The Public Sector Pay Squeeze

The teaching profession has seen average pay fall by £3 an hour in real terms while the wages of nurses have stagnated during a decade of public sector salary freezes, a new report for the government’s pay advisers has found.

The report, commissioned by the Office of Manpower Economics – which supports the independent bodies making recommendations on public sector pay, found median hourly earnings of UK workers dropped in real terms by almost 6% between 2005 and 2015, with some sectors suffering worse drops than others. 

The new report found a 3% drop in median hourly earnings between 2005 and 2015 for workers in 32 public sector occupations whose salaries are set by the government on the advice of independent pay review bodies.

It found median hourly pay fell by an even greater amount – 6% – during that period for workers across the board, as the recession of 2008 hit wages hardest in the private sector.

But the report showed George Osborne’s policy of pay restraint on public sector workers began to bite after 2010, as police officers, teachers, midwives, radiographers, nurses and doctors saw a marked decline in median hourly earnings.

Prof Bryson, co-author of the report, said the private sector had seen unprecedented falls in real wages after the financial crisis and then the public sector followed that downward trajectory after 2010.

“It’s not a good picture for virtually anybody,” he said. “The labour market in Britain has been suffering badly whether you are in the private or public sector. I think it’s going to be a question for the government not if but when and how they are going to address the build-up of pay pressures in the public sector.”