Comparing pay trends in the public services and private sector Labour Research Department 7 June 2018 Brussels
Issued to be covered The trends examined The varying patterns over 14 years and the impact of the crisis The overall picture
Trends examined Looks at changes in earnings over 14 years (2003 to 2017) NOT earnings themselves Based on available national earnings statistics Not Eurostat statistics Public compared with private sector where possible Differences in extent of public sector Where public and private not available Public admin, health and education compared with total economy Sometimes this is not possible
Countries covered In EU (24) EU 28 with following exceptions Belgium, Greece, Luxembourg and Portugal Outside EU (18) Albania, Armenia, Azerbaijan, Belarus, Bosnia & Herzegovina, Georgia, Iceland, Kosovo, Kyrgyz Republic, FYRO Macedonia, Moldova, Montenegro, Norway, Russia, Serbia, Tajikistan, Turkey and Ukraine
Varying patterns Comparable pay growth interrupted by the crisis (8 in EU and 2 outside EU) Lower public services pay growth made worse by crisis (4 in EU) Lower public services pay growth not clearly linked to crisis (1 in EU and 2 outside EU) Similar pay growth in public services and private sector (8 in EU and 4 outside EU) Faster pay growth in public sector (3 in EU and 7 outside EU) Position unclear (3 outside EU)
Comparable pay growth interrupted by the crisis (10 states) Often have public sector pay cuts or pay freezes Pay cuts and freezes generally imposed not negotiated Timing of divergence varies Some public sector pay recovery after that BUT do not catch up
Comparable pay growth interrupted by the crisis in EU 28-1 Austria: Czech Republic: 1 140% 170% 160% 130% Public sector Private sector: manual workers 140% 130% Business sphere Non-business sphere Private sector: non-manual workers
Comparable pay growth interrupted by the crisis in EU 28 2 Ireland: but short period 106% Italy: 140% 104% 130% 102% 98% 96% 94% 92% Public sector Private sector Public administration Private sector
Comparable pay growth interrupted by the crisis in EU 28 3 Latvia: Romania: 400% 500% 350% 450% 300% 400% 350% 250% 300% 250% 50% Public sector Private sector 50% Public ownership Private ownership 0% 0%
Comparable pay growth interrupted by the crisis in EU 28 4 Slovenia Spain: but short period 140% 115% 130% 105% Public sector Private sector 95% Public admin Health & social work Education 85% Total 2005200620072008200920102011201220132014201520162017 2008 2009 2010 2011 2012 2013 2014 2015
Comparable pay growth interrupted by the crisis outside EU Azerbaijan Serbia 450% 450% 400% 400% 350% 350% 300% 300% 250% Civil servants Economy 250% Public admin 50% 50% Health Education Total 0% 200520062007200820092010201120122013201420152016 0%
Lower public sector pay growth made worse by crisis (4 states) Public sector pay freezes or pay cuts Pay freezes and pay cuts imposed Although finally agreement in Lithuania Reason why public sector pay already growing slower than private sector pay before the crisis Booming private sector: Bulgaria, Lithuania Constraints on public sector: France, Hungary
Slower public pay growth made worse by the crisis in EU 28 1 Bulgaria: 450% 400% 350% 300% 250% 50% 0% Public sector Private sector France: 140% 130% Public admin, education & health All civil servants All nonagricultural
Slower public pay growth made worse by the crisis in EU 28 2 Hungary: 300% Lithuania 350% 250% 300% Budgetary Institutions Business Sector 250% Public sector 50% 50% 0% 0%
Slower public sector pay growth (3 states) Varied group of countries Reasons vary between countries
Gap before crisis then parallel growth EU 28 Germany: 140% 130% Non-market services Private sector 2005200620072008200920102011201220132014201520162017
Slower public services pay growth outside EU Belarus: 1800% 1600% 1400% 1 1000% 800% Public admin Health Education Total Kyrgyz Republic: no public admin 115% 105% Health and social services Education Total 600% 95% 400% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 85% 2014 2015 2016
Public services and private sector pay on similar path (16 states) Strong presence of Nordic countries (Denmark, Sweden, Iceland and Norway) But separate figures for central, regional and local government make comparisons more difficult Impact of crisis seen in public sector pay cuts and freezes But public services have caught up
