The forecast, unveiled at a conference in London yesterday, is based on the assumption that public sector pay will start to rise at around the same level as private sector pay. Carl Emmerson, deputy director of the IFS, said pay restraint had brought the wage gap back to where it was before the recession. ‘On average, public sector workers get paid more per hour than private sector workers,’ he said. ‘That’s not surprising – they have on average higher levels of education.
‘So, for example, you would expect a surgeon to get paid more than the average private sector worker.‘Public sector pay restraint since 2010 has brought this ratio back to pre-crisis levels – it’s unwound the unintended increase in public sector pay relative to private sector pay that occurred during the Great Recession.’ At one point, in 2011/12, public sector wages were 18 per cent more than the private sector’s.
Public sector wages rose more than private under the one eye Scotchman, have fallen less since the recession.
‘On average, public sector workers get paid more per hour than private sector workers,’ he said. ‘That’s not surprising – they have on average higher levels of education.
Because your credentials should determine how much you are paid, not what you do or what people are willing to pay you to do for them.
Middle-class entitlement in a nutshell.
WTF, we should be comparing brain surgeons with brain surgeons and pen pushers with pen pushers, brain surgeons with the average private sector worker.
Also, what Rob says.
Does this take into account the public sector pensions? Even the worst defined-benefit schemes equate to a pot of cash (if it were a private pension) that is eye-watering.
As Tim says, what about pensions. Also what about the fact that they mostly do nothing of value, throw millions of sickies, and won’t even talk to you civilly.
Does this include the largely unfunded pension ? I estimated the Teacher’s one was in practice an extra £10k on salary.
Or look at it another way, Paul, if they didn’t have the pension pot, they’d have had the extra salary …
Interested, but be uncivil back and they will point to the poster behind them about not tolerating abuse. How about a campaign for the general public not tolerating incompetence from civil servants?
Paul has a point. I worked for a quasi-governmental organisation and could accrue a civil servant pension just as they were cracking down and increasing what you had to pay to get one. Even after the changes, I worked it out to be worth about 25% additional pay
What government pays is not controlled by business considerations. They can get all the employees they need for less money. They choose to pay more than they need to.
Why pay £10 and hour when you can pay £15 an hour? It’s not coming out of their wallets.
@ Rob
The reality is that public sector workers’ pay is higher than private sector pay *even after* that is *adjusted* for their higher qualifications. So Emmerson is doing a “bait and switch” in his comment.
My reservist pension is alarming – a day spent reserving is worth on the order of a fiver per annum. We do 100% employer contributions on the company pension and I’ve no way of getting close to that.
And that’s one of the new “see how hard done to by the evil Tories are government workers” pension scheme.
@Surreptitious. That is alarming given the raw of pay. A fiver for one day out of, say, 225 per year is £1,125 per year fixed DB. That would cost, at market rates, something like £29k for someone in their mid-40s payable at 65. Payable earlier and the costs go up dramatically (proportionally at least)
What’s the day rate for a reservist? Equivalent to £30k a year? That’s some accrual rate!
At my place of work we have tiered pension accrual for people who joined though different routes. From 1/50 for the old lags to 1/95 for those who came from a higher base pay area to 1/65 for new starters. Absolutely no-one understands that higher pension means massive deferred comp so top line comparison is what shows and needless to say those with lower “base pay” get allocated the pay rises as they are relatively underpaid. Drives me mad and am making a fuss now as with no transparency
“So, for example, you would expect a surgeon to get paid more than the average private sector worker.”
I, however, would not expect someone trained as a surgeon but works driving a forklift to get significantly higher pay than someone who left high school with a forklift operator’s license.
And that’s the more apt comparison.
I recall that when I left the public sector (university IT) I was under the impression that I was poorly paid. Then I did a calculation of my pension entitlement, and did a massive double take, realising that my new, ‘highly-paid’ job was simply transferring my pension contributions into take home pay. I hurriedly re-opened negotiations and swung a raise to allow me to break even.
… And I still lost out on sick leave, holiday and security.
But I have not looked back, having found that one can derive pay commensurate with skill, rather than with time served.
I don’t believe that claim. Are there figures which prove it? What is classed as “higher levels of education” – passing a micky-mouse training course/GCSE/A level/Degree?
Pcar,
From my experience they all have the higher education, whether they need it or not.
@ Pcar
Most of the “lower-skilled” work which doesn’t require a degree is “outsourced” to pseudo-private sector companies like Capita.
Andrew,
My day rate is about £150. Pension is 1/47 of gross earnings.
And on a more general point, reservist pay is somewhere in the large range of (annual equivalent) £13,500 for a trainee up to the region of £120k for Assistant Chief of the Defence Staff (Reserves and Cadets).
I’m at the top end of the OF-3 scale – around £55k. If I did 365 days. Which would bankrupt me …
@john77 the “higher qualifications” are probably technically correct, but there’s qualifications and qualifications. I suspect they don’t employ many people from STEM subjects.
It’s like education. If you are in STEM you aren’t that well off (when I started teaching I was the only person I knew qualified to teach the subject, literally). But if you are an arts graduate (even then) you were better off teaching.
“I don’t believe that claim.”
It is probably true, but arrived at by things like excluding cleaners as “not employed” (outsourced to another company), but anyone from Burger Flippers up in the private sector.
There is also some value in the redundancy packages, which are insane. Having had to make some people redundant a few years ago, I know how little the maximum *required* actually is – when I did it I worked out the maximum was somewhere around £15k ish, and that’s if you’d worked at the same place for 40 odd years at the maximum threshold (don’t remember exactly).