Pay gap figures will add to nurses’ and teachers’ determination to strike

No doubt nurses and teachers will be even more determined to strike later this week when they see how the pay gap between the public and private sectors persists in the latest official figures.

The Office for National Statistics said private sector pay increased by 7.2%, before adjusting for inflation, while the equivalent figure for the public sector was a meagre rise of 3.3% in the three months to the end of November.

With inflation running at 10.7% in the penultimate month of the year, it is not difficult to see why so many nurses and teachers have found themselves struggling to pay food and energy bills, while an increasing number queue at a food bank.

Not that private sector workers should consider themselves lucky when their pay relative to inflation is also falling. The 7.2% average increase for the sector also disguises pay disparities between professions, with those working in finance and business services such as accountancy, management consultancy and commercial law averaging 7.6%.

Across manufacturing and construction, where a shortage of workers is supposed to be boosting wages for new starters, pay growth fell well short of the consumer prices index (CPI) at 5.4% and 6.3% respectively.

Poverty used to be largely restricted to those without a job. In the two decades before the 2008 financial crisis, wages consistently outpaced inflation, improving living standards.

In the decade since George Osborne and David Cameron’s austerity measures began to take effect, a 21st-century version of the Victorian working poor has emerged, especially in the public sector.

When Citizens Advice says about 3.2 million people last year ran out of credit on their prepayment gas and electricity meters at some point because of a lack of funds, and demand for food banks is growing rapidly, we know austerity is not just about putting off fixing broken windows in schools and hospitals; it has long-term consequences for families and their ability to cope with a shock to their finances.

Danni Hewson, a financial analyst at the stockbroker AJ Bell, made the point that a 3.9% pay gap between the public and private sectors is only going to make recruitment of teachers and nurses harder. It will also increase the incentive for experienced staff to depart in favour of better-paid jobs.

The turnover among teaching staff is already at disturbingly high levels; any higher and the average age of the whole of the profession won’t be much above the children they teach.

Some Tory ministers are said to want to face down striking workers while others want to put more money on the table and agree a deal.

If the cabinet voices in favour of facing down the unions get their way, it will be a long and difficult spring.

The CPI rose by 9% in the year to April 2022 and there is every prospect it will have risen by another 9% when April 2023 is upon us. The compounding effect of successive years of high inflation will be difficult for unions and their members to accept unless ministers go further in closing the gap with private sector pay.