Another pop at the public sector

Anything which claims that public sector workers have higher pay or higher sickness levels or better conditions than the private sector seems guaranteed to garner headlines and the report from right of centre Policy Exchange on pay comparisons this week was no different.

Issued on May 9, after the purdah election period was over and the results fully aired in the weekend media, the report Public and private sector terms, conditions and the issue of fairness gained wide coverage on Radio 4’s Today programme as well as in national newspapers.

It argued that the gap between private and public sector pay actually increased – in favour of the public sector - in 2010 despite the pay freeze, mainly because of a continuing fall in wages at the bottom 30% of private sector workers. Only at the top, despite the media focus on public sector chiefs’ pay, was the gap static primarily because of course top private sector remuneration vastly outstrips those in the public sector.

It seems to me that the report can be taken in two ways. There is the obvious angle swallowed by the national media that the public sector is still on a gravy train - and the Policy Exchange is after all a right of centre think tank. Or there is the other angle - that lower paid staff in the private sector had wages, terms and conditions shredded during the recession while public sector staff generally hung onto their packages, despite the two-year pay freeze.

This will not continue. The pay freeze, the proposed raising of pension contributions (though not for lower paid workers), layoffs and reduced terms and conditions all mean a drop in average remuneration for public sector, and in particular council, workers. And while it is true that lower paid manual work tends to be better paid in the public than the private sectors this isn't saying much. Nor is it desirable to increase the impoverishment of lower paid workers by a race to the bottom. If nothing else, lower wages, worse terms and conditions and no pensions will simply transfer the costs to the taxpayer through more housing, council tax and other welfare benefits.