The medical students are trying it on again

As Polly Toynbee says:

There is dispute over which measure of inflation should be used in the calculations, RPI or CPI, but either way the entire public sector has had its pay ruinously diminished since 2008. Paul Nowak of the TUC says that real wages would be £217 a week more had they kept rising at pre-2008 rates.

Or, perhaps, as Polly misunderstands - which is, of course, so unlike Polly. Public sector pay hasn’t fallen, has not been diminished. As Mr. Nowak says it simply hasn’t risen like it did in the grand days of Gordon Brown stuffing the mouths of the public sector with gold.

But that RPI and CPI difference. Here is the BMA’s calculation that RPI has risen 96% since 2008. Here is the Bank of England’s inflation calculator based upon CPI. Which gives us 64% inflation over that period. The medical students are demanding 26% to complete the restoration to previous levels. At which point it’s obvious that their demand is entirely driven by their decision to use RPI, not the CPI which afflicts the rest of us.

So, you know, no. A bit of statistical handwaving isn’t a good enough reason to siphon hundreds of millions out of everyone else’s pockets into those of the medical students.

But this isn’t the only thing they’re striking about. They also want more training places. As one of us has pointed out elsewhere on this:

That is, the NHS doesn’t even bother to train all the potential doctors it has because it has enough doctors without training all of those medical students.

In those economic terms, we can put it that we have an oversupply of would-be doctors — that oversupply now demanding they should all get paid more to boot. This isn’t how the world works. An oversupply is met by a cut in the price to be paid, not an increase.

It’s that last point which gives us the correct policy here. We have too many medical students chasing too few training opportunities. Therefore cut what we pay medical students to thin out that crowd a bit. This isn’t being brutal at all. They are all at least AAA students, so other parts of the economy will be falling over themselves to employ people so bright and public spirited, empathic and service oriented. Right?

Britain has too many medical students, more than we can be bothered to finish training. The correct answer is to cut the pay of medical students so as to reduce the number applying. Don’t forget, you might be perfectly happy ignoring basic economics but that doesn’t mean that basic economics is going to ignore you.

Which is what gives us the correct response to these medical students - cut their pay. This is how labour markets do work. If we’ve too many of the right calibre applying then cut the wages on offer until we have the right number applying. This is not difficult logic.

But then medical students, eh? By very definition they’re students because they need to learn things. So, we need to teach them a lesson, right?

Tim Worstall