New data: Maybe public servants aren't overpaid after all

PLUS: New reports back IDEA's policies on tackling youth unemployment and boosting government evaluation

Summary:

• A new report suggests that pay rates for public servants look very different once the nature of those jobs is taken into account

• Alarming youth unemployment statistics just underline the need for policies like IDEA’s Circuit-Breaker Job Guarantee

• An influential select committee report echoes IDEA’s concerns about the lack of government evaluation – and how to change it

Do public servants really earn one-quarter more than private counterparts?

New research suggests the widely held view about public sector workers being paid significantly more than their private-sector counterparts is “misleading”. Indeed, an apples-for-apples comparison shows they are actually paid less.

Research outfit Motu investigated the official statistic that average pay in New Zealand’s public sector is one-quarter (25%) higher than in the private sector. Such figures are often used by groups like the Taxpayers’ Union to lament the public sector’s supposed excesses.

But the Motu researchers, senior fellows Dave Maré and Dean Hyslop, found the 25% figure was not just widely quoted but also “widely misunderstood” and “misleading” – principally because public and private sector jobs are quite different.

Comparing apples with apples

The Motu researchers used labour force data to look for instances where the pay gap was due to “observable differences in jobs and workers”. They also used other strategies to interrogate the statistics, deploying job evaluation and remuneration data from firm Strategic Pay.