Wednesday, December 8, 2010

Public versus private wage rates

This chart looks at the distribution of wages across the private and public sectors by percentile. On the left hand side, we have the lowest paid ten percent along with their weekly salary. On the far right hand side, we have the highest 10 percent (denoted by the 90th percentile).

What does the chart tell us? It has a simple message; at every percentile except one, public sector workers are slightly better paid than their counterparts in the private sector. The only exception is the highest paid workers, where the private sector pays the highest rates.

A couple of warnings here.  First, we aren't comparing similar occupations.  The lower end of the public sector might cover highly trained graduates, whereas the private sector could include highly competent management trainees at McDonalds.  Second, the private sector is signficantly larger and more heterogeneous than the public sector, despite New Labour's best efforts. 

Still, the chart tells us something.

(data source: ONS)

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