Inequality in the public sector grows and may even surpass the private sector

Public sector pay has a wide disparity, even among people with the same level of education. Some of these differences are linked to factors such as gender, level of government, power and type of career, according to studies carried out by experts in the field.

If only income from work in the formal market is considered, inequality in the public sphere has increased and exceeds that observed in the private sector.

Inequality in the public sector is second only to the private sector when informality and other types of income are taken into account.

Currently, several careers protest against the decision of the federal government to give readjustments only to police officers, who have already had salary gains in recent years.

A reference work on public service is the Atlas of the Brazilian State, prepared by IPEA (Institute of Applied Economic Research). Among the data is the separation of earnings by deciles, which divide the total earnings into ten classes with the same number of employment relationships.

In virtually all age brackets, salaries are highest at the federal level, followed by states and then municipalities. They are also higher in the Judiciary than in the Legislature, which in turn are higher than in the Executive.

In relation to inequality, the picture is different. The ratio between the first and last deciles indicates that the biggest differences are in the remunerations in the state and federal legislatures. Then in the federal executive. In the Judiciary, on the other hand, inequality is lower, as even basic salaries are high.

The ninth decile of the state legislature, for example, has remuneration 18 times higher than the first decile. In the federal legislature, there are 16 times. In the Federal Executive, 14 times. In municipalities, considering Legislative and Executive, the difference is 5 times.

The Ipea Atlas also allows for higher salaries to be seen for the same level of education among men than among women, in practically all Powers and spheres of government, as highlighted by researcher Félix Lopez, one of those responsible for the publication.

These differences are confirmed by studies that use other metrics, such as the Gini index, Lorenz curve and salary premium.

According to a study by the CLP (Centre for Public Leadership), the inequality between pay in the public sector exceeds that observed in formal work income in the private sector in all regions of Brazil, considering data from Rais (Annual Social Information Report) 2018, for civilians and military.

The Gini index (a way of measuring inequality) is around 0.50 in all regions of the country in the public sector. In the private sector, it is around 0.40 in the Southeast and around 0.35 in the other states. The closer to zero, the lower the inequality in formal labor income.

Daniel Duque, manager of technical intelligence at the CLP, says that Gini is little affected by the rare high-income workers in the private sector who receive these amounts in the formal contract. In addition, the exclusion of the informal makes inequality smaller.

He says that other studies show that, until the 1990s, the public sector pulled income inequality down. Readjustments granted to categories already with high salaries in the first decade of the 2000s, at the federal and state levels, changed this trend.

“This meant that the public sector was pulling inequality up. Mainly because of categories that were already in a privileged position in terms of salary”, says Duque.

“The only one that was more stable in terms of inequality and contrast with the private sector was the municipal level, where there are many servers who work at the end, such as teachers and primary care doctors.”

A study still being prepared by Ipea, on the other hand, shows that the Gini in the public sector is below the national average when considering other sources of income besides work and also informality.

According to José Teles Mendes, a researcher at the Department of Sociology at USP who contributed to the project together with Ipea, even the highest Gini in the public sector, which is the state, is reasonably lower than the total income of the Brazilian population.

Another study by the institution (“Heterogeneity of the public-private wage gap”, 2020) compares the wage premium between the public and private sectors, in the period 2012-2018, and also within the civil service.

Among civil servants with higher education, for example, the premium in relation to the private sector is 103% at the federal level, 55% at the state and 16% at the municipal level. For elementary school, the numbers are close (101%, 49% and 17%). For secondary education, the difference is slightly smaller, but still relevant, at 101%, 64% and 23%. That is, the awards are more related to the level of government than to education.

The study also shows that the premium has grown significantly since 2012 for people with tertiary and secondary education, but has remained stable at the elementary level.

Among mid-level professionals, the highest salary awards are concentrated in legal careers, tax administration agents, police inspectors, detectives and police officers. On the other hand, it is quite low among mid-level health professionals.

At the tertiary level, the award is 86% for legal professionals, 37% for science and engineering, and 21% for social and cultural sciences. Doctors have a 30% premium, while the remuneration of other health professionals is below the private sector. The advantage is 46% for high school teachers, 34% for university students and 18% for other teaching professionals.

“There is a salary premium for being a man, a premium for being in the Judiciary, a premium for being at the federal level”, says José Teles Mendes, responsible for several analyzes of data from the State Atlas.

“When you control this issue of schooling, you still find differences that are not explained by meritocratic issues.”

Economist José Celso Cardoso Jr., president of the Ipea employees’ association and responsible for studies on remuneration in the public sector, says that there is a very large disparity between the income of some careers at the federal level and in small municipalities in the North and Northeast, which which helps to explain the inequality pointed out in these works.

He also cites distortions such as remunerations above the constitutional ceiling and the accumulation of salaries, for example, by high-ranking military personnel who are paid for functions in civilian positions.

According to Cardoso, there has been an increase in schooling at the municipal level in recent decades, but this has not been proportionally reflected in salaries, which continue to be guided by political-institutional issues, fiscal capacity and people management policy.

“The disparity at the municipal level is huge. [escolaridade]”, he says. “Most municipalities do not have a structured career. There is a lot of precariousness in work relationships. People think it’s an island of the privileged, but heterogeneity and inequality are still the rules in Brazil today.”