Public and private sector pay

Feb 26 2010

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:

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.