Public sector employees paid better for less work

Public sector employees are better paid than their counterparts in the private sector, a study in the Bank of Greece’s latest Economic Bulletin, which appeared yesterday, shows. According to the study, men employed in the public sector earn, on the average, 34 percent more than men with comparable experience in the private sector. For women, the disparity is slightly larger (37 percent). The disparity in average wages is larger at lower levels, but remains great even at higher levels. For men, the disparity is 48 percent for entry-level wages and falls to 24 percent at high levels, always in favor of the public sector. For women, again, the disparity is somewhat greater; at the entry level, it reaches 50 percent. Preferences Under these circumstances, the study’s finding that people entering the labor market for the first time, or jobless seeking to re-enter it, have a strong preference for a public sector job. Before, it was the allure of guaranteed lifetime employment that did the trick; thus even calls for temporary or fixed-contract jobs have been vastly popular, because people are hoping to become full-time, permanent employees as part of some voter-friendly action by the government. They put pressure upon it by organizing and staging work stoppages and protests. This study now shows an added incentive for people to pursue employment in the public sector: money. A perverse result of the above is that the average time one stays unemployed has increased because people would rather wait a little more than take a job in the private sector. Union brawn One reason for this disparity of incomes, analysts reckon, is the far greater influence of unions in the public sectors. Both the civil service unions and those in public utilities have pushed for, and achieved, higher wages and working conditions far better than in the private sector. The irony is that while their productivity is lagging compared to that of private sector employees, most civil servants get productivity bonuses. This stems from a well-meaning attempt by the government to introduce productivity incentives, starting from the Ministry of Education. These were meant to be individual awards, but the unionists called a strike and obtained the awarding of a productivity bonus to everyone, regardless of performance. This spread to other ministries, as well. It is not a coincidence that public sector unions are influential with the government. Pro-Socialist unionists control most of the major unions and their leaders have secured top places in the ruling party hierarchy (that is, they have joined the Central Committee). Their power showed at the last congress of the ruling Socialists, in October 2001, where they obtained about 1.5 billion euros in wage increases, mostly in the form of bonuses. This would be impossible to obtain in the private sector.