There has been a lot of huffing and puffing in the left of centre media, Polly Toynbee in the Guardian and many other outlets, about the relative pay in the private and public sectors. Public sector workers says Ms Toynbee are underpaid compared to the private sector. She then explains that they are actually paid more but that is because they are more highly qualified, so they are actually paid less than they deserve on a relative basis, or some such nonsense.
Oh, and we can ignore the gold plated pension schemes according to Ms Toynbee, that is not a matter of compensation but of prudential provision by the state and mean-hearted fecklessness on the part of the private sector.
All total tosh, of course. In the private sector, we know that you are worth what people are prepared to pay you. What they are prepared to pay you is limited by two factors: the value that you create and the resources available to the company. What you feel you are "worth" is frankly irrelevant. The economic value of qualifications are often overestimated by their holders (and I have three daughters studying at or graduated from the same university as Ms Toynbee, while I studied at the other, more highly ranked in world league tables, blue university).
When it comes to the value of workers in the public sector, the same logic applies. All that a public sector worker is worth is their proportionate share of the income available to the state. Collectively the public sector workforce is worth no more than tax receipts less non salary expenditure, plus or minus a bit depending on the state of the economy.
When government collects £500 bn in taxes and spends £700 bn, it is clear that collectively the public sector is paid more than it is "worth", and that over payment might be any figure you care to think of between £50 billion and £150 billion, depending on what you want to take into account, your view on the state of the economy, structural deficits, wasteful capital spending, acceptable deficits etc.
Two few years ago as the economy was tightening I discussed the state of the financial world with an academic friend at our most highly esteemed seat of learning on the edge of Fenland, and she told me that from her point of view there was no hint of any budget cuts. Now it seems the real world is becoming clear.
There has never been any other basis for value, and much as we admire our highly trained NHS medical staff, who by the way do have the highest median remuneration of any sector, higher than financial services, and are the most highly state paid medical staff in Europe, they have to justify their pay on the basis of what others are willing to pay. The same goes for the community outreach and diversity workers, MPs and their hangers on and quangocrats.