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Monday 20 November 2017

You've never had it so good -- pay higher now than in boom

Surprise figures from the Central Statistics Office (CSO) show a higher average hourly rate of basic pay for the first quarter of 2012 compared with the first quarter of 2008.
Surprise figures from the Central Statistics Office (CSO) show a higher average hourly rate of basic pay for the first quarter of 2012 compared with the first quarter of 2008.
Mark Keenan

Mark Keenan

THE average Irish worker is earning 74 cent more an hour in basic pay today than they did at the height of the boom.

Surprise figures from the Central Statistics Office (CSO) show a higher average hourly rate of basic pay for the first quarter of 2012 compared with the first quarter of 2008.

However, the figures were skewed by the awarding of increments to civil servants -- the majority of whom are given small pay rises for each year of service.

The CSO figures show that hourly pay -- excluding bonuses and special payments -- stood at €20.89 an hour in the first quarter of this year compared with €20.15 in the first quarter of 2008.

This indicates that those in lower paid sectors are most likely to have lost their jobs in the downturn, while at the same time those in the civil service have most likely increased their earnings.

Experts say the figures indicate a number of trends taking place in the labour market since the crash including a concentration of job losses in lower income sectors; a preference in the private sector to cut costs by shedding jobs rather than reducing basic hourly pay; the wholesale removal of substantial bonuses and other benefits; and the boosting effect on the national average hourly rate caused by the controversial increment system in the public sector -- which accounts for around one-fifth of the workforce.

As a result of increments many of the 300,000 or so public sector workers are likely to have increased rather than decreased their basic pay substantially since 2008.

A recent report claimed that increments had cost the Exchequer more than €250m last year -- which works out at about €800 extra per civil servant.

Had this amount instead been spread across the entire workforce of 1.6 million, it would have been enough to add an additional 7.8 cent an hour to everyone's rate in that year.

Downturn

Pat Burke, a partner with business advisers Grant Thornton, pointed to the "generally lower paid areas of construction and accommodation" where workers were paid €15.83 in 2008 -- well below the national average.

Since 2008 the numbers working in these two sectors have fallen by 125,000, which could help explain how the national average hourly rate can rise "even if no one gets a penny extra".

"In contrast, we can also see that pay has been best preserved in companies employing more than 2,000 -- so now we're talking about the foreign companies in the tech and pharma sectors," he said.

Mark Fielding, of ISME, added: "Apart from the distortions applied by the public sector increment system, most small and medium enterprises have shed significant amounts of staff through the downturn."

Irish Independent

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