As public sector pay falls, should the coalition do more to close the gap with private wages?

Oct 16, 2013

“We should not be too concerned about short-term changes in the raw difference between public and private sector pay. A typical public sector worker still enjoys an hourly pay premium of 6.1 per cent when adjusted for age, gender, full-time and part-time work, region, qualifications and length of employment: around £1,400 a year – and as high as £3,200 in some parts of the country. This premium has been relatively steady since the coalition’s decision to freeze public sector pay scales. However, this does not include non-pay remuneration and benefits, such as longer holidays, earlier retirement and more generous public sector pensions. To go further, we need to recognise that pay freezes and rigid national pay scales are not part of the solution. We need to abolish national pay deals and move to a more flexible system which better reflects local needs.”

Read the opposing view on City A.M.’s website.

Author

Ed Holmes

Senior Research Fellow for Economics & Social Policy, 2009-2013 Read Full Bio

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