Academic, youse are paid too much

Written By: Steve Pierson - Date published: 3:30 pm, August 7th, 2008 - 42 comments
Categories: articles, public services, wages, workers' rights - Tags:

Professor John Gibson from Waikato University says public servants should be paid less because they get paid more than their private sector equivalents and they enjoy their work.

First, I would be highly suspicious the methodology of any study that claims to compare like with like between the public and private sector. How many police are employed in the private sector? How many legislators, councillors, diplomats, prison staff, policy staff, judges? We know that in sectors with true comparability – health and education, the better pay is in the private sector. Private sector lawyers are also better paid than their public sector counterparts.

Overall, the average public sector wage is higher than the average private sector wage. For a number of good reasons: a) the public sector doesn’t employ in low-paid professions – retail staff, wait staff, cleaners, factory process workers, agricultural workers – the higher average skill level of public sector jobs results in higher average pay. b) government workers are more heavily unionised. Stronger unions = higher pay rises. c) There is a public interest in public sector wages being decent because low wages encourage corruption.

Gibson makes an argument that, frankly, disgusts me: public sector employees enjoy their work more than their private sector counterparts so they should be paid less. Why not just give them really uncomfortable chairs or random electric shocks to take their enjoyment levels down instead?

And notice that Gibson has identified a wage gap between public and private sector and his suggested response is the one that would drive wages lower overall. If wages are lower in the private sector, isn’t that the problem? How are we going to become a higher wage economy if we are constantly forcing wages down?

I have one final question. Professor John Gibson is a public employee. How much is he paid, and does he enjoy his work? If so, should he give some of the money back?

42 comments on “Academic, youse are paid too much ”

Comments are now closed

higherstandard 1

7 August 2008 at 3:48 pm

One wonders why anyone would bother to publish such cak.
roger nome 2

7 August 2008 at 3:53 pm

Hmm, so this guy, like John Key, would “love to see wages drop”. Presumably he, also like key thinks that profits aren’t high enough then. Not a very tenable position to hold when you consider that growth in business profits has been about 5 times higher than growth in “median income” over the last 20 years . Enough is never enough for these people. Wages can’t be low enough, and profits can’t be high enough.
Crank 3

7 August 2008 at 4:04 pm

“Academic, youse are paid too much’

At least the Standard recognises who its readership is.

A great example of moaning to the converted

[lprent: You are referring to a machine having some kind of opinion, because that is what “The Standard” is. This program doesn’t have opinions – so read Rules and talk to a person.]
Joanna 4

7 August 2008 at 4:16 pm

two points: first Steve I think propensity score matching was used to address the issue of different sorts of workers in the two sectors (i dont much about this though)
I totally agree withyour other points though!

Secondly:
The results with 95% confidence interval appear to show no real difference in the two sets of data.
This is not my field so I may have mis-interpreted the data but if my results looked like this I would NOT be confident in saying there is a difference between the two groups
randal 5

7 August 2008 at 4:25 pm

the problem isacademics are not paid enough and new zealand is a provincial backwater
Policy Parrot 6

7 August 2008 at 4:36 pm

For me, the call for lower public servant wages is simply a distraction. We have all known for years that there was a significant differential between public and private wages.

But the solution seems to be obvious, and a no brainer. Simply pay private sector employees what they should be paid, and then there would be no issue.

FULLSTOP.
Crank 7

7 August 2008 at 4:58 pm

What a fantastic idea I wonder why no one has thought of it before. Lets just magic up some money and pay everyone more.
randal 8

7 August 2008 at 5:04 pm

no the problem is the market “demands” that kiwis waste their money on endless fripperies and cheap gimcracks and gew gaws to impress the neighbours or any one else for that matter who falls for it. Kiwis do not save enough. they do not value their instutions highly enough and are mainly just all round suckers for anything with a cheap sparkle.
infused 9

7 August 2008 at 5:20 pm

Actually, my partner worked at the Ministry of Education. She had no qualifications for the job and got paid heaps. Free lunches, take breaks when you want etc.

The govt sector is very relaxed compared to the private sector. She worked in two jobs. The other a SOE which was even more of a joke.
jafapete 10

7 August 2008 at 5:41 pm

Of course you’ll still find areas of slackness in the public sector, infused, just as you will in the private sector. Do you often generalise from one anecdotal example? Do you win many arguments like that?

