With the public sector pay negotiations getting underway, it is timely to step back from the details and look at the broader landscape. For it is clear: if the wage structure in the overall economy mirrored the wage structure in the public sector, we would have a more prosperous economy and society; the recession wouldn’t have been so hard, the recovery wouldn’t have been so delayed, and the social deficits arising out of inequality would not be so endemic.
While there is much focus on the private-public wage differential, there is less attention paid to the distribution of wages from the bottom to the top – which is the key to long-term sustainable growth and better social outcomes. Let’s have a quick look at the former first.
The CSO has done exceptional and detailed work on comparing private and public sector pay. The lazy comparison is to compare the headline average private and public sector pay. However, this comes up against the like-for-like dilemma. For instance, there are no hospitality workers in the public sector; there are no Gardai in the private sector. Without a like-for-like comparison you get all sorts of numbers that don’t tell you much.
The CSO has compensated for that – comparing professions, age, duration of employment, size of enterprise, educational qualifications. When they do that, they come to some interesting conclusions.
Among this grouping – which makes up the overwhelming majority of public sector workers – the ‘premium’ (i.e. the additional amount public sector workers above private sector workers) is a little more than one percent higher. On a like-for-like basis, public sector workers earn fractionally more than private sector workers.
What is more interesting is the gender difference. Men in the public sector actually earn less than males in the private sector – two percent less. However, women in the public sector earn five percent more than their private sector counterparts on a like-for-like basis. And this is a good thing when one considers that women still face pay (and other types of) discrimination in the workplace. If there was less gender discrimination in the private sector, the overall public sector premium would probably turn negative.
Just one more word: This data comes from the CSO. Since 2010 there have been small wage movements. Between 2010 and 2014 (4th quarter):
- Increase in private sector weekly earnings: 2.3%
- Increase in public sector weekly earnings: (-0.7%)