Graduates profit from public sector - graduate jobs

Graduates entering the public sector are enjoying bigger pay rises than those joining private firms, according to a new report.

Despite the Government's pledge to curb public sector pay in times of austerity, a study by the think-tank Policy Exchange said the the gap between public and private sector pay is increasing..

In Scotland, the North East, the North West and Wales, the average public sector worker can expect to be paid 20% more than the typical private sector worker, said the report.

Policy Exchange said the public sector "premium" - the additional pay a public sector employee can expect to receive compared to a worker at a private firm - now stands at 35% calculated on hourly pay.

The only group where private sector pay exceeds public sector is the top 10% of earners.

The study said that 2009 was the first year in which average pay for public sector workers was on average higher than for all private sector workers. The pay gap has continued to increase up to December 2010 in spite of pay freezes, the report said.

Policy Exchange director Neil O'Brien said: "Public sector pay has got hugely out of control. There is pressure on budgets like never before because of the deficit. If the unions want to preserve their members' jobs they have to realise that pay is an issue which will have to be looked at."

TUC general secretary Brendan Barber commented: "This is just another attempt by a right-wing think-tank to stir up divisions between workers in the private and public sectors."