From top: Irish waste workers would need nearly 60 percent pay rise to reach their EU peer-group’s mean average; Michael Taft
In their EU peer group, the Irish low-paid are some of the lowest paid, according to recently published Eurostat data.
In the overall economy, Irish employees are paid less than their peer group – other high-income EU economies (essentially, the EU-15 excluding the poorer Mediterranean counties and, very shortly, the UK).
Eurostat estimates employee compensation (including labour costs which make up a fraction of the total) for firms employing 10 workers or more. Public Administration is excluded as many countries do not report this.
Ireland is at the bottom of the table, above only low-paid UK. On average, Irish employees would need an 18 percent increase in compensation to reach the mean average of our peer group.
It should be noted that the average is mean; another measurement would be the weighted average but Eurostat does not provide this. However, the weighted average would, in most cases, be somewhere between German and French levels since they dominate this grouping. This would still leave Irish workers requiring a 13 percent increase.
Let’s turn to the Irish low-paid sectors in the market economy (essentially the private sector), which for the purposes here are calculated at 2/3 of the Irish average.
There are eight sub-sectors below this benchmark: retail, hotels, restaurants, waste collection, security, building services (cleaners and gardeners), and wearing apparel and furniture manufacture.
There are 315,000 people employed in these sectors, or one-third of market economy employment.
The largest sub-sector is the retail sector with over 153,000 employees. Ireland is at the very bottom, even below low-paid UK.
Irish retail workers would need a 43 percent increase in compensation (a 33 percent increase if we use our short-cut weighted average; that is, half the difference between Germany and France). The gap between Irish and average peer-group pay is more than twice as much as the national gap.
The next two biggest sectors are in the hospitality industry: hotels and restaurants.
If anything, the situation is worse for the 128,000 Irish hospitality employees – with a larger gap with their peer-group than retail workers have.
There are two other low-paid service areas: private security personnel and building service workers (primarily cleaners and gardeners).
The 27,000 Irish workers in these sectors also see their compensation trailing significantly.
The story is much the same for the other sectors. The small manufacturing sectors of furniture and wearing apparel also find themselves well behind their peer-group.
There is one last group: the waste collection sector. These are the workers – 3,500 of them – who pick up, treat, recycle and dispose of our rubbish.
Irish waste workers would need a nearly 60 percent compensation increase to reach their peer-group’s mean average. Even taking the short-cut weighted measure, they would need a 42 percent increase, but this probably understates this measurement given the high compensation levels pertaining in other countries.
None of the above factors in inflation (purchasing power parities). If we did that we would find the gap with the mean average shrinking but, when using a weighted average, it would widen (largely because Germany is low-inflation economy).
It should be further noted that employee compensation includes both the direct wage (paid directly to the employee) and the social wage (paid to a Social Insurance Fund).
Through the social wage, employees in continental Europe can access free (or low-cost) health care, subsidised prescription medicine, and in-work income supports (pay-related sick benefit, maternity and paternity leave, etc.).
Further, in many countries the social wage – apart from social insurance – subsidises public transport (e.g. Paris) and generous family supports (e.g. Austria).
Even when you exclude the social wage, Irish wages are low – with retail workers needing a 22 percent increase just to reach their peer group mean average (or 15 percent when inflation is factored in).
Add in all those costs Irish workers bear that workers in other countries get subsidised through the social wage, and we now we see why Irish living standards are relatively low.
Getting a pay rise is only one aspect of correcting this situation.
There is a need to increase the social wage (employers’ social insurance) so that workers can consume more public services and supports collectively.
We need to focus on the lowest-paid in society. It is scandalous that so many are left behind on such low wages.
We need to focus on employees’ rights in the workplace (e.g. collective bargaining), bargaining across sectors and, just as importantly, a social-cultural transformation that no longer tolerates such grim conditions.
These are the people – our neighbours, friends, family members, and fellow residents – who serve our meals, clean up after us, secure our buildings, assist us in the shops, pick up our rubbish and manufacture the goods we use.
Maybe it’s a bit passé or old-fashioned to say that this is a moral issue. But given the level of low pay, hopefully not.
Michael Taft is a researcher for SIPTU and author of the political economy blog, Notes on the Front.