Ireland’s Wage Slip



From top: Salary payments; Michael Taft

Most of the income increase over the last five years has been concentrated among higher-income groups

Michael Taft writes:

In a previous blog I discussed the issue of who is benefiting from income increases, using national accounts and the Survey on Income and Living Conditions.

Here’s another look at the issue, this time with the assistance of the CSO’s Earnings database, focusing on wages. This will give us another, potentially more provocative, look at the issue.

That wages are rising is not in doubt.

Since wages (average weekly earnings) bottomed out in 2011,there has been a growth of 7 percent in the private sector while public sector wages have flat-lined. This has resulted in an economy-wide growth of 3 percent.

We always have to be aware of the compositional effect, though – a change in the composition of the group you are measuring.

Here is a simple example: we are measuring the average income of all customers in the pub.There’s 10 customers (slow night) and they have an average income of €36,000.

Then a millionaire walks in. We measure the same group – all the customers of the pub; but now the average is substantially higher. The original 10 customers haven’t experienced any change in income; it’s just that the composition of the group we’re measuring has changed.

So the 7 percent increase in private sector weekly earnings doesn’t mean every worker received that wage increase – more jobs created in in high income sectors (financial, information & communication) will change the composition.

With that caveat, let’s proceed to the next measurement.

The CSO measures average weekly earnings of three types of employees:

Mangers & Professionals: this includes associated professionals
White-Collar Employees: this includes clerical, sales and service employees
Blue-Collar Employees: this includes production, transport, craft and other manual workers

How have these two groups fared?


Managers & professionals have been big gainers – over €100 per week, or nearly 10 percent increase. All other employees, however, have seen their weekly incomes fall. Even if with a compositional effect, its’ a significant difference.

There are some differences when we look under the hood. In the industrial sector (manufacturing, utilities, and mining), the three groups experience similar increases with managers & professionals receiving a 11 percent increase, white-collar workers receiving a 10 percent while blue-collar workers received a 14 percent increase.

However, the rest of the economy brings down the average of the latter two groups.

Rooting under the hood some more here’s another interesting finding: the Information and Communication sector makes up 3.9 percent of all employees in the economy. Yet this sector accounted for 21.2 percent of the entire increase in average weekly earnings.

This shouldn’t be too surprising given the number of multi-nationals in this sector that have located and expanded here in the last five years. Still, it gives evidence of the concentration of earnings.

What does all this mean? Even with a compositional effect, it shows that most of the income increase over the last five years has been concentrated among higher-income groups.

Here are the annualised average earnings for the three categories of workers in the first quarter of this year:

Managers & Professionals: €62,300

White-Collar Employees: €24,500

Blue-Collar Employees: €26,100

Again, we have to mindful that, especially among service workers (e.g. hospitality), some of this difference can be accounted for by less working hours.

We can’t say how much because the data doesn’t provide earnings per hour or working hours; we can’t produce full-time equivalents.However, Information & Communication employees earn nearly three times the hourly wage as hospitality workers – even more of a gap than the annualised earnings above.

Bottom-line: earnings inequality is growing in the economy. This may not mean much if you don’t think inequality is a problem.

However, if you think rising inequality will result in economic inefficiency and social erosion then you should be concerned. Very concerned.

Michael Taft is Research Officer with Unite the Union. His column appears here every Tuesday. He is author of the political economy blog, Unite’s Notes on the Front. Follow Michael on Twitter: @notesonthefront


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61 thoughts on “Ireland’s Wage Slip

  1. Turgenev

    When looking at the public sector, it’s not the salary that’s important, it’s the ‘package’ – the salary plus all the ancillary benefits.

    1. Waddy Dilson

      Such as? Lets say for comparrison, someone earning 38k private sector office worker, vs an Executive Officer level employee in a public sector office, dept of social protection for example.

      Whats the great package that they get apart from flexi hours?

        1. Punches Pilot

          That’s everything really. You sell out for job security and a pension. Lets also not forget that PS wages were vastly over inflated pre bust years and that there’s been nothing but a realignment, a correction if you will of relative remuneration.

