Criterios de valoración fase final

In our deliberations we adopt a broad definition of the public sector which covers all units (offices, other institutions, enterprises) in which the state holds majority ownership. However, a question arises as to how – compared with other sections and occupations –well- or badly-paid are the jobs that are strictly identified with public service provision. Due to the special nature of activities involved, it is difficult to compare wages in public administration (NACE section L) with wages in other sections. Some approximation of wage attractiveness of jobs in public administration can be derived from comparing wages in selected occupations with those in private financial intermediation (section J), in which the degree of competence and the nature of work are similar.

Table III.4.

Average gross wages and average weekly working time of employees with higher education in public administration and financial intermediation in X 2006

Profession

average wage in PLN average working time in hours public administration financial intermediation difference in % public administration financial intermediation difference in % IT specialists 3426 5755 -40.5 38.6 43.9 -11.9 Economists and management specialists 3607 4870 -25.9 39.6 41.5 -4.4

Lawyers 6008 6455 -6.9 40.2 I/S I/S

Mid-level

office clerks 2736 3843 -28.8 39.6 42.9 -7.8

Other office personnel otherwise

not classified 2526 2912 -13.2 38.4 I/S I/S

Public administration

specialists 3656 4870* -24.9 39.1 41.5* -5.9

Tax. customs and other similar clerks (excluding

customs officials) 3131 3843** -18.5 39.8 42.9** -7.2

* When comparing wages of public administration specialists, we have compared them with wages of economists and management specialists in financial intermediation. ** When comparing wages of tax clerks, we have compared them with wages of mid-level office clerks in financial intermediation.

Remarks: “I/S” – insufficient sample (less than 16 observations). Only private financial intermediation is taken into account. People performing the above-mentioned occupations (excluding public administration specialists and tax officials) accounted for 38 percent of all people working in public administration.

Source: Own calculations based on LFS and SES CSO.

The comparison of wages for occupations which are common in public administration as well as in financial intermediation shows that only lawyers (employed under permanent full-time contracts) are paid wages that are similar in both sections. Other workers are paid much less in public administration with the difference being largest in the case of IT specialists. Even when we take into consideration differences in working time, wages in public administration are approx. 20-30 percent lower than in private companies which operate in financial intermediation. It is difficult to establish whether the public sector offers good wages in professions that are typical for public administration, such as public administration specialists or tax and customs clerks, due to the lack of control group. For instance, wages earned by public administration specialists are – bearing in mind working time differences, approx. 20 percent lower that those earned by economists and management specialists (economists, financial and HR specialists, etc.) in financial intermediation. Similarly, tax clerks (excluding customs officers) earn on average approx. 10 percent less than mid-level office clerks in financial intermediation. It is hard to judge, however, whether the nature of work in the above-mentioned groups is similar. What should be borne in mind is that jobs in public administration provide greater job and pay stability than jobs in the private sector, which also adds to their attrac- tiveness. In general, it emerges from this study that wages earned by IT specialists, financiers and other specialists working in public administration are low which constitutes an obstacle in recruiting suitably qualified staff and which adversely affects the quality of services provided by this sector.

On the other hand, wages earned by people with at most secondary education qualifications are higher in public administration than in other sections. For example, monthly earnings of cleaners working in public administration are on average over 40 percent higher than those of people working in real estate and business management (section K) and approx. 30 percent higher than in industry. Caretakers in public administration earn 10 and 20 percent more, and porters and janitors – 60 and 30 percent more. Hence, public administration pays too much for work done by low-qualified people and relatively little for work provided by specialists.

Chart III.20.

Differences in wages between public and private sectors by section and education level in 2006

Remarks: Presented values show differences in average wages between the public and private sector as a percentage of wages in the private sector. Positive values indicate higher wages in the public sector, negative values – in the private sector. This analysis does not include administration which belongs entirely to the public sector.

Source: Own calculations based on SES by CSO.

Upon a closer look at the wage distribution of people with higher education employed in the public sector proves that the wage gap with respect to the private sector is negative in the lower quartile and relatively small (approx. 11 percent) with respect to the median wage, whereas it widens significantly when highest-paid workers are considered. The so-called “Salary Cap Act”20_{, which sets a limit on}

salaries paid to presidents of management boards in state companies21_{, greatly affects the approx. 50 percent difference in wages in}

the upper decile of employees in the public sector vis-à-vis the private sector.