Infused apart, I have to agree with all the comments so far, which is a first. Wages are too low in NZ. In the public sector, many salaries are low compared to the international labour market, which is why we have perennial problems staffing hospitals, universities and the like. The problem in the private sector is partly to do with lack of investment, and the workers can’t be blamed for that.

PS: Couldn’t use the link to the Scoop article, so here it is: http://www.scoop.co.nz/stories/PO0808/S00055.htm
roger nome 11

7 August 2008 at 5:50 pm

Crank:

“Lets just magic up some money and pay everyone more.”

What are you talkin’ about? As long as real product wage doesn’t increase faster than productivity, then the real unit cost of labour doesn’t increase, so profitability and investment is ensured, and inflation is kept at reasonable levels.

Over the last 20 years wage increases have been at historically very low levels.

You need to go and do some reading. You can start over at my blog.

http://rogernome.blogspot.com/2008/07/kiwis-are-overworked-and-underpaid-says.html
Phil 12

7 August 2008 at 6:09 pm

“b) government workers are more heavily unionised. Stronger unions = higher pay rises.”

This is something that I have long suspected to be a “common myth” but never really got around to trying to prove either way… perhaps, one day, my own blog might be in order.

At the very least, you are committing the same ‘apples-with-apples’ error that you argue against in the previous paragraph, especially when you point out private sector lawyers/health/educators are better paid than their public sector colleagues… there is a logical inconsistency there.
dad4justice 13

7 August 2008 at 6:11 pm

“What are you talkin’ about?”

I hope your mother doesn’t get breast cancer roger as the cruel government won’t help, even though 30 other countries help their stricken women.

Labour are sick in the head.What a cess pit country!!!
roger nome 14

7 August 2008 at 6:41 pm

Phil:

High union density results in lower wage differentials. So collective barging definitely increases wages for low to medium skilled workers, though probably not very much for professionals.

i.e.

Union decline has been linked to increases in income disparity. For instance, in Britain the fall in union density is estimated to have accounted for 20 percent of the increase in wage dispersion between 1970 and 1993, (Freeman and Katz, 1995) while in Canada the slow change in inequality relative to the United States has been partly attributed to the continuing strength of the trade union movement (Leslie and Pu, 1996).

If you want to learn more about it you can see these sources:

Freeman, R. and Katz, L. (1995) Differences and Changes in Wage Structures, University of Chicago Press, Chicago.

Leslie, D. and Pu, Y. (1996) “What Caused Rising Earnings Inequality in Britain? Evidence from Time Series, 1970-1993′, British Journal of Industrial Relations, vol. 3, no. 25, pp.187-198.
pohutukawa kid 15

7 August 2008 at 6:49 pm

University professors get paid very well – over $120k pa.
Psycho Milt 16

7 August 2008 at 7:23 pm

University professors get paid very well – over $120k pa.

Correct but stupid. Indeed, Professors at my university start at $114,000 and have no upper limit. And no perqs. In what sense exactly would this outstrip what senior managers would expect from a large private sector organisation?
killinginthenameof 17

7 August 2008 at 7:47 pm

“dad4justice
August 7, 2008 at 6:11 pm
“What are you talkin’ about?’

I hope your mother doesn’t get breast cancer roger as the cruel government won’t help, even though 30 other countries help their stricken women.”

I’m not an expert on the area but my understanding is that for each drug an investigation is conducted to determine how cost effective a drug is in terms of quality of life adjusted years vs cost. With this, then you can work your way through the health budget until its all accounted for giving maximum benefit for the money available.

Unless Herceptin is the next ranked drug in terms of cost effectiveness I take massive exception to their campaign. How dare they demand the drug that they want when than money could save more people being spent on another, its shameful and deceitful, especially using a public sympathy campaign the way they have.
Draco TB 18

7 August 2008 at 8:01 pm

University professors get paid very well – over $120k pa.

It’s ok but I wouldn’t call it very well. For it to be classed as that it would have to be $500k+.

Unless Herceptin is the next ranked drug in terms of cost effectiveness I take massive exception to their campaign. How dare they demand the drug that they want when than money could save more people being spent on another, its shameful and deceitful, especially using a public sympathy campaign the way they have.