          If you want earn more money then its private sector jobs with private sector risk. Only Ireland managed to give you public sector jobs with private sector reward. Oh eh, well Greece did too but that didn’t end well!

          1. Clampers Outside!

            Getting a ‘public sector’ job is selling out now?

            What kinda nonsense is this in fairness? Where’s the sell? What was sold? Fuppin’ nonsense. I work in the private sector.

          2. Waddy Dilson

            You should read the part from the article about how the millionaire walks into the bar … I think even with this incredibly simplified and dumbed down explanation of it you still don’t get it.

            I personally knew a great deal of public service workers earning circa 23,000 in 2005-2008
            Surely that’s not considered private sector pay ?

          3. Punches Pilot

            @Waddy Dilson

            And I plenty of private sector workers on similar wages. Difference being they were all potentially redundant at the stroke of a key with no pension to talk about.

            I don’t resent public sector workers by the way (as Clampers kinda implies) its just that call a horse a horse. The traditional benefits of PS employment were and still are secure employment and pensionable. (Yes there’s others but we wont penny pinch) Now that’s fine but if you want greater financial reward then its the private sector you need to head for, complete with the risks involved.

          4. Punches Pilot

            And @Clampers Outside!

            Sorry, I forgot you take everything quite literally and suffer from Oppositional Defiant Disorder. “Sell out” was simply a lose crude method of describing why somebody might find a job in the Public Sector more appealing. In its literal sense I can see why it caused you {in particular} offence. Apologies.

      1. Cian

        If you are an EO for more than 5 years you’re earning over €38K.

        Would you get 38K in the private sector as an office worker? and how much experience would you need?

        1. Waddy Dilson

          thre years experience in an area not requiring qualifications will get you to 33k, five years will feasibly give you 38k.

          Also, very few people will start at EO level, and will begin at 23k CO level

        2. LW

          Also also, after 6 increments the EO scale is at 35977, which is less than 38000. I think there was something about increments being accrued at 15 months rather than a year in Haddington Road too, not sure about that

      2. Jake38

        1) Gold plated non-funded final salary pension.

        2) Can’t be fired not matter how incompetent/obstructive.

        That’s the great package.

          1. Lorcan Nagle

            Presumably he means that the pension payments aren’t taken out of your wages.

        1. Anomanomanom

          We pay for a pension, unfairly with the pension levy which does not go towards our pension I might add.

    2. Robert

      I’m sympathetic to the ‘package’ argument but saying this divide is astride public/private sector is nonsense. There are winners and losers on both sides. Job security is good in PS as permanent staff but you could say this about just about any semi-state or heavily unionised private sector organisation, or “the banks” for that matter. Public sector has a huge amount of contractors and “consultants” who don’t enjoy the same job security as their permie counterparts. Wages are higher in the private sector? Tell that to the girl making your sandwich at the deli counter.

      Sure there’s a huge amount of wastage in the public sector but that’s not to be laid at the feet of the staff who actually do perform an essential activity and are usually educated professionals.

  2. Water Boy

    What he does not list is the 20% rise in minimum wage that has seen the lowest paid gain most.

    1. LW

      20%? In 2011 the minimum wage was €8.65, since January of this year it’s been €9.15. That’s a 5.8% increase

      1. sirtuffyknight

        Also, what about increase in part-time and zero hour contracts for lowest paid workers?

      2. Anne

        I think Labour were saying it was 20% since they got into government.. it was reduced down to 7.65 for a period.. like if you go back far enough, it’s 50%.

  3. Jimmee

    In a Taft situation, each worker is paid according to what other workers are paid.
    In the current situation, each worker is paid according to their productivity.

    This is why even the poorest in Ireland enjoy better standards of living than the poorest in other countries.

  4. Fact Checker

    This kind of analysis depends ENTIRELY on where you start and end the clock.

    While there is evidence that the higher-skilled have done better so far in this recovery, there is also evidence that those on high incomes took a hit in the preceding downturn.

    Revenue data on the share of those with taxable incomes over €60k; €75k respectively:

    2008: 10.7%; 5.4%
    2011: 9.7%; 4.8%

    Clear evidence that incomes at the top fell in the downturn.

