Business Irish

Monday 20 August 2018

Call for dramatic cut in 40pc public-private sector pay gap

(stock photo)
(stock photo)

Anne-Marie Walsh

The average public servant is earning 40pc more than the average private sector worker, according to official figures.

There were calls for a dramatic reduction in the public-private sector pay gap after the latest Central Statistics Office data revealed that State workers earn €946.55 a week on average, or €49,390 a year.

This compares with average yearly pay of €35,218 in the private sector.

Public sector earnings are also growing faster, rising by 2.9pc last year compared with 2.3pc in the private sector.

The Irish Small and Medium Enterprises Association (Isme) called for a reduction in the public-private sector pay gap to 10pc by 2025 following the release of the dramatic figures.

Increases in earnings - which include basic pay, bonuses and premium payments - averaged 2.5pc last year in all sectors.

Weekly average earnings at the end of the year stood at €734 in all sectors, or over €38,000 a year, their highest in six years.

"Average earnings growth in the public sector can be partly attributed to wage restoration from April 2017," said the 'Earnings and Labour Costs' report.

But Isme said the public -private sector pay gap is unjustifiable and is piling pressure on employers to give wage hikes.

It noted the difference in weekly pay between the public (€946.55) and private (€674.94) sector stands at €271.61 (40pc).

"The significant gap between public and private sector pay is unacceptable," said chief executive Neil McDonnell.

He said continued increases will put additional pressure on the private sector, but that 38pc of businesses will not increase pay this year because they cannot afford it.

As well as a drastic reduction in the public-private pay gap, he called for more efficiencies in the public sector.

However, the new super union Fórsa, representing 80,000 public servants, said the CSO document does not compare like with like.

"It is crystal clear its figures do not attempt to compare the pay of people doing the same or similar jobs in the public and private sectors, and that recent improvements in public service pay are a result of partial restoration of recession-era pay cuts," said spokesperson Bernard Harbor.

After almost a decade of pay stagnation, he said the union welcomed the fact pay is improving in all sectors, even if it is at a modest pace.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business