Private sector wages fall 5pc as pay gap widens
Wednesday December 23 2009
PRIVATE sector workers saw their pay fall by 3pc in the first six months of the year as public employees saw their earnings rise by 1.3pc, new figures reveal.
However, the Central Statistics Office estimated that the actual level of wage cuts for private sector workers could be as much as 4pc to 5pc.
And public servants will share the pain in the new year thanks to cuts of between 5 and 15pc in their pay announced in this month's Budget.
New CSO figures tell a tale of two sectors in a survey which for the first time attempts to compare fortunes across all sectors of the economy.
They show the number of people working in the private sector is down almost 8pc compared with a 0.5pc drop in public sector employment.
The total number of people working has fallen from 1,775,900 in the second quarter of 2008 to 1,666,500 in the same period of 2009, a drop of almost 110,000 or 6pc.
The number of people working in the private sector fell from 1.355 million in 2008 to 1.248 million in 2009, while the numbers in the public sector fell from 420,600 to 418,300.
Construction was the worst hit sector with almost 20pc fewer workers, while the number of people working in administration and support fell by almost 14pc.
By contrast the number of people working in education rose by 1pc and in health and social care it rose by 2.2pc.
Job losses have been concentrated among low-paid workers in building and retailing, CSO officials said. That has the effect of increasing average earnings in the private sector, as low-paid workers leave, even if actual pay rates have not increased.
Bonuses
Bankers and estate agents saw their pay fall by 13.3pc, which the CSO noted was almost entirely due to a two-thirds fall in the value of bonuses paid this year.
Average earnings in the public service rose from €931 per week in 2008 to €943 per week this year, whereas private sector workers saw a drop from €637 to €617, although it should be noted that some of the differential is down to public servants being more highly qualified.
However, while average weekly earnings fell, a lot of this was because many workers had their hours cut. Their hourly rate of pay actually increased slightly from €21.51 per hour to €21.90. People now work an average of 31.9 hours a week, an hour less than the same time last year.
CSO Director General Gerry O'Hanlon said that the downward trend in wages had intensified in the second quarter of 2009, and the agency expected that to continue for the rest of the year.
While public servants might appear to be faring relatively well, this survey was based on gross income and did not take into account the impact of the pension levy which meant their net pay was also down around 5pc, he said.
"Cutting pay has not been the first response of employers," Mr O'Hanlon said. "Employers are cutting hours worked first and introducing short-time working, as well as laying people off."
The Irish Congress of Trade Unions said that the new figures confirmed that basic pay rates were not falling as core hourly wages and salaries had remained stable or grown in the second quarter of 2009.
Wages falling faster than expected: Business, Page 52
- Aideen Sheehan, Consumer Correspondent
Irish Independent
