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Public sector average wages are €300 per week higher than private sector

The average public sector wage is just short of €920 per week – but experts say that could be skewed.

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THE AVERAGE WEEKLY wage in the public sector is €918.86, almost €300 higher than the average private sector worker.

Latest statistics from the CSO show that the gap between earnings in the two segments is growing, with public sector workers adding an average of €15.88, or 1.8%, in weekly wages compared to the end of the first quarter this year.

This is in opposition to the picture in the private sector, where workers have on average €8.53 less in their pockets than at the end of the first quarter, a reduction of 1.4%.

Full picture

Despite the contrast, economists warned that the average pay levels do not give a full picture of the reality of the wage situation in Ireland.

Davy economist David McNamara said that the increase in public sector wages is “not surprising” given the volatility shown in the index, which often jumps up and down compared to previous quarters, and could be revised at a later date.

Private sector pay levels often lag behind the rate of economic expansion in the midst of a recovery after a deep recession, McNamara warned.

PrivatePublic Wages in the private and public sectors. Source: Davy Research

“It’s not surprising to see weak wage growth in the early stages of a recovery. The same is true in the UK where wages have been declining in real terms since 2008, even as unemployment falls rapidly.”

With our unemployment rate still very high, it’s not surprising to see wage growth remaining weak.

Disparity

Ibec chief economist Fergal O’Brien warned that the average pay level in the public sector could be skewed by the presence of well-paid officials at the top, while recruitment may have languished at the bottom rungs of the pay ladder.

Similarly in the private sector, higher average wages could be sustained by ‘last in, first out’ policies, which often preserve the higher wages of more senior staff at the expense of lower-paid new hires, he said.

He warned, however, that the increment system of pre-ordained pay increases in the public sector was cancelling out wage reductions delivered in recent years.

“While we’ve had some cuts, we’ve also had increments, so the impact of pay cuts has been returned in the form of increments.”

He said that the disparity between public and private pay levels could partially be explained by differences in the skills, education and job types demanded by the two segments, but said that high public sector wages still had to be tackled.

Even adjusted for education, skills and experience, we have a significant pay premium in the public sector, and that’s an issue that has to be part of the post-crisis discussion.

On an annual basis, both the private and public sectors are out of pocket, with losses of €9.15 in the public sector this time outstripping the private, where wages have come down by €1.79 compared to this time last year.

Overall, national earnings figures show that across all sectors of the economy, wages have come down while working hours have gone up.

The national weekly wage average is €688.15, down from €695.53 a year ago, and €692.43 at the end of the first quarter.

Working hours have increased marginally, with the average week now consisting of 31.8 hours, compared to 31.3 at the end of Q1 and 31.6 this time last year.

Who’s best paid?

On a weekly basis, members of the Garda Siochana are the best remunerated public-sector workers in the state on average.

PubSectorEarnings Source: CSO

Wages for the Gardai climbed by just under €9 per week to €1,236 during the second three months of the year, although they are marginally lower (0.1%) than last year.

The lowest paid branch of the public sector was the other arm of the security services, with members of the defence forces pulling down €812.16 per week, down €25.57 on the same period last year.

In the private sector, big gains for workers in the information and communication sector, which includes tech. Weekly earnings in these jobs are around €1,024, knocking those in financial, insurance and real estate industries off the top earnings spot.

The lowest paid workers in the private sector were those in the arts, entertainment and recreation trades, where wages were just €474.13 per week in the second quarter.

The recovery in the building trade was evident in earnings figures, where the average weekly wage is construction was €739.96 up €41.17 in the quarter and climbing 6% in the year.

Read: ‘We should not fear increases in the minimum wage.’ – Joan Burton links recovery with wages>

Read: ‘Now is not the time for wage rises’ – ISME>

About the author:

Jack Horgan-Jones

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