It’s Official – Public Sector Workers Make More Than Private Sector

The Office for National Statistics has given us the low down on public sector wages – they’re higher than those in the private sector. Of course, we all knew this, it only being those public sector workers themselves, plus their union reps, who ever try to argue otherwise. Quite why the tax eaters should gain more than the tax growers is never adequately explained but that is that stance, isn’t it.

It is true that we can quibble with this finding. For this is being done on that same basis as the gender pay gap. There are adjustments that should be made to the simple mean or median average of all pay in order to gain real insight into what is happening. The public sector unions always insisting that such adjustments must be made before we compare, some of the shriller voices on the gender gap insisting they should not. We thus ending up with the insistence that the raw pay gap between men and women shows prejudice, patriarchy, the raw pay gap between public and private sectors doesn’t show any sort of prejudice or privilege at all. Which is a pretty good intellectual trick if you can pull it off.

Still, those public sector wages are higher:

Public-sector workers bring home more on average than their private-sector counterparts and are likely to have better pensions, according to official figures.

Average weekly earnings for full-time public-sector staff were £599 in April last year, compared with £532 in the private sector.

A staggering 93 per cent of those employed by the Government are still in gold-plated defined benefit pension schemes, compared with just 13 per cent of those in the private sector.

But if we are to adjust these figures then how should we do so?

We might first think about a claim being made by those unions. Public sector pay has fallen in real terms in recent years. Entirely true, it has, but again we come to that why should the tax eaters do better than the tax growers?

Facts are terribly inconvenient: as those screaming about lifting the public sector pay cap are about to find out. The basic complaint is that pay for all those dedicated servants has fallen in recent years and it should be rising. In real terms it’s entirely true that their pay has fallen as inflation has been higher than nominal rises.

But then that’s true for all of us. We’ve just had a massive recession and thus we are indeed worse off. That’s what a recession is all about. So the question should be: are we all sharing that pain? We are not. Public sector pay has fallen by less than private. The people paying the tax have suffered more than those who eat the tax – hardly a good argument in favour of tax-eater pay rises.

Until someone tells us why they should suffer less pain that we do then they can go boil their heads, can’t they?

We could also argue that the people who work in the public sector are more qualified, have more education, greater skills. There is a truth to this. All the doctors are over in that sector for example and very few of the sandwich makers. When we do adjust for this we find that public and private sector pay less less out of whack than those raw figures tell us. Which is of course the point the public sector unions make to us.

Except that’s not the only adjustment we should make. Wages are only a part of compensation and these days they’re only just a majority of compensation in some jobs. So, we need to consider those other parts of compensation too:

Incorporating the value of employer contributions to workplace-based pensions increases the size of the public sector pay differential. As measured by pay only, the public sector differential was at 7.1 per cent in 1997 and at 2.3 per cent in 2007. Including workplace pensions, the differential rose from 17.9 per cent in 1997 to 20.2 per cent in 2007.

“Between 2007 and 2012, as cuts to public service pensions came in, the public sector differential including pensions fell to 16.8 per cent, compared to an increase in the differential to 4.6 per cent for pay only.

It’s entirely true that those raw figures, just wages, aren’t the correct way to look at the public/private sector pay gap. When we do the work properly we find that the public sector gets even more more than we at first thought.

So, let’s have equality and justice in the British economy, shall we? Let’s start by cutting public sector wages by 20% across the board. For what is the justification that we who pay the taxes earn less than those who eat our taxes?

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I wonder if anyone has further refined the differential based on PPP. I’m one of the lucky ones having been a public sector employee for 10 of the last 14 years in North East England where I’m sure the differential is higher, and it has allowed me to buy a house and live a pretty decent life. Cheers taxpayers.