Gap between Public & Private Sector Pay Widening

A Director of Policy Exchange, Neil O’Brian, said that \”Public sector pay has got hugely out of control. There is pressure on budgets like never before because of the deficit. If the unions want to preserve their members\’ jobs they have to realise that pay is an issue which will have to be looked at.\”

The editor of IDS Pay Report, Ken Mulkearn, went on to say that \”While our headline figures show pay settlements remain stable, the whole-economy median obscures a wider reality and clear differences between the public and private sectors. The latest figures show that private sector pay awards are where we thought they would be this time of the year, reflecting a degree of recovery in profitability and higher levels of inflation. However, the picture for 2011 is not yet complete and the outlook is difficult to assess.\”

However, although pay may be higher in the public sector the amount of opportunities are certainly far lower, especially once the Government’s budget cuts come fully into force in the near future. At the moment the private sector appears to be driving ahead and creating far more permanent jobs in particular. Roger Tweedy, the Research Director at the Recruitment & Employment Confederation, recently said that “Employers are feeling more confident and are taking a long-term strategic view of their workforce planning. Creating more permanent jobs and the lifting of headcount freezes are solid indicators of this returning confidence.  This is encouraging news at what remains a difficult and volatile time for the UK jobs market. The survey also confirms the emergence of a two-tier jobs market, with 60% of public-sector employers predicting a significant impact on their workforces as cuts begin to bite.  The unexpected surge in business confidence gives hope that private-sector employers can absorb further public-sector job losses.”

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