    But if I wind the clock back even further for the same variables I get for 2004: 7.0%; 3.4%.

    Clearly high earners did well between 2004 and 2008, and much of it was retained in 2011!

    The CSO publishes a Gini coefficient for Ireland every year (See table B and figure 4 here It shows that standard measures of income inequality have been REMARKABLY STABLE before, through and after the downturn.

    Determinants of inequality are likely driven by deep structural factors within society. They probably take decades to change and are immune to short-run fluctuations in the business cycle and indeed tinkering at the edges of policy either.

  5. DubLoony

    In the bust, private sector workers were laid off by the hundreds of thousands.
    To avoid same situation for public sector, wages were frozen but they kept their jobs.
    IT is a huge area here, largely export oriented to a global audience. There is competition among companies to attract employees.

    Different sectors, different treatments.

    Infographic here is useful comparison among sectors.

    Over last 5 years, those who have managed to keep a job in private sector are seeing cumulative results.
    Those who lost jobs, were casually employee or restarting another career are on lower pay.

    There are bound to be differences but to balance it out, there should also be analysis on tax paid by higher earners and transfers to no paid or low paid to see effects on inequality.

    Over the past 5 years gini index has largely remained at 30 (about France level) due to progressive taxation and welfare payments.

    1. Stop to think

      Public sector workforce was cut by up to 17% in education and 10% across the public service. They took wage cuts of between 10 and 25%. This idea that the public sector sailed through the crash is nonsense. Loads of pastime staff and contractors were let go and retired staff never replaced and now we all see the result. Worse Healthcare, education etc. Pensions are now career average. There a young teacher today staring work at 22 would have to be 94yrs old before they collect from their pension what they will put in. For that pleasure they will have a pension levy on their salary and no choice but to pay both levy and contribution. And BTW the likely hood that the majority of public sector workers will get their Pensions is diminishing all the time. We have seen several state companies unable to pay pension that were defined benefit.
      My point is this. It is not a public private split. That is just the BS that you are supposed to buy into while the rich guys suck up the cash and take it offshore. Please stop wasting energy attacking each other and those on welfare. The poor will never cost you what the rich do already. In 2 words. Panama papers. Wake up and see what’s happening.

      1. Rob_G

        “Public sector workforce was cut by up to 17% in education and 10% across the public service.”

        – the vast majority of these were through incentivised early retirement; I’m not saying that the public sector is always a cake-walk, but it one of the few avenues of employment these days that has guaranteed job security – this is valuable.

      2. Dan M

        I’d be interested in the figures on “have to live until 94 to get back what they pay in”?

  6. Anne

    Instead of averages, would the CSO not do medians instead? This would give a much better indication of where workers wages are at..

    In the case above, your millionaire walking into the pub, wouldn’t make a difference to the median, if all the other 9 were on say around 36k.

    I read somewhere before too that half of Irish workers earn less than 28k PA. The average means diddly squat, due to the disparity with high income earners, when you consider that…

      1. anne

        You’d still need groups as in the 3 given above, I would think.
        Anyway half of Irish workers earn under 28k.. about 480 a week after tax I think. Maybe enough to keep you off the streets..if you’re lucky.

  7. Anne

    “This may not mean much if you don’t think inequality is a problem.”

    Ah, shura that’s what capitalism is all about, isn’t it? A race to the bottom.. employees are cost – disposable costs.. not even what they used to be considered – fixed costs, that companies want to be able to ‘off hire’.. at a moment’s notice. Let’s call it worker flexibility as IBEC did here –

    They also say there was legislation there to deal with how Clerys treated the workers.. Ooops. Someone musta missed that one. Can’t be ‘interfering in the morket’ when it doesn’t suit.. Have laws that enable the company to split their operations and the building and charge themselves huge rents – not a bother. That’s not interfering in the morket at all.

    Capitalism has run amok.. it’s a pimple on the arse of humanity that’s about to pop IMO.

    Stagnant wages for the ‘average’ worker do not benefit the economy as a whole, as people don’t have spending power – the people who create corporate profits in the first place.

