Irish News

Monday 14 July 2014

We have EU's sixth highest level of pay inequality

Martin Frawley

Published 11/11/2013|02:00

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IRELAND now has the sixth highest level of income inequality in the EU and the gap between the highest and lowest income earners is growing, according to a new EU study.

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The study by Dublin-based Eurofound social and employment research agency found that only Latvia, Bulgaria, Portugal, Spain and Greece have a higher rate of income inequality than Ireland.

In 2005, the gap between the highest and lowest income earners was measured by the Eurofound study at 0.32, placing Ireland in 10th place among the 27 EU member states and ahead of the UK and Italy.

However, by 2011, income inequality in Ireland rose to 0.33, pushing us up the table as the likes of the UK and Italy and many eastern European countries managed to narrow the income gap.

The average rate of income inequality among the 27 EU members states is 0.31 and, the report notes, has remained stable since 2005.

But as we prepare to exit the bailout next month, the report warns Ireland is among a group of five countries where income inequality is increasing.

"Countries to watch are Bulgaria, Romania, Spain, Ireland and perhaps France – all showing above-EU average income inequalities in 2011, as well as a tendency towards growing inequalities over these six years," it said.

SIPTU president Jack O'Connor said he was not surprised by the report's findings given the one-sided austerity approach adopted by the Government.

"Since the collapse in 2008 the burden has been borne disproportionately by working people and those dependent on public services," said Mr O'Connor.

The better-off are not making the appropriate contribution, because Fine Gael has a contract with the rich that they won't have to pay a wealth tax, said the SIPTU president.

"So you will have income inequality and, of course, it's getting worse," he said.

Mr O'Connor said unions would now push for pay rises in the private sector as a way to boost economic growth and get us out of the recession.

Take-home pay across the private sector has fallen by 6pc since the recession began in 2008, and it was worse in the public sector, he said.

The SIPTU president said he would be proposing such a pay campaign at ICTU next week.

Irish Independent

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