Public/private sector wage gap is widening
Private workers earn on average €272 a week less
THE pay gap between public and private sector workers is widening – with private sector workers losing out by hundreds of euro a week.
Public sector workers earn an average of almost €947 a week, a rise of more than €26 a week on last year’s average pay of €920, or 2.9%.
But private sector pay is lagging way behind at €675 a week – €272, or a massive 40%, behind public-sector staff.
Average pay across both sectors is now nearly €735-a-week, up more than €19 from almost €717 a year ago, a 2.5% rise.
Neil McDonnell, of the small businesses’ group Isme, said: ‘Wages are up but the big issue for us is the public/private pay gap is still at 40-odd per cent. It’s persistent and it’s consistent. We said in our pre-Budget submission to close that gap to 10% by 2025, which wasn’t an ambitious target. The unions’ view on that is, “Well, that’s great – the private sector, just up your pay”.
‘But it’s just not possible to close that gap by 40% on the private-sector side, so we need a long period of pay stability in the public sector, it’s as simple as that... In our most recent business trends research, 38% of businesses will not increase pay this year. The reason for this is, quite simply, business can’t afford such increases.’
The official pay figures were released by the CSO yesterday which said of the fast rise in public sector pay: ‘Average earnings growth in the public sector can be partly attributed to wage restoration from April 2017.’
While private sector pay is lagging behind overall, some jobs’ pay-rates are storming ahead. IT workers saw average wages rise by 5% last year, by more than €50 from €1,048 to €1,100 a week.
Hotel and restaurant workers had the second largest wage increase at more than 4% from €335 to €350 – an extra €15. Professional, scientific and technical staff also saw a rise of more than 4% from €885 to €924.
But despite the fast-growing construction industry, wages have fallen. The construction sector showed the largest annual decrease of 0.9%, falling from €751-a-week to €744.
Siptu economist Marie Sherlock said of the CSO figures: ‘Annual wage growth of 2.5% is the strongest we’ve seen in a while.
She added: ‘It shows the public sector wage agreements are having a stronger impact on lower wage workers and secondly the collectively bargained wage agreements we’ve ventured into are beginning to percolate out across various sectors and that’s what we’ll be watching and observing closely over the coming months.’
Gardaí were the highest earners in the public sector with an average weekly wage of €1,289 but they also worked the longest hours at 44 a week.
The education sector recorded the highest average hourly earnings in the quarter of almost €40 but the lowest hours at 24.5 a week.
‘Strongest growth seen in a while’
ACCORDING to various comparative studies down through the years, public sector pay rates in Ireland are particularly high in relation to the private sector.
We have been told that the differential in other OECD countries is either narrower or, in some instances, even non-existent. Now it emerges that the income gap here is widening even further. New figures show that those working for the State saw their wages rise by an average of €26 to €947 last year. But the typical increase for those in private employment was just €15 to €675.
It goes without saying that this raises all sorts of issues. But perhaps the most important one is that public and civil servants’ pay is largely funded by the taxes levied on those working in the private sector.
For that very reason, this imbalance strongly suggests we are looking at a situation that is unsustainable in the long term. It is something that should be remembered by the Government, the Labour Court and all the relevant union leaders whenever the next demand for a public sector pay increase is made.