Public-private wage divide gets 50% wider

Andy_L

One would expect those workin in health services to have higher sick rates as a result of being surrounded by sources of infection/disease all day. Likewise you might expect those at risk of being assaulted as part of the job, ie Police & Prison staff, to have higher rates. Lo & behold they do.

As with the average pay stats a simple average vs average doesn't tell the whole story

Sir_Humphrey

The pay rate for the most senior civil servant below permanent secretary (i.e senior directors) in my department ranges from just under 100k to just over 200k. There are a total of five at that level out of many thousands.

Private sector pay would go to nearly a million for equivalent posts. How many FTSE100 companies would have senior directors at that pay rate? How many private companies put that information on the staff intranet?

EDIT: For further comparison, the equivalent military ranks (using NATO/MOD comparator) would be Vice-Admiral, Lieutenant General or Air Marshall.

Old_Slaphead

Andy_L wrote: »

As with the average pay stats a simple average vs average doesn't tell the whole story

Public sector pay negotiators was quite happy to use statistics when they showed lower pay rates to justify their final salary pension provision.

Now they show something quite different then of course the stats are called into question!

Jobs aren't strictly comparable in any sector.....there are loads of instances where public sector get a better deal on remuneration/benefits and vice versa. The best that can be done is averages.

Now it's time pensions too were brought into line.

andyroberts1967

This is my first post in this thread, so please be gentle with me.

I work for a Government department as a HEO, have done for the last seven years, before that I'd had about 10 years in the private sector, so I've been able to see both sides of the fence.

Regarding Old Slaphead's post about civil service pensions, my understanding is that anyone who joined the Civil service after July 2007 won't get a final salary pension anyway. Anyone who signed up before that date and stays until they retire will have joined on those terms and conditions(final salary pension), and haven't these pension rights been enshrined in law by Alan Johnson over 3 years ago?

I think it would be grossly unfair to suddenly abolish FS pensions for existing staff, although I've always been happy to pay a little more towards the pension, and I'm also very happy to work until I'm 65 as long as I'm in good health. But as I said, it would be wrong to take our FS pension away, as that's the only reason a lot of us don't leave.

carolt

Can you actually give a single example, Slaphead, of where the same job being done in the private sector attracts a higher wage than the identical job in the state sector?

As I said, private school teachers usually get higher pay (and have an easier job, too, as smaller class sizes).

I'd be interested to see direct comparisons made.

As Sir Humph correctly points out, top civil servant posts - of which there are few - are very poorly paid compared to the equivalent level of responsibility in private companies.

Maybe there are examples I can't think of - it would be nice to see some facts backing up your generalisations though.

Old_Slaphead

carolt wrote: »

Can you actually give a single example, Slaphead, of where the same job being done in the private sector attracts a higher wage than the identical job in the state sector?

As I said, private school teachers usually get higher pay (and have an easier job, too, as smaller class sizes).

I assume you've got the private & public bit the wrong way round.

I'll tackle it slightly differently. Firstly, I don't believe any jobs are directly comparable. I have a friend who does a similar job to me in LG. She is paid 10% less but gets more benefits (longer hols, shorter hours, flexi. pension etc) which I don't. Overall her total remuneration is better than mine. (I don't have an issue with this - it is not a cause of grumpiness It is not a gripe....just an example).

Many people in my organisation are on minimum wage - correct me if I'm wrong but I don't think anyone in public sector is (I apologise if my understanding is correct).

Re. private teachers - it's not really the private sector. Many private schools are charities which, for some bizarre reason, attract preferential tax treatment. Presumably because parents are paying they will need to attract the best teachers & hence pay best salaries. Also, as I understand it, private schools raison d'etre is to offer a better and more 'rounded' education and their teachers are expected, as a matter of course, to participate in much more extra curricular activity. I'm not an expert on the T&Cs of teachers so again, I apologise if I've made any fundamental errors in understanding.

carolt

Yes, thanks for pointing out my error.

Interesting point re minimum wage - I don't know, is my answer to that. You're probably right - probably more minimum wage jobs in the private sector, but also - related, obviously - more entirely unskilled jobs and more tips/bonuses paid to those who do those jobs.

So I don't feel bad about waiters/bar staff on minimum wage, as, with tips their wage is probably as good as many skilled/qualified jobs.

Cannon_Fodder

carolt wrote: »

So I don't feel bad about waiters/bar staff on minimum wage, as, with tips their wage is probably as good as many skilled/qualified jobs.

can...worms...opened...

Until recently it was permissible to count tips towards minimum wage...

In 2007 it was ok, http://www.caterersearch.com/Articles/2007/09/07/315949/tips-can-count-towards-minimum-wage-finds-tribunal.html

Then 2008, it changed...
http://www.personneltoday.com/articles/2008/06/16/46336/tips-dont-count-towards-minimum-wage-court-rules.html

Wonder if half the employers know/have changed policy. Do the, often, EU workers know their rights?

Sir_Humphrey

andyroberts1967 wrote: »

Regarding Old Slaphead's post about civil service pensions, my understanding is that anyone who joined the Civil service after July 2007 won't get a final salary pension anyway. Anyone who signed up before that date and stays until they retire will have joined on those terms and conditions(final salary pension), and haven't these pension rights been enshrined in law by Alan Johnson over 3 years ago?

I think it would be grossly unfair to suddenly abolish FS pensions for existing staff, although I've always been happy to pay a little more towards the pension, and I'm also very happy to work until I'm 65 as long as I'm in good health. But as I said, it would be wrong to take our FS pension away, as that's the only reason a lot of us don't leave.

Re paragraph 1, it is correct that new civil servants are on a career average pension. The outcome of this is an deincentivisation to gain promotion (i,e it will encourage timeserving). Career average pensions also apply to new NHS Doctors too.

I do not know about the existing benefits being enshrined in law. It is certainly enshrined in my employment contract. My existing pension entitlement (such as it is) has never been under threat.

Re paragraph 2, an extension in working age to 65 is the most likely eventuality IMO.

It would not be worthwhile for the government to pick a fight over existing people on final salary. The proportion of civil servants on final salary pensions will decline as staff turns over (i.e swaps around with the private sector) and would therefore save so little money that making a big fight would be politically inadvisable.

Putting civil servants on a money purchase scheme would lead to significant up-front pay increases (market forces) and would remove a powerful disincentive against corruption that has existed since at least the Northcote-Trevelyan reforms in the mid 19th Century. A government would have to be stark staring bonkers to do that.

Andy_L

Old_Slaphead wrote: »

Many people in my organisation are on minimum wage - correct me if I'm wrong but I don't think anyone in public sector is (I apologise if my understanding is correct).

The last few times the min wage has been increased the MoD has had to increase the bottom of it's pay scale by more than they would have done to take people above min wage.

However it's at that level that I would agree that public sector workers are over renumerated as min wage doesn't include the value of pension contributions, although it's people at that level who tend to be the loosers in a final salary scheme

Mainly however those min wage jobs have been contracted out so whilst still being paid for by the tax payer they count as a private sector worker, skewing the average.