Some public sector workers may now be on a pay freeze, but aren’t they paid more than workers in the private sector anyway?
Well, the picture is a lot more complex than the government and much of the press often present it. The public sector is made up of jobs that tend to be higher skilled than the private sector. Therefore, accurate comparisons have to take account of such factors and put the pay rate for the same jobs against each other.
The last government report that carried out a like-for-like comparison showed that, on average, public service workers earn 3% less than the average private sector worker.
In fact, the total pay of public service workers has been running below that of private sector workers every year since 2014.
That trend reflects the government’s attack on the wages of public sector staff between 2011 and 2017, when the two-year pay freeze was followed by a four-year 1% pay cap.
The only area in which the average public sector worker has an advantage over a private sector worker is in pensions. Private sector employers have been so successful in destroying the right to final-salary pension schemes that they are a rarity in comparison to the public sector, where the strength of trade unions has defended them against attack.
As always, the government claims concern about the ‘fairness’ of any situation where public sector workers receive more, but their solution is always to level workers down to the lowest rate, not to level up to the highest rate.
And the press will often sell attacks on public sector worker pay as being fair on taxpayers, when the reality is that driving down the wages of public sector workers is a gift to private sector employers.
The lower the wages they have to pay to attract staff, the freer their hand to drive private sector wages down further.
At least a pay freeze will leave my wages steady.
While it is true that a pay freeze would leave the same amount of money going into public sector workers’ pay packets, rising prices mean that what you can buy for that same wage will fall.
Prices are expected to rise by 2.3% this year, so what cost £100 last year will cost £102.30 this year.
If your wages remain unchanged, they won’t keep pace, so you won’t be able to buy the same goods and services as you could before.
Public service workers have been seeing this process go on for a long time. Average prices across the economy have risen by more than a third ( 34%) over the last decade: what cost £100 in 2010, cost £134 by 2019. However, for any public sector worker at the top of their pay scale – who went through the pay freeze, then the pay cap, and then received the average public sector pay rise – wages have gone up by less than 10% in the same decade.
And what have been the consequences of that discrepancy?
The consequences have been huge.
The value of wages is down by almost a fifth, stripping £7,000 from members’ buying power since 2010. If the average public service worker had received pay rises that stayed in line with the rising cost of living, they would have had over £46,000 more in their bank account than they do today.
And as well as the 34% general rise in living costs over the past decade, there have been plenty of other big rises that have had an impact:
- house prices have gone up by 36%;
- bus and coach fares have risen by 54%;
- electricity bills have soared by a whopping 59%; and
- rail fares by 36%.
Figures in this article come from research carried out by UNISON. To find out more – and to access more data and information – click here.