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thomas davison

Public-private pay gap widens even further: Average private sector earnings have 'fallen faster' than state employees during the recession

Gap has 'increased substantially' in the past four years, new report says
Public-sector hourly wage fell by 95p, private sector by �1.49 since 2009
Undermines union claims that state workers targeted by austerity drive

PUBLISHED: 00:50, 12 June 2013 | UPDATED: 00:51, 12 June 2013

The pay gap between state and private-sector workers has �increased substantially� in the past four years, Britain�s leading economic forecaster reveals today.

Despite strikes by state workers over pay and pension changes, it says the earnings of private-sector workers have �actually fallen faster over the last few years�.

Experts said the report by the Institute for Fiscal Studies undermines the case made by public-sector unions that state workers are the only ones being hurt by the Government�s austerity drive.
Gap: The new report says that private-sector pay has 'actually fallen faster' than state earnings in recent years

Gap: The new report says that private-sector pay has 'actually fallen faster' than state earnings in recent years

During the depths of the recession in 2009, the average public-sector worker earned �16.64 an hour, which has dropped to �15.69 per hour � a fall of 95p, according to the IFS, which adjusted the figures for inflation.

But the cuts have been even more painful for private-sector workers.

In 2009, their hourly pay was already lower at �15.15, which has now fallen �1.49 to �13.66.

Overall, the IFS said the number of workers hit by wage freezes or pay cuts is at its highest level since records began around 40 years ago.

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It warned falling pay particularly hurts loyal workers who have stayed in the same job for years.

In 2010 and 2011, 12 per cent of these staff in both sectors had a pay freeze, while 21 per cent had a pay cut. The IFS said many employees accepted a pay freeze or a cut because they were so desperate to keep their jobs.

The report states: �They attach more weight to staying in work (because their expected time to find another job is longer than in the past) than on securing higher wages, and are thus willing to accept lower wages in exchange for holding on to their job.�

David Ruffley, the Tory MP and a senior member of the Treasury Select Committee, said: �The public sector often think austerity is just targeted on them.
Targets: Experts say the report undermines the case made by public-sector unions that that state workers are being singled out for the Government's austerity drive

Targets: Experts say the report undermines the case made by public-sector unions that that state workers are being singled out for the Government's austerity drive

�But these figures show that the private sector has taken an even bigger hit.

�The colossal mismanagement of our economy under Gordon Brown led to pain for the public sector. But let�s not forget the private sector, where most of the population are employed, have been hit harder.�

Matthew Sinclair, of the TaxPayers� Alliance campaign group, said: �Even modest pay restraint in the public sector has been repeatedly opposed and undermined by the unions, with taxpayers footing the bill. The public sector also continues to enjoy a huge pension premium and other generous perks while the rest of us endure falling wages.

�The Chancellor must cut spending in the forthcoming review.

�This is further evidence the burden must fall on the public sector, not hard-pressed families.�

The Institute for Fiscal Studies said the reason why so many workers have seen their pay cut or frozen is due to a �dramatic decline� in trade union membership.

It claims wages have partly been hit by the falling number of staff covered by collective bargaining agreements, which are struck by unions for large groups of workers, which makes it easier for bosses to keep pay down.

Frances O�Grady, the general secretary of the Trades Union Congress, said: �We are concerned that in some non- unionised areas of the labour market, low pay, poor conditions at work and job insecurity are becoming the norm for workers irrespective of the profits companies make.�

Yet another example of the priviliged conditions in the public sector. Higher pay , longer holidays, earlier retirement into a gold plated pension, better sickness leave, and try and sack someone in the public sector, just about impossible. And they moan that there has been a pay freeze for a couple of years, while in fact private sector pay has fallen.

It is time to have a cull on the bloated public sector non-jobs who think they are a legend in their own minds, sack them and let them see what life in the real world is all about.