On public sector pay, we need less talk of gold-plated pensions and more talk of unions
Today the ONS published a carefully caveated report into pay in the public and private sectors. It contains a wealth of interesting data for stats nerds, and no shortage of methodological talking points too.
Displaying a gross inability to even read the ONS report, the BBC reported that “public sector workers are paid on average 14.5% more”. This is true if you ignore the entire purpose of the ONS report, which is to find comparable data as “using simple averages to compare earnings between the two sectors is often misleading”. So brace yourself for much of the UK media inevitably ignoring those caveats and playing to the well-worn ‘public sector fat cats with gold-plated pensions’ mythology.
In fact the ONS concludes that “on average the pay of the public sector was between 2.2% and 3.1% higher after adjusting for the different jobs and personal characteristics of the workers”.
The main reason for the apparently large gap reported by the BBC is that public sector roles tend to be more highly skilled, with proportionally twice as many ‘low skill’ jobs in the private sector. Likewise ‘high skill’ jobs make up 41% of those in the public sector, compared with only 23% in the private sector.
The data is even more stark for women. In 2013 16% of women in the private sector were employed in high skill jobs, compared with 42% in the public sector. So women are nearly three times as likely to reach the upper echelons of the public sector as in the private sector.
Of course a significant factor not investigated by the ONS is unionisation. Over 50% of workers in the public sector are in a trade union, compared to around 14% in the private sector. Workers in unionised workplaces in the private sector are 4% better off than in non-unionised workplaces. In the public sector, with higher workplace density and more collective bargaining agreements, union members are 17% better off.
And the most important finding is really that in the public sector both high pay and low pay are constrained. Public sector workers are less likely to be enduring poverty pay on insecure zero hours contracts, while public sector bosses are not taking home the sort of seven or eight figure salaries snaffled by the real fat cats in Britain’s boardrooms.
The report PCS put together a year ago ‘Britain needs a pay rise’ found that in the civil service pay is 4.4% or £1,263 lower than median pay in direct private sector comparators. A large part of the reason for this has been successive years of real terms cuts in pay – the initial two year pay freeze, followed by the 1% pay cap was pre-dated by some pre-crisis years pay restraint in the civil service.
This has been a public sector wide policy, but workers in the private sector have fared badly in this timeframe as employers have imposed real terms pay cuts. The PCS ‘Britain needs a pay rise report’ found that workers are 7% worse off in real terms – that’s £50 billion less in people’s pay packets over the past four years.
The lowest paid workers have suffered too, as since the recession the national minimum wage (NMW) has lost 7% in real terms too (as this LEAP analysis shows). Even the mooted increase in the NMW, to £6.50 per hour from 1 October 2014, would do little to redress the real terms decline. By October this year the NMW would be around £7 per hour had it kept pace with inflation since 2008.
In reality, there is more that unites workers in the public and private sectors than divides them – and while reports such as these are of interest, they miss the most important point for us as trade unionists: the struggle for a fair day’s pay for a fair day’s work continues – and that struggle will only be enhanced by more workers being in a union.