Public Sector Employees Earn Over £3,000 More Than Private Workers

Reports revealed by the Daily Mail state that Public sector wages in certain areas in the UK may surpass those of the private sector by more than £3,000 a year. This means that workers still benefit from greater pay premiums in spite of a three-year squeeze on the millions employed by the state.

Discrepancies among sectors and regions

State workers in some parts of the North East, Merseyside and the South West, appear to be paid as much as 14 per cent more – or £3,200 a year (on average) compared to their private sector counterparts.

However in Central London, the East and South East, the average public sector employee is paid relatively less than those in the private sector.

This divergence between the pay levels of the two sectors shows that the Public Sector employees are provided with a hearty salary and benefits at the expense of their private sector equivalents.

Reports also reveal that more than 12% of national income (an amount equal to £180 billion) is reserved for public sector pay. On average, a public sector employee takes advantage of a 6.1% pay premium in the UK, earning as much as £1,400 per annum more than someone in the private sector. Women, however, are likely to receive larger pay premiums than men.

Other facts about the Public Vs. Private divide

Data published by the Office for National Statistics showed that in 2011:

  • Public sector employees were paid on average between 7.7% and 8.7% more than private sector employees.
  • The public sector employs a higher proportion of high-skilled jobs – increasing over the last decade as low-skilled jobs have been outsourced from the public to the private sector.
  •  The public sector is made up of a higher proportion of older employees while earnings tend to increase with age and experience

Rebalancing the pay is the key to change

Chancellor George Osborne has warned that public sector pay levels are so unhealthy in some regions that they are squeezing out the private sector, and suggested that they should be adjusted according to local labour markets trends.

Rebalancing the pay and pensions of public sector workers so that they are in proportion to the private sector would save £6.3billion a year. Moreover, such a reform would create at least 288,000 private sector jobs in some of the least advantageous regions of the country.

On the whole, it seems that the wage in both public and private sectors should prompt the creation of a system that reflects the current situation in local labour markets, so that the pay gap decreases not only between the two sectors but across different areas of the nation.  

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