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Public sector wage freeze to widen pay penalty

The chancellor’s decision will reportedly target the wrong group, as it is based off outdated trends

Public sector workers who are set to be affected by next year’s pay freeze already face a 7.9% pay penalty compared to their private sector counterparts, according to a report conducted by think-tank Resolution Foundation.

The research has found that the freeze, introduced by Rishi Sunak, will impact those who already face pay penalties as a result of austerity measures and the global pandemic.

The foundation has claimed that rather than bringing the public and private sectors together, the chancellor’s decision will negatively stunt wages for the 2.6 million public sector workers who are set to be impacted.

Hannah Slaughter, economist at the foundation, said: “Public sector workers have traditionally enjoyed a pay premium over private sector workers, though a decade of pay freezes and caps after the financial crisis had reduced that premium to zero overall.

“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.”

Meanwhile, those in the public sector who will not be affected by the freeze already enjoy a 6.7% pay premium over private sector workers, further highlighting the “pay turmoil” that has shifted traditional wage trends.

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