The recession and resulting public deficits have put a spotlight on public sector pay and compensation levels. Many governments have enacted pay freezes, pay constraints and are proceeding with contracting out of public services, partly on the perception that public sector workers are consistently paid more than those working in comparative jobs in the private sector. This study uses the most detailed comprehensive data available on earnings by occupation and finds the reality is quite different. Overall average pay in the public sector is very similar to pay for comparable occupations in the private sector. Public sector pay is also considerably more equitable, whether measured by gender, age, occupational group or by region.
Privatisation, contracting out and outsourcing have been the dominant trends in public services. Now there is increasing evidence of trends in the opposite direction, according to a report from EPSU.
In a number of European countries, including Germany, France and the UK, municipalities are continuing to move towards remunicipalisation rather than privatisation, according to the EPSU-report “Re-municipalising municipal services in Europe”.
Most of the remunicipalisations have taken place when an existing contract or concession with a private company has expired. The key reasons for the remunicipalisations are failures and problems with private sector performance.
And – contrary to what has been claimed – the remunicipalisations have reduced the costs. Municipalities in the UK, Germany and Finland all say that efficiency and cost issues are the most important factors for taking the services back.
Public sector workers are more skilled, work shorter hours and earn more money than their private sector counterparts, according to a new analysis of the differences in pay out today.
But, if you have a degree, you will get paid better in the private sector – and, for five out of eleven years of data published by the Office for National Statistics, the private sector got better pay increases.
The key facts are:
• In 2011, public sector employees were paid on average between 7.7% and 8.7% more than private sector employees
• The public sector is made up of a higher proportion of higher skilled jobs – widening over the last decade as lower skilled jobs have been outsourced from the public to the private sector.
• The public sector consists of a higher proportion of older employees and earnings tend to increase with age and experience