Feb 2010 26

Public and private sector pay6

The Office for National Statistics have issued a new report on patterns in pay.  There is a mistake on their graph of public and private sector pay – the label on the vertical axis should be £ per week not £ per hour – but it illustrates the growing divide quite neatly:

Onspaystats

Part of that is down to staff at the nationalised banks moving into the public sector, but the ONS confirm that the gap would have grown anyway:

"It is important to note that ASHE includes breakdowns by public and private sector according to the legal status of the employers. Between 2008 and 2009 Lloyds Banking Group, the Royal Bank of Scotland Group and HBOS PLC were reclassified from the private sector to the public sector. Interpretation of public / private sector movements is therefore more difficult between 2008 and 2009 than in previous years. If these banks were reclassified back into the private sector for 2009, the growth rates in the public and private sectors would be 2.7 per cent and 1.6 per cent respectively, resulting in a difference in growth rates between the sectors of 1.1 per cent rather than 2.1 per cent in 2009."

When these kind of statistics are released, critics come up with all sorts of dubious reasons not to take them seriously.  I rebutted Polly Toynbee's best effort on Comment is Free.  The best evidence we have suggests that public sector staff are better paid, work fewer hours and enjoy better benefits.  With the scale of the crisis in the public finances, that just isn't sustainable.

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  • Steve Robson

    …and the comparison continues to be absurd because people do different jobs in the public sector than private sector, generally more higher qualified jobs (teachers, social workers, nurses). Also everyone in the public sector is PAYE, so declares their full income whereas there is massive under-declaration in the private sector, particularly from the self employed. Anyone who has used a builder knows that. All the self employed declaring £15,000 and earning £40,000+ are pulling this private sector average down.
    You can deny it all you want and your spin may convince people, but you are still wrong.

  • Adam Wissen

    Who gets paid what then Matthew? Come on, stop hiding behind rhetoric, bias stats and vagaries.
    You’re not a politician, you don’t have to worry about losing votes in a couple months. So just tell us which public sector workers are paid too much, why and what you’d pay them.

  • Steve Robson

    and just out of interest, what is the difference in the mean average salaries between the two sectors?
    funny how you choose median – not because it gives the answer you want is it?

  • Government Boffin

    Would this article have been written if the differential had been the other way round?
    No, didn’t think so

  • A Helpful Pointer

    I think you mean “vertical” not “horizontal” axis..

  • Trevor Oakley

    Why was no reference made to the Institute for Fiscal Studies’ analysis of the main causes of the differences published in their Green Budget 2010 on 3 February (http://www.ifs.org.uk/budgets/gb2010/10chap9.pdf) or the FT articles on it (http://www.ft.com/cms/s/0/1920c19e-1147-11df-a6d6-00144feab49a.html and http://www.ft.com/cms/s/0/956a7f52-dec9-11de-adff-00144feab49a.html) the following day ?