Tuesday 20 March 2018

Wages jump 1.5pc as public-private pay gap gets bigger

Charlie Weston Personal Finance Editor

WAGES have risen across the board despite the financial crisis, official new figures show.

Earnings jumped by 1.5pc over the past year as both public sector and private sector workers got higher pay.

Average earnings in the private sector increased by 1.6pc an hour between July and September. Public sector average hourly earnings rose by 1.1pc over the same time period, according to the Central Statistics Office (CSO).

It is understood that some large private sector companies, particularly those in the pharma sector, have agreed pay rises.

Large numbers of public servants benefit from €300m worth of pay hikes every year.

Weekly earnings now average €693, up from €684 a year earlier.

The CSO said that average hourly earnings rose in seven of the 13 sectors with the biggest increase seen in the administrative and support services sector, with wages there up 5.4pc.

The largest decrease was seen in the construction sector with wages there down 4.3pc.

And the figures show public sector workers now earn almost 50pc more than those in the private sector, new official figures show.

The growing pay gap means earnings for public servants are almost €300 a week higher than for those in private companies. Weekly earnings in the public sector now average €906, compared with €617 in the private sector, according to the CSO.


Business lobby groups said the gulf in earnings between public and private workers meant the Government should not pay the €300m worth of increments this year for public servants.

Mark Fielding of small business group ISME said public servants were getting pay rises for turning up for work.

Annual wages in small firms had dropped from €31,000 to €28,000 on average in the past three years and private sector workers had borne the brunt of job losses, with many on part-time hours, he said.

But economist with the Irish Congress of Trade Unions (ICTU) Paul Sweeney said many large private companies, particularly those in the pharma sector, were agreeing pay rises.

He disputed the CSO figures showing such a large gap between public and private sector wages, which he said were "factually inaccurate".

He said the earnings figures took no account of the fact that those working in the public sector tend to be better qualified.

The figures are compiled by the CSO every three months.

Private sector pay includes everybody from highly paid chief executives to construction workers and factory hands.

The public sector includes everybody from government ministers to teachers and rubbish collectors.

Mr Sweeney said larger employers tend to pay more, whether in the private or public sector.

And public sector workers tend to be unionised, with a premium paid to those who are members of unions, the ICTU economist said.

Mr Sweeney added that public sector pay was skewed by hikes of up to 33pc paid to managers and higher public servants from the 2007 benchmarking process for senior public servants.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business