Tuesday, 30 December 2008

Do the Scotsman's journalists pay income tax?

Do unions mislead?

Now here's an interesting story:
SALARIES in Scotland are lagging £3,000 behind the average British wage and are more than £18,000 less than pay packets in London, a survey reveals today.

The research found only workers in Aberdeen and Edinburgh earned more than the £31,323 average taken home by full-time workers across the UK.

No that's not what's "taken home", it's pre-tax. There is a difference.

At least the Scotsman picks up on this bit:

However the GMB's UK national average of £31,323 is far higher than the ONS average of £24,908 as it refers to the "mean" average – a basic division of all salaries by the number of full-time workers – rather than the "median" preferred by the ONS, which effectively ignores extremely low and high salaries.
But let's look at the GMB Union's figures a bit more closely, in particular that £46,462 "average" for London. That seemed extraordinarily high to me, even accepting that the Union doesn't use the normal "median" wage but instead quotes the very misleading "mean".

Here's what the GMB says:

These figures are from a new analysis by GMB, Britain’s general union, of the recently published Table 7.7a of the 2008 Annual Survey of Hours and Earnings by the Office of National Statistics. These are the most recent figures from the survey in April 2008. GMB’s analysis ranks the average gross annual pay for full time men and women workers from the highest to the lowest for each region and area of the UK and expresses the pay in each area as a percentage of the average annual pay of full time men and women in UK. The figures are for jobs in the area. What is shown is an average of the gross pay of the higher and lower paid jobs.
I couldn't work out where the GMB got its figure from but according to table 7.7a the mean gross salary for London is £40,354, not £46,462, and the median, that's to say the typical salary with as many people earning above and below this figure, is £29,260 PA.

So why would a union present London salaries in this misleading way? Could it be because they want to discredit capitalism? Surely not...

1 comment:

David Farrer said...

Comments made on previous template:

David Farrer
Thanks for that. 
Remembering what full-time gross salaries were like when I was a finance director in a high-paying industry in London not too long ago I'd guess that the mean is skewed upwards by some atypical folk at the top end. 
I still think that the median is a more useful indicator.

3 January 2009, 15:36:03 GMT
– Like – Reply

David, All official figures in the GMB analysis for all areas of GB are the mean average gross earnings for full time workers working in that area and all are expresses as a percentage of the mean average gross figure for UK.  
The earnings figure you quote for London is for full time and part time workers combined not the figure for full time workers which is correct. This is why it is lower. A simmilar combined figure for all other places would also be lower. 
GMB produce this analysis each year using the official data produced by ONS.We compare apples with apples. 
GMB press office

3 January 2009, 09:37:29 GMT
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james higham
The last sentence says it all. Have a Happy Hogmanay, David.

31 December 2008, 13:33:07 GMT