Saturday, November 26, 2011

Congratulations to Ben Goldacre

Look at Ben... No wonder he's smiling—he's won a gold star for cleverness!

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 victims patients...?

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.

14 comments:

Anonymous said...

Goldacre is an arse, as is evident from his studious avoidance of any assessment of the evidence for manmade climate change. I mean, he makes a living from chasing dodgy stats, but somehow avoids addressing the biggest (most expensive) issue of the day.

Edgar said...

So that people do not die unnecessarily, we should raise public sector pay in those areas where living costs are high? You're being very generous with my money, Devil.

john b said...

Of course, for those working in the public sector, the fact that "we don't sack shit people" is a benefit

To a point, Lord Copper. It's a benefit for the ones who are shit. It's a cost for the ones who aren't, since working with shit people is an immensely unrewarding and frustrating experience.

Mr Ecks said...

Goldacre is a smug arrogant twat from the Amazing Randi "I know best" school.

the a&e charge nurse said...

Congratulations, Devil - not a peep from you when the greedy bankers were rewarding themselves yet another mega-bonuses - but should some poor pensioner (who used to work in the public sector) wants enough money to leave the heating on for an extra hour or two, you start frothing at the mouth.

Chris Riddles 'Finger of blame" doodling is apposite?
http://www.guardian.co.uk/commentisfree/cartoon/2011/nov/27/davidcameron-november-30-public-sector-strike

You really do need to get some perspective my market fundamentalist friend.

ChrisM said...

http://cdn.bikechatforums.com/files/worlds-smallest-violin_190.jpg

the a&e charge nurse said...

http://cdn.bikechatforums.com/files/worlds-smallest-violin_190.jpg
I thought it was the libertarians who were whining?

You lot have put your faith in the market even though the market rewards many hard working people with a shitty pension - why is anyone surprised about this?

Devil's Kitchen said...

A&E,

"You lot have put your faith in the market even though the market rewards many hard working people with a shitty pension - why is anyone surprised about this?"

The market does not reward anyone with anything—other than information. And the information from the market tells us that:

1) public sector pension rewards are way, way above what public sector workers pay into them,

2) these rewards are therefore unaffordable, and

3) those of us who actually have to pay for them—you know, those of us actually creating wealth—are no longer prepared to be made significantly poorer so that you people can enjoy riches far beyond what you pay for—and far beyond what we can afford.

When will you public sector workers learn that we don't view you as angels—or even necessary?

Get it?

DK

the a&e charge nurse said...

"When will you public sector workers learn that we don't view you as angels—or even necessary".

Devil, you are too intelligent a fellow to split the value of workers into two monolithic camps (private good, public bad) - not least because the roles themselves are important even if we may disagree about the way in which they should be provided.

What I don't understand is the envy and stereotyping that goes on (with regard to recipients of a state pension).
IF some public pensions are marginally better then this is presumably because of collective bargaining rather than the powers-that-be tripping over themselves to award better conditions to the underlings - and when I last looked collective bargaining was a perfectly legal and democratic activity?

You say you are "no longer prepared to be made significantly poorer so that you people can enjoy riches far beyond what you pay for—and far beyond what we can afford".

Now you have to be careful here because ChrisM may start off on his 'world's smallest violin' schtick but I can promise you one thing - even if pensions are reduced (which they inevitably will) there will be little discernible difference to the quality of your life, or to those of your market-loving follow travelers.

Perhaps you will then need a new target and I think a good a pace as any to start is here?
http://www.thisismoney.co.uk/money/news/article-2058459/State-owned-RBS-dish-500million-bonuses-despite-diving-profits.html





In other words why not

ChrisM said...

A&E nurse, you started the stereotyping with your " some poor pensioner (who used to work in the public sector) wants enough money to leave the heating on for an extra hour or two,"

"What I don't understand is the envy and stereotyping that goes on (with regard to recipients of a state pension)."

I assume you mean a public sector pension. A state pension is not really very much at all, and is received by all.
It's quite simple really. The private sector are paying for those state pensions, and they are paying for better pensions than they get themselves. Furthermore they are not funded like most pensions by the performance of investments, but by the taxpayer.

"and when I last looked collective bargaining was a perfectly legal and democratic activity?"

A very silly point indeed. If we were only allowed to criticise illegal activities, that would mean we would not be able to criticise most of what the state does. That said, changing the pension conditions of the public sector is also a perfectly legal and democratic activity, so what's your problem; given that you find anything that is legal and democratic is acceptable.

I find it paradoxical that often those squawking loudest about the greed of the private sector are so obvious about pursuing their own self interest.

"there will be little discernible difference to the quality of your life, or to those of your market-loving follow travelers."

That is almost certainly not true.

the a&e charge nurse said...

"The private sector are paying for those state pensions, and they are paying for better pensions than they get themselves" - ahh, nothing excites the movers and shakers quite like 'them' and 'us' squabbling.

Oh look, moan one group of underlings, you've got 50p more than me.

If pensions in the private sector are inadequate the obvious question is why - I'll bet private pensions don't improve as a result of the current cutbacks in the state sector though, neither will quality of life.

If you think it will perhaps you let us know what tangible benefits you expect?

ChrisM said...

Its considerably more than 50p.

"nothing excites the movers and shakers quite like 'them' and 'us' squabbling."

Fine, then accept the pension reforms and we'll stop squabbling. That will show "the movers and shakers" eh!

"If pensions in the private sector are inadequate the obvious question is why - "

Gordon Brown's tax raid didn't help. Moreover, it is not just about private sector pensions being inadequate, it is that some public sector pensions are too generous - and unfunded.

Of course a person who doesn't think very much might think that greedy companies are trying to cut pension benefits to increase their profits, and that the answer is for companies to pay out better pensions, even at the expense of lower profits. A person who does think things through of course will realise that private sector pensions are paid for by the profits that the private sector makes.

"I'll bet private pensions don't improve as a result of the current cutbacks in the state sector though"

No, but tax bills will not be as high as they would be without the cutbacks, meaning that people have more of the money they earned left in their pocket to spend as they see fit, possibly on increasing their contributions to their own pension.

the a&e charge nurse said...

Chris M - surely you are not disputing this analysis? "The NHS pension scheme (unlike most private final salary schemes) is well funded by it's members (US!) and makes a considerable SURPLUS (£2.1bn/yr). Presently this is a well run scheme, rewarding a lifetime of hard work.
But it could be a nice little earner for Dave, Nick and George. If we'd all be kind enough to increase our contributions, for a smaller pension and die shortly after we retire 68, we can bail out a few more banks".

ChrisM said...

That's not really an analysis, so much as an assertion. You are evidently quoting from somewhere, what is the source?

Even if true, it is not enough information to be useful. Today's contributions pay for tomorrows pensions, and today's pensions are paid out from yesterdays contributions. There is simply no relevant link between current pensions pay out, and current contributions. (As an extreme example, if the number of members has doubled recently, then saying that contributions match payouts is meaningless).

Really the only relevant issue for a pension is does the pay out for person A, reflect the amount person A contributed. If Person A is getting vastly more in pension than they paid in, they are doing that at the expense of someone else.