Public Sector Pay

We are constantly told that the public sector has to be slashed because that is what has happened to the private sector. To justify this, the Conservatives give us examples of the worst private sector employers who are sacking staff or cutting pay and then saying: "if the private sector has to do this, then so should the public sector". But have private sector workers been hurting? The answer is no.

Incomes Data Service is an independent research organisation providing information and analysis and their data shows that private sector workers have not fared as badly as the Tories tell us. For example, this press release in March says that: 

The median pay settlement in the public sector during 2009 was 2.1 per cent, only slightly above the median figure for the private sector, of 2 per cent.

Further, things are getting worse for public sector workers (July press release): 

The median pay settlement level across the whole economy for the three months to the end of May 2010 remains at 2 per cent, unchanged from the three months to April. ... Pay settlements in the private sector continue to be centred on 2 per cent, which is the median level of awards in both manufacturing and private services. The median in the public sector, however, has fallen to 0.8 per cent, down from 1 per cent in the three months to April 2010. This is the result of an increase in the number of pay freezes and lower awards applied in the public sector over this period, ahead of the Government’s announcement of a two-year pay freeze from 2011.

So March to May the private sector had 2% increases and the public sector had 0.8% increases, less than half. Is this the message that you hear from the Tories and their friends in the Press?

Further, IDS say: 

In the private sector, pay freezes now account for just one-in-ten pay settlements, while in the public sector two-fifths of the pay reviews that took place in the three months to May resulted in pay freezes. Pay freezes are now the most common outcome of pay reviews in the public sector, with over 1.3 million public sector workers having their pay frozen in this three-month period. In the private sector, pay freezes recorded in this period were for the most part confined to care providers and electronics firms.

We are constantly told that the private sector is taking the pain of the recession and the public sector isn't. Yet just one in ten pay settlements in the private sector are pay freezes, but two fifths of public sector pay settlements are pay freezes. The actual figures show that it was the public sector that took the pain, not the private sector.