To sum up, the wage structure in the public sector seems to diverge from market realities (which can be approximated by wages in the private sector). On the one hand the existing pay systems that favour lower-qualified workers hinder the outflow of workers to the private sector and provide one of the arguments against privatisation. On the other hand, however, lower wages offered to people with higher education qualifications limit work and management efficiency in the public sector and thus constitute an obstacle in the face of challenges that await Poland relating to the implementation of structural EU policies and spending of EU funds.

20 _{Act on remuneration of persons managing certain legal entities dated 3 March 2000.}

21 _{In accordance with the applicable law regulations, such salaries shall not exceed six times the average wage in the economy.}

-0,3 -0,2 -0,1 0 0,1 0,2 0,3 0,4 0,5 0,6 mining manufacturing water, gaz, energy construction retail trade hotels transport financial intermediation real estate management education healthcare

3.3. Gender

In international comparison (see Box III.6) the gap between wages of men and women in Poland is small. In 2006, monthly earnings of women (converted to full-time employment) were on average 18 percent lower than earnings of men. At the same time, differences in the median wage were much smaller and amounted to approx. 11 percent. This suggests that considerable wage differences be- tween men and women concern above all the upper part of the wage distribution. Indeed, as much as monthly wages of 10 percent of people with lowest earnings in both groups are comparable, differences in the upper decile of the distribution (i.e. for 10 percent of people with highest earnings) exceed 20 percent (see Chart III.21).

The situation is slightly different when it comes to comparing hourly wages of men and women. In this case disproportions (for full- time employees) are more than twice lower compared with monthly wages: in October 2006 they amounted to as little as 7.5 percent of the average wage and 6.6 percent of the median wage. It turns out, however, that this statistics is greatly distorted by wages paid to people working in education, whose hourly wages are relatively high due to shorter working time under full-time arrangements. Since more women are employed in this sector (they account for more than 74 percent of all employees), its inclusion in the calcula- tions largely reduces the wage gap between men and women. Similarly to monthly wages, an important (10-12 percent) gap in hourly wages can be observed for a majority of employees – including those with lower, average and higher earnings. This gap grows even wider for highest earners of the last decile, whereas its absence in the first decile is to some extent an artefact which results from the applicable legislation on the minimum wage.

Chart III.21.

Differences in wages of men and women along the wage distribution in 2006.

Source: Own calculations based on LFS and SES CSO.

It is worth adding that the significant differences in the upper decile of the wage distribution are largely a consequence of the fact that women are underrepresented when it comes to highest-paid managerial positions. In 2004, women accounted for slightly more than 20 percent of senior-level managers in large companies (employing more than 250 workers) and about one third in medium-size companies.

These differences in wages of men and women (taking into account their working time) may be due to different levels of education and human capital of these groups, differences in the observable characteristics which affect individual productivity (e.g. age, seniority) as well as in non-observable characteristics (e.g. motivation, effort), differences in workplace characteristics and “pure discrimination” – i.e. differences in wages of men and women with identical individual profiles and workplace characteristics.

It is hard to estimate the extent to which differences in wages of men and women result from their different characteristics and work- places and to what extent they reflect pure discrimination because only some differences in employee and workplace characteristics are observable22_{. The most commonly used method of decomposing the wage gap between men and women, which makes it pos-}

sible to single out the importance of differences in the observed characteristics that affect individual productivity, is the so-called Oaxaca-Blinder decomposition (Blau and Kahn 1996, OECD 2002). It starts off with estimating the wage equation for men and then the estimated coefficients are treated as a “market valuation” of particular characteristics and they act as a point of reference for coefficients from the equation estimated for women. By comparing them and by taking individual characteristics of women into account it is pos- sible to decompose the differences in wages into a component which is explained by different characteristics and an unexplained residual component.

22 _{For instance, Chevalier (2007) demonstrated that a large part of the analysed gap in wages of graduates in Great Britain may be explained by their choice of university courses and} occupations as well as by their professional motivation and aspirations. He showed that women tend to demonstrate altruistic attitudes more and they are less career-oriented, which are characteristics that are less valued by employers.

-10% 0% 10% 20% 30% 40% 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96