State workers overpaid - research

Last updated 13:15 06/08/2008

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Public servants earn more than private sector workers and have a "warm glow" from a belief that their work is useful to society, according to new research.

The research is by Waikato University's Management School, which argues public sector unions should not be pushing for pay increases before the Government changes because they are already being paid more.

"The average pay differential between the public and private sector was between 17 percent and 21 percent," said Professor John Gibson.

The research was published in the New Zealand Journal of Employment Relations and used the New Zealand component of the International Social Survey Programme Work Orientations Survey. It compared like-with-like work.

The study was based on 2005 data, so given the faster rate of public sector pay rises recently, the premium was likely to be even higher now.

"In addition, public sector workers appear to benefit much more from a `warm glow' belief that in their job they can help others and that their job is useful to society.

"In competitive labour markets people would be willing to work for less to feel so good about themselves and their jobs.

"So the fact that public sector workers actually get paid 20 percent more is evidence of how out of line wage setting has been in the public sector."

Because the study compared like with like, it appeared that higher pay levels in the public sector had little to do with needing to pay more to attract more skilled workers, Prof Gibson said.

He could find no justification for the pay premium in the public sector in terms of job conditions.

"Some job factors – like stress – may be worse in the public sector, but others – like the work not being physically demanding and not being viewed by the worker as boring – are better than for private sector workers.

Public workers on average had 1.3 years more education than private sector workers.

They were more likely to be female and more likely to live in Wellington.

They were less likely to do hard physical work and less able to work independently.

They were more likely to find their job stressful and more likely to find work interferes with family life.

- NZPA

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