Public services and private sector pay on similar path EU 28 1 Croatia: Cyprus: but short period 140% 130% Public admin Health and social work Education Total 115% 105% 95% 85% Public admin: government Public admin: other Education Health & social work 2009 2010 2011 2012 2013 2014 2015 2016
Public services and private sector pay on similar path EU 28 2 Denmark: Estonia: 350% 140% 300% 130% 250% Central government Local and regional government Private sector 50% 0% State Local government Estonian companies Foreign companies
Public services and private sector pay on similar path EU 28 3 Malta: but short period Netherlands: 130% 125% 115% 115% Government 105% Public admin, education & health Total 105% 95% Subsidised sector Private companies 95% 85% 2012 2013 2014 2015 2016 2017
Public services and private sector pay on similar path EU 28 4 Poland: Sweden 160% 1 140% 160% 140% 130% Central government Municipalities Public Private County councils Private sector non-manual
Public services and private sector pay on similar path outside EU 1 Iceland: but short period 170% Norway: Public sector 160% 1 Central government 140% 160% Health enterprise 130% Public sector (median) 140% Local government Private sector Private sector (median) Private sector and public enterprises 2008 2009 2010 2011 2012 2013 2014 2015 2016
Public services and private sector pay on similar path outside EU 2 Moldova: 600% Ukraine: 1400% 500% 400% 300% Public Private Other* Total 1 1000% 800% 600% 400% Public admin Health Education Total 0% 0%
Public pay growing faster than private sector pay (10 states) Several examples in Western Balkans Albania, Bosnia and Herzegovina, Kosovo and Montenegro Crisis has had an impact Data is often limited
Public pay growing faster than private sector pay in EU 28 1 Finland: at least in central govt 160% Slovakia: 240% 220% 140% 130% Central government Local government 1 160% Private sector 140% Public sector Private sector
Public pay growing faster than private sector pay in EU 28 2 UK: 140% 130% Public Sector Private Sector
Public pay growing faster than private sector pay outside EU 1 Albania: 300% Bosnia and Herzegovina: 160% 250% 140% Public sector All economy 130% Public admin Health 50% Education Total 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public pay growing faster than private sector pay outside EU 2 Georgia: 400% Kosovo: but short period 140% 350% 130% 300% 250% Non-business sector Business sector Public 50% Private 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Public pay growing faster than private sector pay outside EU 3 Montenegro: but short period 125% Russia: 900% 115% 105% 800% 700% 600% 500% 95% 85% Public admin Health Education Total 400% 300% Public admin Health Educatio n Total 2012 2013 2014 2015 2016 2017 0%
Public pay growing faster than private sector pay outside EU 4 Turkey: but no public admin 300% 250% 50% Health Educat ion Total 0% 2006 2010 2014
No clear pattern (3 states) All show varied position of individual public service industries Public administration, health and education But public administration has lowest rate of pay increase
Variations in public services mean there is no clear picture 1 Armenia: 800% FYRO Macedonia 700% 600% 500% Public admin Education Health and social work Total 1 160% 400% 300% 140% Public admin Health Educatio n Total 0% 2004200520062007200820092010201120122013201420152016
Variations in public services mean there is no clear picture 2 Tajikistan: 5000% 4500% 4000% 3500% 3000% 2500% 2000% 1500% Public management Public admin Health care Health & social Education Education Total 1000% 500% 0%
The present No figures go beyond 2017 and some end in 2016 Recently seen pay increases in public services After long periods without any or with limited increases Italy, UK Or at a higher level Denmark, Germany best increase for years Will situation be different in 2018?
Tentative conclusions Crisis still being felt 33% of states (14 out of 42) have lower public services pay growth compared with private sector following crisis EU states have kept down public sector pay more than non-eu states Public sector pay lagging EU: 13 non-eu: 4 Public sector similar or ahead EU: 11 non-eu: 11 Not clear Non-EU: 3
Thank you for your attention Questions and comments Lionel Fulton Labour Research Department lfulton@lrd.org.uk +44 20 7902 9810