Workers with degrees earn more in the private sector, as report delivers riposte to anti-public sector brigade


Workers with degrees earn more in the private sector than the public sector, while staff with lower level and no qualifications earn more in the public sector, according to a TUC analysis of official statistics published ahead of the latest annual pay statistics out later this morning.

While comparisons of overall pay across the public and private sectors are meaningless given the different types of jobs in each sector, the TUC has examined pay levels broken down by qualification level as they provide the best possible comparator.

The TUC analysis shows that people educated to degree level earn 4.7 per cent more than public sector workers with the same level of qualifications, while employees without any qualifications earn 3.2 per cent less in the private sector.

The analysis also highlights a stark skills divide between the sectors, with public sector employees almost twice as likely to have a degree as workers in the private sector. Four in ten public sector staff have a degree – with the civil service and health sector professions such as physiotherapy and radiography increasingly requiring high level qualifications. The proportion of workers with no qualifications is twice as high in the private sector.

This skills divide has been driven by the growing number of specialised public sector jobs such as nursing and teaching, as well as the outsourcing of low-skilled public sector jobs such as cleaners and dinner ladies to the private sector, says the TUC.

While the terms and conditions of outsourced jobs are theoretically protected by TUPE regulations, the wages of workers in newly privatised jobs – the vast majority of which are done by women – are often reduced by private companies as they take on new staff, which increases both the public-private sector pay gap and the gender pay gap, says the TUC.

TUC general secretary Brendan Barber said: “The anti-public sector brigade has been guilty of some pretty misleading claims on public sector pay. The fact is that most public and private sector jobs are completely different and overall pay comparisons are meaningless, but it won’t stop people using them to attack the pay of nurses, teachers and home care workers.

“But it is true that pay and benefits are fairer in the public sector, with all employees entitled to the same staff pension schemes and the gap between the highest and lowest-paid far smaller than in the private sector.

“While high-flyers with degrees can expect to earn less in the public sector, lower- skilled and lower-paid staff can expect a better deal in the public sector.

“For small-state fanatics to get their wish and bring the public sector into line with the private sector, the government would need to cut the wages of the poorest public sector workers and give huge pay rises to those at the very top. That kind of reform is unlikely to get much support from taxpayers.”

This work is licensed under a Creative Commons Attribution-NonCommercial License.
Author avatar