Survey finds public sector pay rises lag behind private sector in European Union

Public sector pay trends were the focus of much debate in the years following the economic and financial crisis. In many cases, European institutions and national governments pushed for pay freezes and pay cuts as part of their strategy to clamp down on public spending. A major survey of public and private sector pay developments reveals the impact of those policies with a marked contrast between EU and non-EU states.

The analysis of trends in 44 countries carried out for EPSU by the Labour Research Department, the London-based trade union research organisation, is based on data from national statistics agencies and covers the period 2003-2017. The report breaks the countries down into five main categories:

• 10 states where there was similar pay growth in both the public and private sector before the crisis, but since then the public sector has fallen behind (eight EU states and two outside the EU);
• four states where public sector earnings were already growing more slowly than private sector earnings and the financial crisis made this worse (all in the EU);
• four states  with generally lower public sector pay growth with no clear link to the crisis (this may be because figures are not available for the whole period) (one in the EU and three outside);
• 11 states where there has been similar growth in both the public and private sectors (eight EU states and three states outside the EU); and
• 12 states where earnings have grown faster in the public than in the private sector (three states in the EU and nine outside.

There were a further three countries, all outside the EU, where there is no single figure for public sector earnings and the diverging results make the position unclear.

There have been some positive developments across the public services where trade unions have been able to negotiate inflation-plus pay increases. This year some of the major deals have been reached in Denmark, after a major dispute, Germany, Netherlands, Bulgaria, Czech Republic and most recently in Austria. Further progress has also been made in pay restoration in Ireland.

While public sector negotiations have been unfrozen in Italy and the pay cap removed in the UK, it is still a long and difficult process to negotiate pay rises. In Italy doctors, vets and health managers are the last group of public sector workers struggling for a new agreement while in Scotland local government workers have just rejected what they see as a pay offer that fails to address years of below-inflation pay rises. Public service unions in Portugal and France also have a major challenge to catch up on long periods of pay freezes or below-inflation increases.

All these pay developments can be followed in EPSU's regular collective bargaining newsletter.