PUBLIC SECTOR PAY
Analysis of public and private sector earnings
The gap in average earnings between public and private sector workers has increased since April 2007, the year before the start of the recent recession, according to official figures.
But the Office for National Statistics warned that comparison of the two sectors is complicated because of differences in the types of job and characteristics of employees. Allowing for these differences as far as possible, in April 2010, public sector employees were paid on average 7.8% more than private sector employees, an increase of 2.5 percentage points since 2007.
Comparing employees who have a degree or an equivalent qualification shows that on average those in the public sector earned around 5.7% less than those in the private sector in 2010.
The ONS analysis uses data collected from two sources: the Annual Survey of Hours and Earnings and the Labour Force Survey.
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Workforce composition
The research also looks at the differences between the types of jobs in the two sectors and the characteristics of the people within them, showing that:
The public sector is made up of a higher proportion of higher skilled jobs - widening over the last decade as lower skilled jobs have been outsourced from the public to the private sector.
The public sector consists of a higher proportion of older employees and earnings tend to increase with age and experience.
The public sector workforce contains more people with a degree or an equivalent qualification, 38% in 2010, compared with 23% in the private sector.
The gap between the lowest and highest earners is higher in the private sector with the top 5% (95th percentile) of earners paid around 5.6 times more than the bottom 5% (5th percentile). The gap is 4.6 times in the public sector.
A final word
“There are other factors that could influence the pay difference and this analysis does not include other forms of remuneration, for example pension contributions, company cars and health insurance. Also, ASHE does not cover those who are self-employed so it will miss many high paid self-employed and also some lower paid.
“The timing of the survey in April means that only bonus payments related to April are included, outside of the main bonus season which is normally January to March. These factors would account for some but not all of the difference.” - Estimating Differences in Public and Private Sector Pay, by Andrew Damant and Jamie Jenkins, Office for National Statistics, July 2011.
Want to know more?
Title: Estimating Differences in Public and Private Sector Pay, by Andrew Damant and Jamie Jenkins, Office for National Statistics, July 2011.
Availability: You can download the 14-page report, in PDF format, free of charge, at www.statistics.gov.uk/cci/article.asp?ID=2706.
--> "Average pay gap between public-private sectors 'widens'", bbc.co.uk, July 2011.
Public sector employees were paid 7.8% more on average than private sector staff in April 2010, the Office for National Statistics (ONS) said: www.bbc.co.uk/news/business-14028848.