Public sector workers have higher wages than their private sector counterparts despite a decade of austerity, IFS finds  

Public sector workers are still being paid hundreds of pounds a year more than their private sector counterparts despite nearly a decade of austerity, analysis shows.

Even after years of pay cuts following the 2008 financial crisis, public sector staff still have higher salaries than private sector workers with the  same education and experience, a report by the Institute for Fiscal Studies reveals today.

Protesting against the cuts doctors and teachers, under the impression they were getting a raw deal, launched a series of strikes designed to disrupt public services and protect their pay. 

But in reality they have enjoyed salaries between 3 and 6 per cent higher than their private sector equivalents over the past ten years, the report said. 

In addition they also receive guaranteed pensions which are vastly more generous than those on offer for most private sector workers.

Last night Peter Bone, a Conservative MP, said that the finding should make public sector workers think twice before taking industrial action in the near future.

He told the Daily Telegraph: "People will be surprised at this finding and it brings into question whether public sector workers should be striking. They should be thinking 'hang on a minute we're on more money than people in the private sector', which means they need to think even more about not going on strike."  

Back in 2013 the IFS said that "average real hourly wages" had fallen faster in the private sector than the public sector in the wake of the recession.

In 2009 the average public-sector worker earned about £16.60 per hour, dropping to around £15.80 in 2011, it said.  Meanwhile, hourly pay for private-sector workers in 2009 was just over £15.10 and dropped to about £13.60 in 2011.

At present the Office for Budget Responsibility expects public sector earnings to fall by 5 percentage points relative to private sector earnings over the next three years. This would take the public / private sector earnings gap to well below any level seen in the past two decades.

In 2019 private sector wages will finally overtake those in the public sector, the IFS predicts. 

Austerity measures in the public sector had not been enough to significantly deterred bright graduates from pursuing careers there, it added.

However it warned that as the gap closed there may come a "tipping point" where fewer quality job applicants decide to enter the public sector because they are put off by the lower pay.

The report warned: "In the future, if public sector pay continues to be squeezed and private sector earnings growth returns to more normal levels, then public sector pay could start to fall quite substantially relative to the private sector. One would expect this to have a larger effect on the sorts of people going into public sector jobs."

However the IFS noted that non-pay factors have a larger effect on decisions to join one of occupations such as being a doctor, teacher or police officer, such as motivation, workload or employment benefits.

Luke Sibieta, economist at the IFS and author of the report, said: "Once fewer bright graduates decide to work in the public sector the quality of services could start deteriorating. Pay is particularly important to today's young people as house prices and the cost of living are so much higher than they used to be."