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Private-sector pay now 44% behind

The pay gap between workers in the public and private sectors has widened to 44 per cent since the recession began, according to a study carried out by a firm of international economic consultants.

The Indecon report, for the Sunday Independent, reveals that, on average, weekly pay in the public sector has increased by three per cent since 2007.

But in the private sector, in the same period, average weekly pay has dropped by six per cent, mainly because workers in the real economy have had working hours cut.

Almost a quarter of workers in the exposed economy now only have a part-time job -- up more than six per cent since the onset of the recession, according to the report.

The findings are expected to spark a renewed debate on public pay at a time when the Government has said it intends to make savings of up to €4bn next year -- with further massive savings intended each year until 2014.

The public pay and pensions bill is approaching a massive €19bn.

In the first year, until March 2011, the public pay bill was cut by just €289m, primarily through a voluntary redundancy scheme and recruitment embargo.

However, the Indecon report shows that, before tax, the average public sector worker earns €871 a week -- or €269 a week more than the average private sector worker, who receives €602 before tax.

A range of stealth taxes and spending cuts will be announced in the Budget, but workers in the public sector seem to continue to be protected under the Croke Park Agreement. The Government has agreed not to cut public pay or introduce compulsory redundancies until 2014, in return for co-operation on a range of "reforms".

The last Government imposed a pension related reduction in March 2009, and a reduction in pay rates, effective from January 2010, ranging from five per cent to 15 per cent, for public servants.

The effect of these measures, combined with measures to reduce the numbers of public servants and to restrict other elements of the public sector pay bill, has been to reduce the net cost to the Exchequer by 15.5 per cent between 2009 and 2011.

The Indecon Report, 10 Economic Changes Since 2007, has also found that:

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•The average person is about 30 per cent less well off than before the recession.

•Almost 300,000 people have been wiped out financially in the last four years.

The report also details how effective tax rates have increased in every income category, with the highest increases for single employees who are earning €100,000 a year or more.

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