Pay gap grows between public and private sector

The gap between public sector and private sector pay has risen despite the Government’s pay restraints, according to thinktank Policy Exchange.

Analysis from Policy Exchange found that typical public sector workers received 35% more per hour than private sector employees last year.

The thinktank said that the growing pay gap was also apparent when differences in the composition of the workforce were taken into account. When age, experience and qualifications were considered, all of which can impact on pay, public sector workers were found to earn 8.8% more per hour than private sector employees, roughly double the 4.3% difference found two years earlier.

Policy Exchange director Neil O’Brien commented: “Public sector pay has got hugely out of control. There is pressure on budgets like never before because of the deficit.

“If the unions want to preserve their members’ jobs they have to realise that pay is an issue which will have to be looked at.”

However, the TUC have accused the thinktank of trying to “stir up divisions” between public and private sector workers.

TUC general secretary Brendan Barber said: “The truth is that both [sectors] are having a terrible time. Public sector workers are facing a pay freeze, job losses and have already seen the value of their pensions cut by 25%.

“In the private sector, pay freezes are still common and public spending cuts are doing just as much damage as they are in the public sector.”

XpertHR pay and benefits editor Sheila Attwood, in an Employment Intelligence blog post, added: “There is no doubt that workers in the public sector, many of whom are currently subject to a multi-year pay freeze and may also be at risk of redundancy, will not share the view that they are so overpaid compared with those in the private sector.”

For further information on pay trends, read XpertHR’s latest data.

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