Licensed workers who earn the least gross are penalized the most by private sector companies compared to the gross wages used in the public sector.
According to a National Institute of Statistics (INE) study released yesterday (Tuesday, May 23) to mark the institution’s 88th anniversary, graduates earning the least in the private sector receive wages 40% lower compared to the same groups (percentiles) that form the lower part of the distribution, ie those with the lowest salaries for the highly educated.
The reference year of this new database is 2021.
Thus, according to INE, the group of graduates who earn the least (percentile 10, i.e. the group of the 10% less well off) appears with an average salary of only 865 euros gross in the private sector, 41% less compared to the average salary of 10% of licensed public sector workers with the lowest incomes.
In the latter, the average salary is 1458 euros, which is 593 euros higher than in the private sector.
The same happens for groups (percentiles) of university graduates as they move up in the income distribution.
Graduates always earn about 40% less than their public sector counterparts up to the 40th percentile (the 40% earning the least), where the average private sector salary is only $1,501. Among the public, the average in this group is 2410 euros.
Then, from then on, as graduate salary levels rise, the premium for working in the public sector remains significant, but gradually becomes less expressive. (see infographic below).
For example, the 5% group of graduates who earn the most in the private sector (average salary of EUR 5,464 gross) now only has an income gap of 3% compared to the corresponding group in the public sector.
But in national terms, INE data proves that a private graduate loses on average more than 23% compared to civil service graduates.
This new study from INE analyzes the distribution of gross wages per employee in the public administration (PA) sector and in the private sector in Portugal.
The activities are based on “information from the Monthly Remuneration Statement that is sent by companies to the Tax and Customs Administration (AT) and is sent monthly to INE under protocol”.
According to INE, “the PA and private sector workers analyzed here correspond to individuals who worked exclusively in a single institutional sector”.
That is, the study focuses on 740.9 thousand civil servants and 3.799 million private employees, the institute says.
“TA data essentially corresponds to employees,” he adds.
The core indicator used is “the average gross monthly earnings per employee, which corresponds to the average value of the gross monthly earnings (ie before tax) received per employee and per year”.
Civil servants earn 684 euros more per month than private individuals
In addition, this employment statistic confirms many aspects that were already known, but now with more current data (2021).
For example, INE shows that civil servants earn significantly more (50% more) than employees in the private sector.
Part of the explanation lies in the fact that the most advanced qualifications are much more representative among the public, as explained by INE.
One can think of the example of doctors, nurses and teachers, who have a very high weight in the almost 741,000 civil servants of the institute.
“In 2021, the average monthly gross wage per employee was higher in the PA sector than in the private sector,” says INE.
The average salary in the public sector was around 2019 euros, 51% more (684 euros per month more) than in the private sector, where the national average gross salary was 1,335 euros.
“This result, as mentioned and among other factors, reflects differences in the type of work performed and the qualifications of the workers they integrate.”
“In fact, for example, it appears that employees in the PA sector have a higher level of education on average: 55.2% of employees in this sector had a higher education (22.7% in the private sector), 26.6% had a secondary or post-secondary education (32.4% in the private sector) and 18.3% had a level of education that corresponds at most to the 3rd cycle of primary education (44.9% in the private sector)”, INE describes.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
