From the TUC

Public/private sector pay – what about gender?

21 Jan 2010, by in Equality, Labour market, Public services

Regular readers will be following my occasional series looking at the differences between public and private sector pay, prompted by the regular attacks on the public sector by the small state right. Most of this has been a bit dull and geeky as I want to be more careful with the stats than our critics often are, though it has got quite lively. But what about gender?

So far we have established that median pay in the public sector is higher than in the private sector but:

  • There is nothing new about this, it goes back to at least 1984.
  • It does not mean that someone doing the same job in the public sector will get more pay than if they were doing the same job in the private sector as the two sectors are made up of different jobs.
  • The pay gap is mainly due to the public sector employing a greater proportion of skilled people than the private sector …
  • … and this trend has accentuated over time as the public sector employs an even greater proportion  of graduates today than it did even in the recent past.
  • Graduates in the public sector earn less than graduates in the private sector while those with an educational level lower than A-levels are paid more in the public sector than in the private sector.

In other words the differentials in the public sector are lower – the gap between the lowest paid and the highest paid is smaller than in the private sector. From my point of view, this means the public sector has fairer pay than the private sector, though this may not be the point of view of a top public sector professional looking at private sector boardroom pay.

And that’s the end of the ‘new readers begin here’ bit. If you want to read earlier episodes they are here and here.

But what about the gap between men and women? If my view that pay is fairer in the public sector then you would expect the gender pay gap to be smaller in the public sector. So I thought I would have another look at the ASHE statistics that have been the main source for this exciting series.

Given recent rows, I need to be careful to compare like with like as much as possible and to be very clear about what it is that we are measuring.

So the figures that follow are all drawn from table 13.6a of the 2009 ASHE which looks at hourly pay, excluding overtime. It breaks this down for men and women; and by full and part time working. I have calculated pay gaps by expressing the difference as a percentage of the larger figure. In other words the gender pay gap is the difference between men and women expressed as a percentage of male pay. This is the same methodology used by ONS in their statistical bulletin – that does not mean there might not be other useful measures, but this is the one used in official statistics. (So argue with them – not me – if you don’t like this approach.)

This is what we find:

gender pay gap (hourly pay excluding overtime private public
all 28.9% 21.0%
ft 20.8% 11.6%
pt 0.4% 18.3%

As we can see the gender pay gap is smaller in the public sector than the private sector across the workforce as a whole, and for full-timers.

I think the most relevant measure here is for full timers, as these will have the least compositional effects. The full time male workforce will still be made up of a different balance of jobs than than those done by full-time women, but they will be more alike than the workforce as a whole  – where the lower pay of part-time jobs – mainly done by women – will have a huge impact. (Full-time women sounds like the title of a country song, but you know what I mean.)

The gender pay-gap is worse in the public sector for part-time workers, but I suspect this is due to the atypical nature of men who work part-time. My hunch would be that because the public sector has more flexible working there are men who work part-time in different parts of the workforce, while in the private sector they are concentrated in low-paid service sector jobs – largely done by students, and more recently perhaps by those getting off the dole queue.

Another way of cutting these figures is to compare the public/private sector gap by gender:

public/private pay gap (hourly pay excluding overtime)
   
all 22.8%
men 23.1%
women 30.7%
ft men 20.1%
ft women 28.4%
pt men 40.4%
pt women 27.4%

I’ve put all the figures in for completeness, but again the interesting figures are for full time workers and part-time women as the compositional affects for part-time men will be extreme. There is again a clear difference. The gap between women in the public and private sectors is greater than for full time men.

Again we need to be aware of compositional affects, and I hope in a future post to be breaking these figures down by educational level as probably the best way of comparing like with like.  That requires some more complicated excavation of the Labour Force Survey as the figures are not easily available online.

But the analysis so far suggests that there is an argument that one further reason that median pay is higher in the public sector than the private sector is that women are treated better in the public sector than in the private sector.

The gender pay gap for full-timers has got worse in both sectors since 1998. As the statistical bulletin says:

For full-time employees the gender pay comparison increased from 11.2 per cent in 2008 to 11.6 per cent in 2009 in the public sector, compared to an increase of 0.9 percentage points in the private sector to 20.8 per cent from 19.9 per cent.

But I think the change in the public sector (still very small)  may well be due to the inclusion for the first time of the nationalised banks in the public sector workforce. I have asked ONS about this, and will update.

UPDATE: The very helpful people at ONS have told me (though I’d rather not be “dear customer”):

Between 2008 and 2009 Lloyds Banking Group, the Royal Bank of Scotland Group and HBOS PLC were reclassified from the private sector to the public sector. Interpretation of public / private sector movements is therefore more difficult between 2008 (when they are were the private sector ) and 2009 (now in the public sector).

AND ANOTHER UPDATE:

 I wanted to clarify whether ASHE 2009 contained bank staff before doing a historical comparison. As this distorts the 2009 figures I’ve therefore had a look at the 2008 and 1999 figures. This conveniently gives us a decade, although 1999 is the earliest year in which these figures are easily available on-line.

The figures show that the lower gender pay gap in the public sector is not new – and while it’s got a bit better in both there hasn’t been a huge change. The public sector has the slight edge on improvement, but I wouldn’t make anything of 0.1 per cent. As before this is based on hourly pay for full timers excluding overtime.

  Private Sector pay gap Public sector pay gap
  1999 2008 change 1999 2008 change
  23.0% 19.9% 3.1% 14.4% 11.2% 3.2%

One Response to Public/private sector pay – what about gender?

  1. Tweets that mention Public/private sector pay – what about gender? | ToUChstone blog: A public policy blog from the TUC — Topsy.com
    Jan 21st 2010, 7:00 pm

    [...] This post was mentioned on Twitter by ToUChstone blog, Nigel Stanley. Nigel Stanley said: Geeky post: gender element of the public/private pay gap http://bit.ly/7VXDxM – womens' better deal in the public sector makes gap bigger [...]

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