actually kills people unnecessarily.
We have had a report showing this for nearly four years now: instead of allowing the union bosses to call the shots with strikes, perhaps we should actually prosecute them for corporate manslaughter. Or murder. I'm not fussed.
Perhaps I should write to Ben and ask if he would support such a campaign?
It should be easy if phrased right, e.g.
Dear Ben, will you back my campaign to imprison union leaders responsible for the national pay deal, or are you actually in favour of the NHS needlessly killing its
Now, if we could just teach Ben about the problems with the National Minimum Wage then we might actually make some progress. Unfortunately, Ben has not replied to my Tweet pointing this out...
* And both the ASI link and the report had changed since I wrote that post, so I spent an inordinate amount of time tracking it down this morning. I have corrected the links there and, of course, here.