Tag Archives: Earnings

The scandal of the gender pay gap

The gender pay gap is one of the most misunderstood areas of British public policy statistics. The only question is the extent to which this is accidental or deliberate obfuscation by pressure groups. The UK Statistics Authority needs to step in to do its part in getting better data, better explaining the existing data it publishes and correcting those who misuse it. It is a shame that the respected IFS has added to the deluge of confusion with its latest report published today.

So far as the statistics are concerned, the pay gap is the average amount of money paid to men in work versus the average paid to women. So far as legislation is concerned, the pay gap is the difference between the pay of an equally qualified and experienced man and woman doing exactly the same job. Sadly the rhetoric swings happily between the two helping no one. Every time this blows up I simply wish for better data so that we can really understand the issue and put ourselves in a position where we can develop policies that will put an end to discrimination. Instead we get (mostly) ill-thought out hot air.  Continue reading The scandal of the gender pay gap

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Earnings: true not fair

The weakness of earnings growth has dominated the debate about the recession and recovery in the last few years. “Average earnings” are lower in inflation-adjusted terms than at their recent peak in 2008. This does not (by and large) reflect falling wages for individuals. The average wage has grown more slowly because millions of low paid jobs have been created. Those low-paying jobs have dragged down the average while earnings for those in work have continued to rise relatively strongly. Poor explanation and inadequate “health warnings” have made it easy for economists, the media and observers to get a misleading impression of what’s been happening. When the underlying truth about the statistics fully emerges, there will be a rewriting of history and a realisation that the recession did not plunge so many people into a “cost of living crisis”. The “average” will also be seen for what it is: a dangerous concept when there is rapid structural change in what is being measured.  Continue reading Earnings: true not fair

Survey response rates – look down!

Response rates to surveys are declining. Fast. New sources, such as big data or administrative data, or making survey response compulsory, are no longer an optional extra. They need to be discussed now as a way to boost the quality of and restore credibility to the nation’s key figures. The rise in employment and the fall in earnings defined the economy of the last Parliament. As survey response rates fall below 50%, there is a chance that those trends which never gelled to give a coherent picture are some way from reality.

Continue reading Survey response rates – look down!

Election fact checking

There was a very good event organised by The Alliance for Useful Evidence last week at Nesta. The details are here.

I asked a question – mainly as I felt that UKSA and IFS were being a bit too self righteous when they were doing little to help at the sharp end of data misinterpretation by press and politicians. Continue reading Election fact checking

Average earnings – the real real growth

Summary:

  • Contrary to public perceptions most workers (and hard working families) are not suffering a cost of living crisis as often claimed in political debate.
  • The source of this widespread misconception is the national statistics which are deficient in this key area
  • A failure to properly allow for the, so-called, composition effect in earnings gives a very misleading impression and puts a huge question mark over the election’s key economic statistic
  • ONS commentary fails the “true and fair” test – publications are hard to find and do not explain what the figures really show
  • The standard comparison does not use the best measure of earnings and uses the wrong measure of inflation
  • Many of the huge number of newly created jobs are low paid so aggregate earnings in the economy are growing slowly but most workers (about 85%) are seeing very healthy real terms growth in their wages as they stay in the same job from one year to the next.
  • As the numbers are hard to find and poorly explained, politicians and others deliberately take advantage of the confusion and skew public perceptions.
  • The statistics board (UKSA) has ignored the issue. It is time to do its job properly.

Note: The ONS issued a statement about the 4% earnings growth on 12 March following a blog from the TUC. 

Continue reading Average earnings – the real real growth