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Private sector workers 4.5x worse off than public

The private sector has suffered job losses at 4.5 times the rate of the public sector since the COVID-19 lockdown measures were imposed in March, according to new research released today by free market think tank the Institute of Public Affairs.

“This is further evidence that there are two Australias: those who are sheltered from the negative impacts of the lockdown measures in the public sector and quasi-public institutions, and those exposed in the private, productive sectors of the economy,” said Daniel Wild, Director of Research at the IPA.

ABF media

“It is clear that we are not all in this together. There is no concept of shared sacrifice amongst the public sector workforce.”

“Not only are public sector workers better off than private sector workers, but it is those in the public sector who decide when those in the private sector are allowed to go back to work. This is a very worrying and serious moral hazard where those responsible for the lockdown measures do not suffer the consequences of those measures.”

“Governments must focus on boosting jobs and wages in the private sector, which means easing the lockdown measures faster than currently planned, cutting red and green tape, and making it easier for small businesses to employ new staff.”

ABF media

“While economic recovery has commenced in the public sector, however workers and businesses in the private sector continue to suffer as a result of exaggerated and unnecessary government lockdown measures.”

The report finds:

  • Over the past two months jobs in the public sector have decreased by 1.7 per cent, compared to a 7.7 per cent decrease the private sector. This means that the rate of job losses is 4.5 times higher in the private sector than in the public sector.
  • Over the past two months wages in the public sector have decreased by 2.6 per cent, compared to a 5.7 per cent decrease in the private sector. This means that wage decreases in the private sector were 2.2 times higher than wage decreases in the public sector.
  • The public sector recovery commenced in early April: Over the past month, public sector jobs have increased by 2.7 per cent compared with a 1.3 per cent decrease to jobs in the private sector jobs, while wages have increased by 3.7 per cent in the public sector but decreased by 2.2 per cent in the private sector.

Previous IPA research found that 74 per cent of Australians support a 20 per cent pay cut for politicians and senior public servants who are paid $150,000 or more. Download the report.

Written by Daniel Wild, Institute of Public Affairs
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