Public sector pay rising faster than private sector

OFFICIAL figures show public sector pay is still rising at a faster rate than in the private sector, although the gap is narrowing.

There is disagreement over the exact rate, given the difficulties of making like-for-like comparisons.

A study last week by the Institute for Fiscal Studies found the average public sector worker earns 13 per cent more than the average in the private sector.

But the comparison was based on a crude measure of average hourly wages which did not take skill levels into account. It means, when adjusted, the average public sector pay was more like 3 per cent higher than the private sector for those with degrees.

Figures from the Office for National Statistics show that until 2003 private sector workers earned more than those in the public sec- tor. But in recent years, pay freezes have meant the gap is narrowing as private sector pay grows faster.

According to the ONS, seasonally adjusted average weekly earnings for regular pay in the public sector was £510 a week in May, compared with £4 in the private sector.

Two years of frozen public sector pay were followed by 1 per cent caps – introduced partly to even out pay disparity after private sector wages collapsed following the 2009 financial crisis.

Comparisons are difficult as there are more high and low earners in the private sector, and public sector workers tend to be more highly educated. Public sector pensions, typically more generous than the average in the private sector, are not included in the figures. But bonuses, more common in the private sector, are also not included.