Public sector employers should follow private-sector pay trends because real-terms pay drops are fuelling industrial action, the Resolution Foundation has suggested.
The think tank pointed out that the spate of strike action witnessed in recent months has been concentrated in unionised workplaces that are either part of the public sector or used to be. Across the public sector, workers have experienced real-terms pay decreases of 9% since 2021, it said.
In July, the government announced pay rises for 2023-24 of between 5% and 7% for a number of public sector employers – some of which were accepted (teachers) and others rejected (junior doctors).
Despite pay offers, high inflation meant that average weekly pay for all workers was 4.1% lower in real terms in the three months to May 2023 than in the three months to May 2021.
Industrial action
Strikes led to the loss of around 3.9 million working days in the past year, the think tank added, more than at any point since the 1980s.
Unionised workers in public sector roles accounted for 96% of all days lost to strike action since 2021, it estimated.
Nye Cominetti, senior economist at the Resolution Foundation, said this reflected the fact that real-terms pay had fallen “severely” in the past few years, alongside stress and difficult workplace conditions in those sectors.
“However, the inflation-driven pay squeeze should also be understood as part of a broader pattern of poor pay growth across both the public and private sectors, and falling pay satisfaction among public sector workers,” he said.
“Going forwards, the government will need to balance fiscal caution with the need to provide a level of pay for public-sector workers that reflects the very real difficulties faced by workers in these sectors, and ensures that vacancies in these sectors continue to be filled.
“In addition, there should also be a renewed focus on improving pay and working conditions for workers in essential sectors like social care, that are largely not unionised, but which are still experiencing the effects of job stresses and pay squeezes.”
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The CIPD’s own Labour Market Outlook found that this backdrop meant that many public sector employers were struggling to fill vacancies, with 50% reporting having hard-to-fill roles in the past three months. Recruitment intentions were also highest in the public sector, with 83% planning to recruit in the next three months.
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