Doubt cast on claims of higher public sector pay

Analysis of official statistics has cast doubt on claims that public sector workers earn more than their private sector counterparts, blaming a large proportion of the gap on the low uptake of company pension schemes.

A recent article by the Office for National Statistics (ONS) has led to reports that public sector workers are paid better than their private sector counterparts. However, the article’s authors say they found “that the answers are more complex than such claims suggest”.

The statistics showed that, based on all full-time employees, the median sum of pay and pension contributions in April 2009 was £615 per week in the public sector, and £479 per week in the private sector.

Sheila Attwood, editor of pay and benefits at XpertHR, commented on the Pay Intelligence blog: “The article says that this is largely due to the fact that 57% of private sector employees do not belong to their employer pension scheme (and therefore have zero pension contributions), compared with just 10% of public sector workers.

“However, when comparing like with like (employees with pension contributions) the results are reversed: the median total reward in the public sector falls to £555 per week, but rises to £604 in the private sector.”

The ONS article also noted that the report “represented a simple comparison” that did not take into account the different composition of the two sectors.

Adam Lent, head of economics at the TUC, said: “You can’t make direct comparisons between the public and private sector workforce. The public sector has many more professional and highly skilled workers within it than the private sector. Averages simply do not tell us anything useful.”

The Annual Survey of Hours and Earnings by the ONS was based on a 1% sample of employee jobs taken from the PAYE records of HM Revenue & Customs.

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