Socialist Worker

Pay figures are a stitch up

Issue No. 2251

A Policy Exchange report quoted in the Telegraph this week claims that public sector workers are 40 percent better off than private sector ones.

But the figures are a stitch up—part of the continued attack on the public sector as “greedy” and “out of control”.

The Institute for Fiscal Studies conducted a report on public sector pay and pensions in February.

It found that the pay gap was actually only 6 percent, when important variables are taken into account.

The Policy Exchange authors admit that their figures, based on hourly pay, “can only be indicative since they do not account for compositional differences in the workforce between the private and public sector.” 

They go on to say that once age, qualifications, gender, hours and region are taken into account, the gap actually falls to 8.8 per cent.

The IFS report shows that when gender differences are taken into account the pay gap shrinks to only 2 percent for men and 4 percent for women.

The reality is that the pay of public sector workers has actually declined since the 1980s because of lack of investment.

The majority of workers—public and private—are living with a pay freeze, now in its fourth year, which in real terms amounts to a pay cut.

Instead of cutting public sector pay, we should fight for better pay for private sector workers.

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Tue 10 May 2011, 18:13 BST
Issue No. 2251
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