Join the IT crowd to earn big bucks (but surf classes won’t make you rich)
There’s a lot of cash sloshing around our economy, so how do we get our hands on it?
It may not feel like it but Ireland is officially the seventh richest country in the world. As a national economy we generate more than €60,000 a year for each man, woman and child in this country. Now, we know that’s a bit misleading. That extraordinary figure is for the economy as a whole – our gross domestic product.
But it still indicates that a hell of lot of cash is sloshing around. The problem for most of us is getting our hands on it.
Recent figures from the Central Statistics Office put the spotlight on just who is pocketing the most money here.
One of the best paid sectors is information technology, where the average pay was a tasty €1,095 a week in the first quarter of the year.
The wealthiest Irish techies are the Collison brothers, Patrick, 28, and John, 26, who were raised in the Limerick countryside, where their parents ran a lakeside hotel.
Now they are both billionaires – and one of them, John is the youngest self-made billionaire on the planet. All they had to do was change the way we pay for goods and services with their Stripe payments platform.
But you don’t have to change the world to do well.
The highest average weekly wage is €1,162.16 – in the financial, insurance and estate agent sector.
While surfing the web might pay, surfing the waves certainly doesn’t. If you envy surf instructors their ‘cool’ jobs, you’ll be glad to hear how little they get paid. The same goes for entertainment and the arts.
Average weekly pay across all three sectors in our island of saints, scholars and salty leisure industry instructors is a paltry €471.
While you might get a Céad Míle Fáilte in the hotel business, you won’t earn céad míle euros.
The lowest average weekly earnings were €326.90 in the accommodation and food services sector.
At the other end of the pay scale, US-based firms gave their staff €59,836 a year. The next best-paying employer was the State, with average pay working out at €54,000, according to the Department of Public Expenditure and Reform.
If you’re set on earning the big bucks you could always work for a semi-state where pay levels are, well, on a whole new level. Better
still, if you don’t get your pay increases you can hold the country to ransom – as ESB workers did during the financial crisis.
They did it again last year, bumping up their pay by 5.5% over 2.5 years. Yet they were already among the highest paid workers anywhere, with average earnings of €72k a year after overtime and expenses. And RTÉ weren’t far behind, with staff at the national broadcaster on €67,000 a year.
Surprisingly, both semistates outdo the Central Bank, which paid out an average €61,020 per employee last year.
The big pay-off for working in the State sector is your pension. Gardaí get a €100k lump sum on retirement, plus an annual pension of €34,000, a new report by the Association of Pension Trustees of Ireland revealed this week.
That won’t enable them to retire to the Bahamas but it’s a valuable pension pot – if only because low interest rates have made it very hard for most private sector workers to accrue anything like it. A guard’s pension is conservatively valued at €1.8m. A retirement income like it would cost a private sector worker €1,900 gross a month for 28 years to accumulate.
Teachers, too, can retire at 62 with pensions worth up to €1.2m. And they are in the ha’penny place compared to some colleagues in the Dáil and civil service (see table). Of course, those figures assume we can afford to pay those pensions long into the future and some economists think we can’t.
So what can we learn from all of this?
The big-money jobs are in the multinationals – or the IT and professional services sectors that work for them. Then again, you could just start your own multinational like the Collison brothers!
Failing that, the State is the next best employer.
Alas, for most of us, that advice is a bit like the American tourists asking the way to Killarney and being told: “If I were you I wouldn’t start from here!”
But many people still have time to steer their careers in a more lucrative direction – or advise younger family members to choose wisely.
So, how did Ireland become so ‘rich’?
The country pulled off the tax stroke of the century by allowing multinationals such as Apple and Google – which make hundreds of billions in profits around the world – to route this massive wealth through our island.
The money doesn’t stay here; most of it goes off somewhere else, such as the Cayman Islands.
Essentially, we help the richest companies in the world to avoid paying tax to even the poorest countries (as was highlighted by the €13bn tax settlement Apple was ordered to pay by the EU).
In return for our help, the multinationals throw a few jobs and dollars our way – like an absentee landlord used to throw a few sacks of corn to the overseer who helped him extract as much profit as possible from peasants.
Like the overseer, we grovel, don’t rock the boat, tug our forelocks and say: “Thank you very much, sir!”
In the context of their awesome global business models, the few sacks of corn don’t cost the multinationals much. But because we’re such a small country, it’s worth a lot to us because the jobs they create are well paid and generate a decent tax return for the State.
One in five people here works for a multinational – and the same number again works for the State. Both of these cohorts do very well from our tax-avoidance-based economy.
Much less well off are the other 60% – the poor hardworking shmucks in the Irish-owned private sector.
Average weekly private sector pay went up by 1.5% in the year to March. But it’s still only €669 a week or €34,778 a year.
That’s average pay, mind, not low pay, yet it’s not enough to buy a home – or even feed a family!
Yet these guys are still taxed to the hilt considering their income, each coughing up more than three grand in tax every year.
They weren’t given much hope of salvation this week as the EU recommended keeping the USC in place – and our new Finance Minister Paschal Donohoe seems to be moving further away from Fine Gael’s promise to eliminate it.
When he took his first Q&A session in his new role, he signalled that FG will squirm its way out of its USC promise in the most obvious yet underhand way yet – by merging it with PRSI, which presumably will shoot up as a result.
Paschal better come up with some decent tax breaks in the October budget to make up for that one!