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Public or private sector workers - who actually came out worse in the recession?

New figures shine a light on the pay gap after the swingeing cuts of 2010.

Image: Mark Stedman/Photocall Ireland

SWINGEING PAY CUTS brought in during the financial crisis closed the gap in wages between the public and private sectors - but still left government employees better off than the rest of the workforce.

A new analysis of the public-private pay gap, put out by the CSO today, said earnings differences between the two sectors shrank “across all estimates” between 2009 and 2010.

However public servants still enjoyed a slight pay premium on average, even after allowing for the pension levy.

Overall the difference in pay across all government and semi-state organisations was 1% in 2010, when the figures were weighted for analysis. That compared to a pay gap of 4.9% in 2009.

Without factoring in the pension levy, the pay gap was 7.4% in 2010 – down from 11.8% in 2009.

The CSO said its calculations allowed for the differences between the sectors and things like workers’ level of education and characteristics of their employers, like the sizes of organisations.

The biggest differences came for those in the bottom one-tenth on the pay scale, where public-sector workers got an extra 11.4%. Female public servants enjoyed a bigger over those in the private sector, on average, than among male workers.

But the analysis also showed that after the pay cuts were brought in for 2010, employees in the top pay brackets were earning significantly less than those on big salaries in the private sector.

The top one-tenth of earners were paid 9.5% less in the public service than those working for private companies.

Here’s how that looks going up the pay scales:

CSO Source: CSO

Calls for pay reversal

The CSO said the number-crunching had been done “in response to requests from a range of users” and was based only on permanent, full-time workers aged between 25 and 59.

Public sector unions have been calling for a reversal of major pay cuts introduced during the financial crisis.

The reductions, from 2010 onwards, hit hardest for those on the highest pay grades, with those earning over €200,000 taking a 15% hit to their earnings.

Public Sector Strikes Striking public service workers in 2009 Source: Sasko Lazarov/Photocall Ireland

People in the bottom pay bracket, those earning under €30,000, were handed a 5% pay cut at the time.

It was reported this weekend that public servants were in line for pay increases of at least 2%, to be signed off as early as July. The public sector pension levy, which currently averages 7.5% of workers’ salaries, has also been targeted for either reduction or abolition.

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About the author:

Peter Bodkin  / Editor, Fora

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