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Recession cut disposable income of workers by up to €17,000 in one year

MIDDLE Ireland took the brunt of pay cuts after the recession hit, with disposable incomes slashed by up to €17,000 in the space of just one year.

New figures reveal the massive financial pain suffered by middle-ranking workers from teaching assistants to gardai.

The worst affected were workers who had gone to college and emerged with a diploma, while those who studied for a degree were also badly hit.

Workers who have done college courses but not degrees saw their income collapse between 2009 and 2010.

Households where the main earner was the holder of a diploma saw their disposable income plunge from €65,000 in 2009 to €47,855 in 2010 -- a drop of more than €17,000 -- according to new Central Statistics Office (CSO) figures.

This group of workers is understood to include the likes of nursing assistants, draughtsmen and foremen in the construction industry, accountants, technicians, chefs and sales people.

Savage pay cuts and job losses have combined to decimate the incomes of this set of "middle Ireland" workers, often described as the backbone of the economy.

And graduates have also seen their incomes drop by close to €10,000 in 2010, according to the CSO's latest survey on income and living conditions.

Those who attained a university degree or higher saw their household disposable income crash from €69,401 to €59,894 between 2009 and 2010.

Across the country the average worker saw their household's disposable income fall by €2,623 to €43,333 during this time.

Pressure

However, retired people bucked the trend with a rise in their income, the CSO study headed up by statistician Marion McCann shows.

Retired people saw their household's disposable income jump by €481 to €36,664 on average in 2010. Lump sum payments from both public and the better private sector pensions are understood to account for the rise in the average figure.

And the survey shows the extent of the pressure to pay bills and mortgages on households as families labour under the burden of massive debts taken on during the boom.

One-fifth of households were behind on the payments on one or more bills in 2010. Almost one in eight households is behind on the electricity bill with one in eight in arrears on the mortgage or rental payments. Yesterday's report also found one-third of households who were classed as at risk of poverty were behind with a bill or loan.

The CSO said there was an increase in income inequality between 2009 and 2010. It found that the top one-fifth of earners earned five-and-a-half times more than those in the bottom fifth category. That ratio rose from just under 4.5 from a year earlier, indicating increased inequality.

It found that the consistent poverty rate was 6.2pc, representing no change on the 2009 figure.

Fr Sean Healy of Social Justice Ireland said there was an alarming rise in the rates of child poverty.

The CSO said children remained the most exposed age group living in consistent poverty, a rate of 8.1pc.

"There is a real strong message to Government here," Fr Healy said.

"It needs to take a serious look at what is actually happening in the decisions it is taking because it is quite clear that even though incomes are falling across the system and poverty lines are falling, poor and vulnerable people are taking a disproportionate hit in the adjustments that is taking place."

Irish Independent