Workers in public sector reap €1.2bn in salary increases
Calls to cut length-of-service hikes as €2,400 paid to top earners benefiting from incremental pay rises
Published 27/11/2011 | 05:00
PUBLIC-SECTOR workers have received more than €1.2bn in incremental pay increases since Ireland's worst-ever recession began in 2007, despite the dire state of the public finances.
Figures from the Department of Finance show that although the country has had to borrow roughly €20bn a year to run the State since 2008, length-of-service pay increases have continued across all departments, agencies and organisations in the public sector.
Staff are still seeing their gross salaries increase because the Government is allowing them to receive increased pay purely on the basis of time served.
Ireland should consider cutting public sector wages -- even if it means breaking the Croke Park deal -- to reflect falling private sector incomes, the head of the employment division of the Organisation of Economic Co-operation and Development (OECD) has said.
"At a time when private sector wages are adjusting rapidly it would be prudent to also put into the hopper public sector wages and working conditions," John Martin said.
"If the [Croke Park] agreement constrains the ability of the Government to make some changes in that regard, I think our view would be there should be a bit more flexibility," he said.
The public sector pay bill in 2010 was €15.1bn, and official figures show that state employees earn one-third more than their private sector counterparts.
According to a new Central Statistics Office report on wages, weekly earnings in the public sector rose from a three-year low of €882 a week in the first quarter of 2010 to €913 in the final quarter. In contrast, in the final quarter of 2010, weekly earnings in the private sector were almost a third lower at €625.
Ireland's public sector pay structure is substantially higher than most other European countries and, on average, one-third higher than public sector workers in Britain. Latest comparable figures show that average British public service weekly earnings were €634 compared with the €913 paid to state employees here.
Some civil servants at the top of their respective pay scales are getting wage rises of €2,400 for long service. The previous government shied away from further angering public sector workers already reeling from pension and income levy increases.
A sample survey across a range of departments shows an average payout of €2,345 for the civil servants entitled to the long-service payments. The pay scales in the public sector see most workers go up the scale each year, meaning their gross salary increases on an annual basis.
A spokeswoman from the Department of Finance explained: "Suspending increments would have an uneven impact and would disproportionately affect lower-paid staff. Higher-paid public service grades have, in general, significantly shorter incremental scales than lower-paid staff and, consequently, more of them are at the maximum of scales. Some higher-paid grades do not have incremental scales at all and their salaries are single points."
The cost of increments is set to fall as numbers in the public service fall. Thirty-seven per cent of civil servants are eligible for an annual increment this year, however this excludes long-service increments which are applicable in some cases after three or six years.
Of that, 53 per cent are at clerical officer grade or lower, who are paid between €22,015 on a scale up to a maximum of €38,135 over 14 years.
Before entering office, several Fine Gael ministers, including Leo Varadkar and Richard Bruton, called on the incremental pay increases to be frozen as long as the country remains in recession.
Given the arrival of the IMF last November and the change of government, Public Expenditure and Reform Minister Brendan Howlin is set to come under significant pressure to end the practice as part of any reform process. The Department of Finance said €250m was spent on salary increments in the public sector last year.