Wednesday 17 July 2019

Chasm between public and private sector pay narrows to 40pc

Isme CEO Neil McDonnell
Isme CEO Neil McDonnell

Anne Marie Walsh

A gaping chasm of 46pc between the average public servant's wages and a private sector worker's pay has narrowed since the bailout.

An analysis of official figures reveals the wage gap between the two sectors has closed by 6pc but is still high at 40pc - a €14,000 difference.

The latest figures show public sector pay has risen more slowly than private sector wages over the last decade.

Public sector earnings increased by less than 0.5pc from €48,376 10 years ago to €48,591 last year.

In comparison, private sector earnings went up at a faster rate of more than 4pc from €33,073 to €34,579.

But the 40pc pay gap may remain as public servants are set for pay "restoration" worth approximately 7pc over the next two years.

Private sector workers are also expected to get increases in the region of 2pc to 3.5pc a year but it remains to be seen if their wages will keep pace. The pay premium for public sector workers is among the highest in the EU, while they also enjoy defined benefit pensions and job security, according to the Department of Public Expenditure and Reform.

ISME has called for a reduction to the public-private sector pay gap to 10pc by 2025.

Chief executive Neil McDonnell said the 46pc gap in 2008 was a reflection of wages after benchmarking, which led to numerous pay rises.

He noted that the exercise, which benchmarked public sector pay with rates in the private sector, was famously described by a former general secretary of the Irish National Teachers' Organisation, Joe O'Toole, as an "ATM machine".

"The gap has narrowed but the problem is that it's very consistently between 38pc and 41pc," he said. "It is difficult to do like-for-like comparisons, but even when you do, and correct for education, experience and so on, the gap remains high and is static. "

He claimed restoring pay was a false debate as benchmarking should never have happened in the first place.

"If we go back into that, we're never going to close this gap," he said. "I would like our Government to talk about this gap, and why it only exists in Mediterranean countries and Ireland. German, French and British public servants are paid way less than our guys."

He said no public sector claims should be entertained until long-running inefficiencies were put on the table. "Across-the-board pay claims in the health service and demarcation issues in hospitals must be eliminated," he said. " The overtime bill in Justice has to be controlled. Junior cycle reforms, and the correction of exam papers are just two issues that must be addressed in education."

Fórsa, which represents 80,000 public servants, has argued the Central Statistics Office's earnings figures do not compare people doing similar jobs, or with similar qualifications, age and experience.

Irish Independent

Also in Business