Yep, always pissed me off that herceptin campaign.
dad4justice 19

7 August 2008 at 8:19 pm

Oh well, you don’t have to be a well paid academic pushing government ideologies to see the sub standard treatment of female cancer patients. It will cost Labour plenty of votes come election time.
Paul 20

7 August 2008 at 8:44 pm

Perhaps Heinz could steal the drug.

that would hurt wouldn’t it dad, what to do???

http://www.vtaide.com/blessing/Kohlberg.htm

or

Dilemma 3

http://www.haverford.edu/psych/ddavis/p109g/kohlberg.dilemmas.html
rave 21

7 August 2008 at 8:58 pm

Another hackademic trotting out crap on the public teat.
He’s a drone if there ever was one. The proliferation of economics, management, accounting subjects at Uni speaks of the full penetration of the private sector into the halls of academe. Instead of business propaganda we need some more science to check out Herceptin. Wouldnt it be great if Labour could think outside its playbox and fund an public experiment. Everybody on Herceptin and lets see if the survival rate in NZ matches that everywhere else where it is prescribed. Labour needs some circuit breakers like helping people in need.
Steve Pierson 22

7 August 2008 at 9:14 pm

Paul. brilliant pics.
killinginthenameof 23

7 August 2008 at 11:14 pm

“I’m not an expert on the area but my understanding is that for each drug an investigation is conducted to determine how cost effective a drug is in terms of quality of life adjusted years vs cost. With this, then you can work your way through the health budget until its all accounted for giving maximum benefit for the money available. “

I stand corrected by the man on the news, Its not a cost effectiveness thing (well it is in some senses) its just a dispute over the science.
burt 24

8 August 2008 at 12:10 am

Steve Pierson

It’s surprising how much Professor John Gibson has been denigrated in this thread. It’s surprising how much denigration there has been of ‘Academics’ in general. What’s perhaps less surprising is how little evidence has been presented to support that denigration.

The whole post is a piss take of how little evidence you need to discredit a well funded study throughly conducted by a well educated person – surely?
burt 25

8 August 2008 at 12:27 am

Draco TB

In response to “University professors get paid very well – over $120k pa.” you said;

It’s ok but I wouldn’t call it very well. For it to be classed as that it would have to be $500k+.

Which makes me think of the piffling $60K rich tax threshold we have had for 9 years. Sure it’s lifting a few dollars a week soon but as you said $120K is only doing OK. Cullen should be realistic if he wants to stay in govt and shift his ‘rich bastard’ threshold to $120K min. Seems like $200K might be a better level, just clip the ticket harder on the people who can afford it.
Draco TB 26

8 August 2008 at 12:47 am

I’ve held the idea for quite some time that we need to go back to having 5 tax brackets rather than the 3+1 that we have now. I even agree that the top tax bracket would be about 200k (probably less) if we did move to the 5 tier tax but we still seem to be sticking to what we have so tax will just have to remain as it is because the 3+1 system doesn’t allow for the top bracket to be moved far beyond the other brackets. One of the problems with trying to have a flatter tax system.
burt 27

8 August 2008 at 1:08 am

I would say one of the problems of having an ideology that allows you to say $60K is a sensible threshold over a period 8-plus years. I don’t think Dr Cullen has ever tried to keep it flatter. Flatter is not the problem, quite the contrast. It’s the fact our rates get steep very quickly capturing what are definitely middle earners in the top threshold. Fiscal drag, a specialty of the Clark/Cullen combo.
max 28

8 August 2008 at 5:34 am

Crank
August 7, 2008 at 4:04 pm

“Academic, youse are paid too much’

At least the Standard recognises who its readership is.

A great example of moaning to the converted

[lprent: You are referring to a machine having some kind of opinion, because that is what “The Standard” is. This program doesn’t have opinions – so read Rules and talk to a person.]

Get a live lynn.

People are allowed an opinion and you dont have to play god on any opinion you disagree with.

reCAPTCHA: Fannie writes

he he
ACCSUX 29

8 August 2008 at 6:17 am

“Academic, youse are paid too much’

Oh yea

Yes another group Brainwashed opps educated idiots.

Yes these people think there special.