      1. MoyestWithExcitement

        “the OECD, made a remarkable concession. It acknowledged that the share of UK economic growth enjoyed by workers is now at its lowest since the second world war. Even more remarkably, it said the same or worse applied to workers across the capitalist west.”

        Not enough talk about that. Nowhere near enough.

        1. They Tried To Make Me Go To Rehab

          I accept your point Moyest but in the neoliberal world such trifling concerns are non-existent.

          Global capital is fungible and will merely flow to where the cost of labour/regulation is cheapest. We can only influence this by trade embargoes or tariffs on goods from low regulation countries similar to the apartheid embargoes of the 80s on South African goods.

  8. Anne

    “There are bound to be differences but to balance it out, there should also be analysis on tax paid by higher earners”

    That wouldn’t include VAT I take it.

    Of course there are differences.. there is analysis of tax available.
    Obviously if higher earners are proportionallypaying more of the overall tax take, this would only indicate that they’re receiving the bulk of earnings.

  9. boggo

    I havent had a wage increase in 8 years. In fact my salary decreased by 17.5% and shows no sign of increasing despite the ‘recovery’.

        1. Rob_G

          I was talking about boggo’s (and Clampers’) specific cases.

          If you think you are being paid too little, you can always look for a job with better salary/conditions. If you can’t find a job with better pay/conditions, you are not in fact being paid too little (according to the market).

          1. Anne

            “according to the market”

            Therein lies the problem Rob.. the market is not a force of nature.

            It’s peoples’ purchasing power, through their wages that enable corporate profits.
            It’s people who create their wealth. They should have a more equal share in that.. not be subject to the whims of the market.

            The market works within our society that has laws – tax laws, bankruptcy laws.. property laws etc. Who is benefiting more from particular laws is the question. There is no such thing as a market in nature.

            Most people do not want to live in an oligarchical society, where all economic gains are going to a small number of people and their offspring who are going to inherit that wealth..

            Have a read of the Guardian link given above..

          2. MoyestWithExcitement

            “Therein lies the problem Rob.. the market is not a force of nature.”

            +1 It’s a rigged system of people paying whatever they *feel they’ll get away with*.

          3. Anne

            So you agree it’s not perfect, but you’ll defend it at every opportunity.

            I’m not suggesting anything else instead.

            What I’m suggesting and I think what this post is about is, is that increased wages are required for workers… It’s narrow minded to say to someone get another job. See overall charts above.

          4. Rob_G

            “I’m not suggesting anything else instead.”

            – precisely my point; any alternatives to some version of a free(-ish) market have proven to be unworkable.

            “It’s narrow minded to say to someone get another job”

            – I would think it is opposite; many skills in many jobs are transferable. If someone is not getting paid enough in their current job, they can find a different one with better pay. If they can’t find one, then their pay level is appropriate to the job they do.

          5. Anne

            But the market isn’t exactly free Rob..
            We operate within a society with laws that determine how the market operates.

            Here –

            The free market doesn’t exist in nature. It’s created by government, by legislators, administrative agencies and courts and it’s enforced by government.

            All the ongoing decisions about how the market is organised. What gets patented, and patent protection for how long.. The human genome. Who can declare bankrupsty; corporations, homeowners, student debtors.

            What contracts are fraudelent…Insider trader…Or coercive..preditory loans, manditory arbitration. And how much market power is excessive? Comcast and Time Warner for example.

            All of these decisions depend on goverment”

            Corporate profits are created by consumers. Consumers don’t have purchasing power if their wages are stagnant, ergo profits slump.. You can decrease costs all you like in the form of wages, but big picture, wages need to increase to increase profits.

            Even from an economic standpoint, increased wages make sense, nevermind from a moral standpoint.

    1. Charley

      You do realise if you work an hour a week you will be classed as employed, aging population also helps wiggle the percentages Quarterly survey from the CSO will give a clearer picture. First quarter showed 46k found work and the available workforce fell by 5k,

  10. Turgenev

    Has anyone done any figures on the change in the “self-employed” group?

    The number of blue-collar and craft workers who suddenly became “self-employed” “entrepreneurs” when they lost their secure wage-paying jobs in the crash, and have never been re-employed, but are still living hand-to-mouth?

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