Wednesday, 15 July 2009

Public sector versus the financial sector; where are the big pay packets?

That sounds like a question with an obvious answer.

Over time, public sector wage growth compares favourably to the financial sector, so long as bonuses are excluded. Public sector wages are 44 percent higher today than ten years ago, while financial secto wages are up only 38 percent. However, once those bonuses are thrown into the pot, there is no contest.

Financial sector workers have become increasingly dependent on bonuses, with 2006 and 2007 being particularly generous years. Moreover, the financial crisis had only a limited impact on the size of bonuses. Although the pay-outs were lower than in recent years, they compare very favourably to bonuses paid in the early part of this decade.

The "bonus culture" seems to be alive and well.

1 comment:

powerman said...

It would be interesting to see growth in non-financial private sector earnings (incl. bonuses) on that graph, if possible.

It would be even more interesting to norm the graphs by the relative values of the pension packages attached to them (public final salary vs. what most of the private sector get).