Public workers get long-service bonus despite pay freeze
Published 14/11/2010 | 05:00
Many public sector workers are still receiving annual pay rises through long-service increments -- despite the Government's pay freeze, according to a leading economist.
It's one of the reasons private sector workers have felt more financial pain than those in the public sector during the downturn, employers' group IBEC said.
Some elements within the public sector have claimed that their pay has plunged by up to 17 per cent in the last two years.
But if the lower-paid workers in the public sector have been scourged, then the private sector has been crucified.
A recent survey by Lansdowne Market Research showed that about 75 per cent of private sector workers have taken a real pay cut.
The actual scale of average earnings cuts in the public sector since 2008 is about 14 per cent.
The figure is based on the 7 per cent pension levy and direct pay cuts of between 5 and 15 per cent.
But despite those pay cuts and the "pay freeze" under the Croke Park agreement, tens of thousands of public servants are making up some of the shortfall by receiving wage increases via increments. "In the private sector if your pay is frozen or cut, it is frozen or cut. In the public sector it is different. Yes, they have had some cuts on one hand but they have also been given pay increases via increments. Not in all cases, but in a lot," said Fergal O'Brien, chief economist with IBEC.
This means gross salaries in the public service will continue to increase -- because the Government is allowing them to receive increased pay purely on the basis of time served in their jobs.
Some senior civil servants have been receiving average payments of some €2,400 in long-service payments.
Under public-sector pay scales, most of the 340,000 public servants move up the scale each year.
"If you actually look at the official numbers from the CSO on pay in the public and private sector, you have to be aware that they don't include the pensions issue.
"The 7 per cent levy on public service pensions is easy to calculate, but in the private sector it is difficult to quantify. Many tens of thousands of private sector workers don't have a pension.
"Tens of thousands more have had to increase their pension contributions or have seen a dramatic loss in the actual value of their pensions," Mr O'Brien said.
He added that latest figures show that the private sector wage per week is down by 4 per cent and the public sector is down 3 per cent this year -- excluding the issue of pensions.
Research carried out across the OECD showed that public sector pay in Ireland is in many sectors, including health and education, comparatively high.
Figures compiled by the National Competitiveness Council and Forfas show that this year, Irish nurses are paid the fourth-highest average salary (€48,000) in the OECD.
The top salary for teachers is 33 per cent higher than the OECD average and the starting salary for primary teachers is 15 per cent higher than the OECD average.