Myths rally to attack national bargaining

Attacks on national bargaining are not new. Neither are myth-peddling and selective statistics to whip up hysteria against public service workers. But to see both so transparently together in a self-contradicting liberal think tank paper would be entertaining if it were not so dangerously dressed up as academic analysis.

The Telegraph jumps on the bandwagon with a piece by Julian Astle of the CentreForum think tank extolling the work of Professor Alison Wolf who manages to conclude that “Britain needs to rid itself of rigid centralised wage bargaining. These systems are economically harmful, undermine quality in the public services, and perpetuate disadvantage.”

Astle gives an example of Tower Hamlets having to compete with £7million in bonuses in the financial sector and the lure of ‘leafy’ lower cost regions making it hard to attract good teachers. He seems to suggest national bargaining is getting in the way of the council paying more to reflect the ‘market’.

Wolf takes it further: “There is clear evidence that, within a local area, better-off neighbourhoods get better teachers; which is as you would expect, given that pay is the same”. Apparently national bargaining gets in the way of paying teachers more to work in deprived areas.

Very seductive. Do away with national bargaining and public service workers could get paid more. But wait a minute, here comes her first contradiction.

On the one hand she blames national bargaining for getting in the way of paying more for working in deprived areas – while only three paragraphs down she advocates cutting public service wages in poorer areas to address ‘regional inequalities’.

As she explains: “England’s poorer regions often have poor transport communications and a legacy of defunct industry, but they should have one major competitive advantage – lower wages. The inflated pay imposed on poor regions via national wage bargaining is, in effect, a direct assault on that asset.”

So there we have it. We need to get rid of national bargaining to pay higher wages to attract public service workers to work in deprived areas while at the same time paying them less so they can compete. Sound a bit contradictory? Well wait for this one.

“Public service professionals can enjoy a fine lifestyle in low wage regions with low house prices; and their local hospitals can hire good, permanent staff rather than agency workers. But the result is that, in order to attract comparable quality staff, private sector employers must pay national public sector wages”, she asserts, as if this is a bad thing.

Driving down public sector pay so that the private sector can get workers on the cheap will apparently do away with poverty and disadvantage.

This dubious muddled thinking that tries to justify the market as a driver for equality is based on even more dubious ‘evidence’.

The first is that the public sector pays better than the private, especially in deprived areas.

If you compare across the board between public and private you can make it look like the public sector is better. But the nature of health, social and other public services is that you need qualified staff. Compare public and private with the same qualifications and you find a different story. http://www.hrreview.co.uk/articles/hrreview-articles/benefitspayreward/public-vs-private-sector-pay-comparisons-inappropriate-says-report/6894

The average in private sector wages is also skewed downwards. The inequality of large numbers of very low paid staff (often outsourced from the public sector) is set against large numbers of very highly paid staff with not a lot in the middle.

And the comparisons don’t take everything into account. A lot of the reduction in private sector wages at the start of the recession was due to cuts in overtime working, not reductions in basic pay.
http://opinion.publicfinance.co.uk/2010/01/public-vs-private-pay-no-comparison/

Neither do they take into account fringe benefits in the middle earning groups. In a vox pop on TV recently about bankers’ bonuses, one interviewee criticised the size of bonuses but not the principle. “Everybody in every job gets bonuses’, he said.

Well, no they don’t in the public sector. Just as they don’t get a car, they don’t get cheaper mortgages and they don’t get lots of other enhancements that drop out of the basic pay comparison. http://news.bbc.co.uk/1/hi/magazine/8549380.stm

It shows just how far these peddled myths go in creating a belief in a ‘feather-bedded’ public sector.

The second dubious evidence is the somewhat feeble grasp on what Single Status and Agenda for Change actually are and what they deliver. Even setting aside an apparent lack of understanding of the equal pay legislative requirements, Wolf makes some odd assumptions.

One is that single status means that all local government staff are paid on the same scale across the country. Sadly that is not the case. Councils have used different schemes and set different benchmarks, leading to different wage levels.

The national bargaining element relates mainly to national increases (or not as the case may be) in pay – not generally the actual level of pay itself.

This has lead to major local discrepancies that she seems to have missed. Where this ‘local’ setting of wage levels happens, it does not actually reflect the ‘market’ or social need (whichever she is arguing for), it more reflects the financial constraints the individual council is under or the political dogma of its administration.

If her argument on local bargaining and the market held any water at all, social workers in Scotland’s affluent capital would get paid more than the rest of Scotland. They don’t. They get paid less. Home carers would have got a higher grading than in Lanarkshire. They didn’t.

If her contrary argument that local bargaining could pay more to attract staff to deprived areas held any water then you wouldn’t see Sefton care workers facing a 25% wage cut or other inner city councils proposing across the board pay cuts to balance the books.

The third bit of dubious evidence is that the private sector is the sole stimulus for growth and prosperity.

No reflection here about over-inflated city jobs destroying other parts of the economy while low paid public service workers give more value to the country than they take out. http://www.guardian.co.uk/business/2009/dec/14/new-economics-foundation-social-value

No understanding here of the public service infrastructure that is needed to boost the local economy and attract employment. Just the same tired old argument that we will somehow be brought out of recession by privateers on white chargers building a low wage economy.

Are the country’s workers really falling for the con that the best way to better themselves is to cut someone else’s pay and conditions rather than stand up for their own?

What is the problem with the concept of public services being model employers? What is the problem with the private sector having to aspire to, and compete on, the basis of decent pay, health and safety and equality rather than bonuses at the top, cuts at the bottom and the feeding frenzy of corporate shareholders?

This debate needs to be seen for what it is. Not an economic argument. Not a social argument. Pure and simply a political attack on trade union organisation.

Local bargaining is not being promoted to allow local flexibility – it is a drive to undermine the strength of unions so that lower wages can be forced through at all levels.

National collective bargaining is the only effective way to build equality and fairness. It is the only way that workers can collectively stand against the excesses of huge collective self-serving cartels that are big business, the CBI, the Institute of Directors or indeed the political parties that rely on elements of them for funding.

Big business knows that. The political right knows that. Wisconsin’s Governor knows that. That’s why they’re pulling every trick out of the bag to undermine it.

John Stevenson

See also
http://unisonactive.blogspot.com/2010/10/local-government-njc-agreement-under.html
http://unisonactive.blogspot.com/2011/02/bosses-lobby-moving-in-for-kill.html
http://unisonactive.blogspot.com/2011/02/eu-on-collision-course-with-social.html
http://unisonactive.blogspot.com/2010/10/gove-axes-school-support-staff.html