At the moment we’re all suffering from the collective amnesia of a few years ago about the economy.  That it actually works in cycles.  It goes up.  It goes down.

As ex-UK prime minister Gordon Brown said on various occasions in various versions “There will be no return to boom and bust”.

The relationship between pay and conditions in the public and private sectors in the UK is pretty much the same.

At the moment all the talk is of the conditions public sector workers enjoy.  Fat cat senior managers.  Annual salary increases.  Generous pensions.  Longer holidays.  And so on and so on.

Of course in the present downturn of the economic cycle much of this is true if you just take a snap shot today.

But if you take a longer view the picture’s not so simple.

I remember many times when public sector pay and conditions have fallen way behind the private sector.  It is sometimes well nigh impossible to recruit and retain skills of all sorts – from teachers to nurses, quantity surveyors to social workers, police officers to soldiers.

Friends working in the private sector even urged you to get out and join them before you fell irredeemably and permanently behind.

And I remember another friend who worked for a major oil company saying “There’s hardly anyone around the place over 50, the pension scheme’s so generous.  You can retire on 60% of your salary after 30 years.”  Phew, I could have done with that when I worked in the public sector.

The truth of course is that like other aspects of the economy these things work in cycles.

It’s just that the cycles don’t move in the same direction at the same time.

  • Economy booms, private sector pay rates increase.  Public sector pay falls behind
  • To get and keep workers, public sector pay improves
  • Economy falters, private sector sheds workers (which it does much more easily than the public sector) and pegs pay rates
  • Public outrage at perceived higher public sector pay – economic downturn drives public sector pay down
  • Economy recovers…

And so on in a perpetual opposing dance.

As in so much else collective amnesia affects politicians, business people and the media.