Average wages in the public and private sectors have gradually come close in recent years, with the average value in the private sector increasing by 14% over a decade (compared to only 5.5% in the public sector), the government said. Bank of Portugal yesterday.
But the benefit and salary premium is still on the side of public jobs, despite the cuts and freezes of recent years, particularly those of the troika and the PSD-CDS government, measures that account for much of the slow progress of the respective salaries, one of the most rigid components of government spending.
As mentioned, these values come from a new study by the Bank of Portugal (BdP) based on microdata from the survey on income and living conditions in the European Union, conducted by Eurostat, focusing on the period 2008-09 and 2018-19 .
The study, an update to the most recent economic bulletin, shows that austerity and freezes were in place since the major financial crisis of 2008 and into 2019 (that is, about a decade), along with other pressures on wages, such as wage regulation. Stability law. Pact led to a significant slowdown in government wage growth, especially when compared to the realities of the private sector.
According to the central bank headed by Mário Centeno, there was pressure on the average wage premium in the public sector in the decade under review for precisely this reason.
The salary advantage of those working in the public sector (compared to private sector values) declined by 11% in the decade ending 2019. According to the BdP, the salary premium continues to give an advantage over the average salary of public employment: in In 2008 and 2009, before the 2011 bankruptcy and the troika’s adjustment program (which lasted until mid-2014), civil servants earned an average of €587 more per month than their private counterparts in 2008 and 2009.
But this benefit diminished in the decade ending in 2019. This is because between 2008-09 and 2018-19 government wages only increased by 5.5% (more 92 euros, for an average of 1778 euros), while in the private sector, the recovery was four times stronger – they rose by 14%, plus 154 euros per month, and amounted to an average of 1253 euros, according to BdP calculations.
But there are nuances and important explanations behind these numbers.
Starting graduates are left behind
“The public sector remains advantageous in terms of wages [face ao setor privado]”Certainly for graduates with experience, but no longer attractive at the start of their career,” says the Bank.
The results of the BdP analysis “show that the public sector continues to offer graduates a significant salary advantage, with the exception of those at the beginning of their careers”.
The results “also suggest that public sector wage practices reduce wage inequality relative to the private sector,” the BdP says.
However, it concludes that “there is no premium for early career graduates (with five years of experience) along the salary distribution”.
The BdP study also finds that average salaries are higher in the public sector because the share of graduates is much higher than in the private sector.
But the central bank recalls that “from 2007/2008, the performance appraisal system and careers were revised, with the introduction of the single salary scale” and that “the need to reduce government spending during the Economic Assistance Program and Finance (PAEF) led to the adoption of measures, including temporary salary cuts and career breaks with lasting consequences”.
National public prize above the euro average
Compared to other countries in the Eurozone, the Portuguese public sector remains one of the sectors offering the highest salary premium compared to, for example, the private sector. In this ranking it is above the European average.
“The wage premium in the Portuguese public sector is about 11% in the most recent period, after falling by 3 percentage points (pp) since 2008-09,” says the BdP.
“An analysis by gender leads to the conclusion that the premium for men and women is comparable”, but that the average premium at the Eurozone level is “lower, despite the composition and size of the public sector differing from country to country “.
“The premium in Portugal approaches the Eurozone average and is even higher at around 6 percentage points”, and “only in the case of France and Finland is the premium negative (favorable to the private sector)”.
“In other countries, the premium is positive, or zero in the case of Austria, and in some cases higher than estimated for Portugal,” the same study adds.
Considering the public administration (but excluding the education sector), “there are higher premiums in Portugal”.
Here, “the price [face à referência do setor privado] is 20% in the most recent period, 11 pp above the euro average,” the BdP analysis said.
Source: DN
