Public / Private sector pay gap widens

Wookster

Surprisingly, the gap has widened, according to the ONS as published in the Guardian.

http://www.guardian.co.uk/money/2012/mar/27/public-private-pay-gap-widens

Was surprised by this finding:

The ONS said one reason for the pay gap was that workers in the public sector tended to be better qualified and have higher skill levels than those in the private sector.

This also goes to show that there is still an enormous way still to go in reforming the public sector.

chewmylegoff

it's not surprising, because in the private sector a pay freeze means that you get a 0% payrise, but in the public sector a pay freeze means that the staff on long term pay deals all get what they were originally promised, and even those on a pay freeze who are not at the top of their pay band still get salary increases by moving up "spine" points.

there have been numerous reports of companies cutting their pay by e.g. 10% across the board to prevent redundancies. whilst i think this has been going on to some extent e.g. local council staff i think have been given pay cuts, i don't get the impression that there have been widespread pay cuts in the public sector.

thus i think the fact that since 2007, public sector pay has increased faster than private sector pay is probably the expected result.

lots of people on here go on about how all low paid jobs have been moved from public to private so may be the cause of the ONS comment you have quoted.

thescouselander

chewmylegoff wrote: »

it's not surprising, because in the private sector a pay freeze means that you get a 0% payrise, but in the public sector a pay freeze means that the staff on long term pay deals all get what they were originally promised, and even those on a pay freeze who are not at the top of their pay band still get salary increases by moving up "spine" points.

there have been numerous reports of companies cutting their pay by e.g. 10% across the board to prevent redundancies. whilst i think this has been going on to some extent e.g. local council staff i think have been given pay cuts, i don't get the impression that there have been widespread pay cuts in the public sector.

thus i think the fact that since 2007, public sector pay has increased faster than private sector pay is probably the expected result.

lots of people on here go on about how all low paid jobs have been moved from public to private so may be the cause of the ONS comment you have quoted.

Not true. Much of the civil service does not have a contractual right to incremental increases so a pay freeze has actually meant just that. Other public sector organisations are the same.

PasturesNew

Also, they lay off the people doing the actual work, on the lower salaries ... while the pricey managers and paper movers keep their jobs, thus raising any average.

chewmylegoff

thescouselander wrote: »

Not true. Much of the civil service does not have a contractual right to incremental increases so a pay freeze has actually meant just that. Other public sector organisations are the same.

i previously worked in a civil service department for a few years, and certainly my dept didn't have spine points as you say. however, what they did have was multiple year pay deals. so some depts will have continued to get increases whilst other depts would have been frozen, depending on when any such pay deals expired.

it's also worth noting that the civil service forms only about 8% of the public sector (in terms of number of jobs). whereas, for instance, the NHS, which is about 16% does use spine points across the board as far as i understand. councils tend to use them as well i think.

thescouselander

chewmylegoff wrote: »

i previously worked in a civil service department for a few years, and certainly my dept didn't have spine points as you say. however, what they did have was multiple year pay deals. so some depts will have continued to get increases whilst other depts would have been frozen, depending on when any such pay deals expired.

it's also worth noting that the civil service forms only about 8% of the public sector (in terms of number of jobs). whereas, for instance, the NHS, which is about 16% does use spine points across the board as far as i understand. councils tend to use them as well i think.

Yes, those who had multi year pay deals had the pay freeze added after those deals expired. Consequently some areas of the public sector still have 1 or more years of pay freezes while others come out of the freeze this year.

As you point out the public sector is quite large and arrangements vary massively - to be honest generalisations like the ones made in this thread are pretty meaningless.

Andy_L

chewmylegoff wrote: »

it's not surprising, because in the private sector a pay freeze means that you get a 0% payrise, but in the public sector a pay freeze means that the staff on long term pay deals all get what they were originally promised,

I don't think any of them are still running

chewmylegoff wrote: »

even those on a pay freeze who are not at the top of their pay band still get salary increases by moving up "spine" points.

Depends which bit of the public sector they are in. Some have received spine point increases, some have not

michaels

Elsewhere it has been estimated that govt final salary pensions are worth about 35% of take home pay (ie this is what it would cost to invest in an equivalent pension) which has got to outweigh many times any contribution bonuses make to private sector pay.

It is a shame that a like with like comparison is not possible. The article notes that the range in the public sector is lower so the mean for the private sector is actually brought up by the few earning astronomical salaries, comparing median wages might show an even higher bias towards the public sector.

thescouselander

michaels wrote: »

Elsewhere it has been estimated that govt final salary pensions are worth about 35% of take home pay (ie this is what it would cost to invest in an equivalent pension) which has got to outweigh many times any contribution bonuses make to private sector pay.

It is a shame that a like with like comparison is not possible. The article notes that the range in the public sector is lower so the mean for the private sector is actually brought up by the few earning astronomical salaries, comparing median wages might show an even higher bias towards the public sector.

Yes bus most private sector employees get free cars and other perks like tickets to the footy and free parties etc - that wasn't taken into account either.

olly300

thescouselander wrote: »

Yes bus most private sector employees get free cars and other perks like tickets to the footy and free parties etc - that wasn't taken into account either.

No they do not. Most private sector individuals don't get these perks.

I wish people would stop perpetuating these myths.

The only people I know who get such free perks are mobile sales people, high level managers, or professionals such a lawyers. Private sector high level managers and highly paid professionals such as lawyers are excluded from this data set.

The mobile sales people have a choice of having a company car or doing 20-30K miles a year in their own car.

Also even then I know public sector high level managers who happen to get lots of paid for meals.

thescouselander

olly300 wrote: »

No they do not. Most private sector individuals don't get these perks.

I wish people would stop perpetuating these myths.

The only people I know who get such free perks are mobile sales people, high level managers, or professionals such a lawyers. Private sector high level managers and highly paid professionals such as lawyers are excluded from this data set.

The mobile sales people have a choice of having a company car or doing 20-30K miles a year in their own car.

Also even then I know public sector high level managers who happen to get lots of paid for meals.

Really? Well there have been a lot of myths perpetuated about public sector workers here too. Like the final salary pensions - they have pretty much been closed down, the majority of public sector workers are/will be on career average schemes. I just thought I'd bring some balance to the thread.