William Eichler 23 December 2020

Local government workers impacted by pay freeze already facing ‘pay penalty’

Local government workers impacted by pay freeze already facing ‘pay penalty’ image

Public sector workers affected by the pay freeze next year already face a pay penalty compared to private sector staff in similar roles, think tank says.

The Resolution Foundation has examined the pay of the 2.6 million public sector workers subject to the coming one-year pay freeze, along with the 2.9 million who are exempt.

The report finds that public sector workers affected by the pay freeze coming into effect next year – such as those in local government and education – already face a 7.9% pay penalty compared to private sector workers in similar roles.

‘The Government has justified the coming public sector pay freeze on the basis of the pay premium these workers will experience as a result of the pandemic. But this is a very poor description of the impact of the policy – with the freeze largely falling on those already experiencing pay penalties relative to the private sector,’ said Hannah Slaughter, economist at the Resolution Foundation.

‘Going forward, ministers must be mindful that while public and private sector pay do move in line with each other over the longer term, there are risks in making that adjustment next April when the economic challenges of the pandemic will still be immense, and consumer confidence needs supporting.’

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