This morning saw the publication of a paper “Public and private sector terms, conditions and the issue of fairness” by right wing think tank Policy Exchange.
The sound byte from this paper is essentially that Public Sector pay is now significantly outstripping that in the private sector to the point where it is becoming unfair and reaches the conclusion that “significant reforms will need to be made to limit job losses in the public sector and to achieve equity and fairness in the labour market.”
There’s a fairly comprehensive debunking of the paper on the Guardian’s Comment is Free blog by Richard Seymour*, “Public sector pay – the myths exposed”, but for myself I’m not even going to bother checking the methodology of the research, or fisking the report.
No – as someone who has spent most of his life working in the public sector, there are some truths which I hold to be self evident :
I’ve been a highly qualified teacher for some time – on occasion I’ve been also a highly paid one. I’ve never been paid what could really be considered a low salary since I qualified with first class honours in 1989.
I have however found that on several occasions friends and acquaintances with similar qualifications working in the private sector have earned considerably more than me – not just a thousand or two a year – but sometimes double or three times the salary that I earned. Almost all of them have suffered periods when their salary has dropped – not just frozen – but drastically reduced – because most have suffered unemployment on one or more occasions.
It’s become clear to me that the cycle of “boom and bust” is something which affects the private sector more than the public. When times are good, the rewards are great, and the hardworking and the successful reap the rewards in fistfuls. Meanwhile, the public sector plod along with below inflation rises – without bonuses and with seemingly uncompetitive salaries.
When the lean times come though the public sector still plod along, they get low pay increases, sometimes pay freezes but they are far more likely to keep their jobs, far less likely to actually suffer a loss of salary, and generally are protected from the ravages of the storm. The private sector meanwhile get pay cuts, lost bonuses and lost jobs – fairly quickly.
So over a cycle of several years it all tends to even out. For those brave enough to take the risks it more than evens out for the private sector big wheels – as they can make enough in the years of plenty to enable them to “buy low” in the lean years.
What Policy Exchange are asking for then is “an end to boom and bust” – which surprised me a little.
Perhaps they should employ Gordon Brown as chancellor
- Public sector pay soaring ‘out of control’ (telegraph.co.uk)
- Leading article: Learn the art of sensible opposition (independent.co.uk)
- On the public and private sectors in Nigeria (loomnie.com)
- Average public sector worker takes 12 sick days a year – hitting taxpayers for £9billion (dailymail.co.uk)
- Public sector pension reform: tough but fair (blogs.telegraph.co.uk)
- Ros Altmann: ‘new proposals will be fairer for women and low paid workers’ (telegraph.co.uk)
- Wage Negotiations, Transparency, and Justice (businessethicsblog.com)
- The private market for tuberculosis drugs (medicalxpress.com)
- Many former public sector workers will not be hired by private sector (newstatesman.com)
- Daily Mail’s baseless ‘pay apartheid’ slur on public sector (leftfootforward.org)
( There is a flip side to this however – during the past 12 months I’ve gone from earning c. £79k per year, to struggling to gain a permanent contract on around half that – I’d say that this is generally the exception rather than the rule – but does prove that public sector workers are certainly not immune to economic tribulation )
*Some of the more diligent of my readers may well have noticed that the Richard Seymour who did the blog isn’t the same one which WordPress has automatically linked to – thought I’d leave it anyway as it’s mildly amusing !
Interesting to see how the Government & the media have been getting in a tiz about public sector pay : BBC News – 9,000 in public sector get more pay than prime minister with “research” for a Panorama documentary BBC Panorama to air programme on public sector ‘rich list’ (newstatesman.com) suggesting that 9,000 people working in the public sector are now paid more than the Prime Minister.
I’ve worked in the public sector for most of my career – in education – and so too has my wife – in the health service.
We’ve noticed over several cycles, that pretty much the same happens to our pay relative to the private sector.
In times of economic boom, our pay has lagged well behind private sector salaries – when friends working for retail and financial companies have received whacking great pay rises, we’ve received a “cost of living rise” – usually at less than the rate suggested by inflation rates. Where they’ve received bonuses, we’ve received a memo, or a Christmas card.
It’s not all been bad though because in the lean times we’ve still usually received a cost of living allowance, where they’ve taken a pay cut, and reduced hours; and where we’ve had a memo or a Christmas card, they’ve had their ‘cards’ as well – and their P. 45′s.
So it seems fairly evident that public sector pay rises less quickly in times of plenty, and falls more slowly in times of lean. In the words of Talking Heads “Same as it ever was” (and the video’s at the bottom of the page – any excuse for a bonus Talking Heads video !)
So please forgive me if I’m unimpressed by the suggestion that public sector employees are somehow “fat cats”. There’s only one market for staff remember – and the difficulties that public sector organisations have in attracting top staff away from highly paid private sector jobs, during the boom times, are what drives up the salaries – they stay there during the downtimes because the staff are generally treated a little more fairly by their employees. Come the next boom, they’ll lag behind again.
So let’s wait and see what the public sector fat cats look like after the next set of bankers’ bonuses.
There is of course also the question of why the PM’s salary should be some kind of yard stick. I’m not sure this article’s the best place to debate it.
Do remember though that David Cameron‘s much publicised 5% pay cut is a somewhat easy gesture to make for a man whose personal wealth has been estimated at around £30, 000, 000 Claims that David Cameron has a £30m fortune sit uneasily with taxpayers. So what is the truth about his money? | Mail Online . While this may be somewhat exaggerated it is certainly true that both David Cameron and his wife are of families with a long tradition of extreme wealth. Which once again begs the question – Austerity for who, Mr Cameron ?
- 9,000 In Public Sector Paid More Than PM (news.sky.com)
- BBC Panorama to air programme on public sector ‘rich list’ (newstatesman.com)