These scum get go to a uni. Holiday..
Ya cant fool us with ya shit.
yes remember we all went to school.
But those of us whom actually had to go to work…yes after real work School, it was a holiday.

Yes While the rest of the country get on with slaving for some corrupted educated greedy idiot.
Being paid well below the average wage.. and doing well above the average days work.. ,paying taxes.
so a group whom believe they are special .can go to uni. and then get a special wage.

These scum hav never done a days work, there and there already 20 to 25 and over..
and then demand a special wage. Oh thats right after they have a OE another of ther special rights, they believe they deserve..
They believe they deserve .. special wages .

No one deserves no more than the average wage.
but oh these scum actually have been brainwashed and now have convinced themselves thay are special..
will do anything to get more more more. corruption anything.

oh yea its time for a new tax system,,

ya get taxed back to the average wage… all ..
Ya can think ya special. ya boss can think ya special.
your wage can be millions to make you feel so special.

but taxed back to average wage.
yes a tax system where those whom are slaving for below the average wage,, get dollars to the average ,, and those special people above the average wage get taxed back to it..
Stephen 30

8 August 2008 at 8:28 am

Are those lyrics to a song you wrote ACC?
Scribe 31

8 August 2008 at 8:28 am

High union density results in lower wage differentials. So collective barging definitely increases wages for low to medium skilled workers, though probably not very much for professionals.

Thanks for being honest about how unions really work, Roger 😉
Phil 32

8 August 2008 at 8:40 am

Roger/Steve,

I can see the logic in the argument that unionisation works best for low-wage low-skill positions, but that doesn’t remove the
inconsistency in Steve’s post.

These are his two statements;
1) Public sector workers are more heavily unionised that private sector. Unionisation = higher wages
2) An employee in the private sector earns more than a similar/same role in the public sector.

They don’t fit together.
randal 33

8 August 2008 at 9:04 am

none of it fits..its all about causing confusion in the public mind and tagging on your own conclusion at the end. how many truckdrivers know what a professor of physics or even history does let alone have the education to comment. puf puf puff I can see the smokescreen growing or is that the ideologues from the nats reassuring the little people that yes there is nothing to it really and they could all be professors too…yeh right
Draco TB 34

8 August 2008 at 11:05 am

Burt:
Middle earners aren’t caught by the 60k threshold though as the average wage is only ~$40k. Just because a middle class lifestyle today requires an income of $100k+ doesn’t mean that those on that income are middle earners.
coge 35

8 August 2008 at 12:30 pm

The private sector pays for the public sector. No one can argue with that statement. I contend it would be more equiatable to have at least a level playing field wage wise. It goes beyond unionisation of the private sector, it involves having an economy set up so the private sector can thrive. A system where it is clearly respected & valued. An economy that people want to actively participate in the private sector.

Otherwise it’s like putting the cart before the horse.
Draco TB 36

8 August 2008 at 6:22 pm

An economy that people want to actively participate in the private sector.

Should probably find a way to get rid of capitalism then. A socio-economic system that only rewards the few doesn’t give a lot of incentive to the many to work in it.
coge 37

8 August 2008 at 6:39 pm

Draco, I’m talking about all people who WORK in the private sector.
Are you suggesting they are second class citizens? Do you not respect ALL workers?
randal 38

8 August 2008 at 7:14 pm

listen all turkeys…are you ready? ok? NOBODY gets money for doing nothing.
eddie 39

8 August 2008 at 7:15 pm

Many years ago when I was an upstart junior probation officer the deputy head of the department told we juniors that probation officers were not interested in salary because they got ‘job satisfaction.’
I got offside because I asked him whether he had ever tried to shop or pay a mortgage with job satisfaction.

This is the same principle as the academic saying public servants should get less pay because they like what they do!
RedLogix 40

8 August 2008 at 7:36 pm

coge,

The private sector pays for the public sector. No one can argue with that statement.

A few moments thought would inform you that the public and private sectors mutually support each other. Any person who has actually run a business knows just how much they actually depend on a raft of vital public services in order to function.
Draco TB 41

8 August 2008 at 7:44 pm

I’m talking about all people who WORK in the private sector.

So am I.

Are you suggesting they are second class citizens?

Nope.

Do you not respect ALL workers?

I have respect for all those that create value. I have no respect for those that produce no value but are rewarded far above those that do.