Public sector wages rise faster than private sector

Public sector wage increases and the jobs boom in construction may be driving an outsized increase in pay and earnings, the latest official figures suggest.

Public sector wages rise faster than private sector

According to the CSO, average weekly earnings for public and private workers rose 1.4% in the first three months of the year from the same period in 2016, at a time when the annual consumer price index rose by less than 1%.

The figures also showed that average weekly earnings rose in private firms by an average 1.5% in the year but increased across the public sector, including jobs in semi-state companies, by 1.6%.

The biggest increases in all areas of the economy were for administrative and support services and in construction, and in only two of the 13 areas of the economy — information and communication and arts and recreation — did wages fall in the period. The release comes at a significant time.

The Government, as an employer of almost 390,000 public sector workers, started talks this week with public sector unions as they seek to strike a successor agreement to the Lansdowne Road pay accord which set pay and conditions during the austerity years.

Business group Isme warned against the Government conceding to “unjustifiable” pay increases for public workers, saying that there was already evidence that the gap between private and public pay had gone beyond a debate about Government finances to be “a moral issue”.

“The yawning pay gap between public and private sector is unique to Ireland. In other OECD countries the gap is narrower or non-existent. This is no longer just a fiscal issue. It is an issue of basic social solidarity, morality and equality,” said its chief executive Neil McDonnell.

According to the CSO, the 1.6% increase brought average weekly earnings in the public sector to €915.73 although wages only increased 0.4% when census staff are excluded. Six of the seven public sector jobs categories posted increases. The 1.5% increase for private sector brought wages there for over 1.65m people to €695.15.

The best public sector workers were employed in education and by An Garda Síochána.

Average hourly earnings in education in the first quarter were €37.71 for over 24.2 hours. An Garda Síochána paid an average of €28.26 an hour for average hours worked of 42.7 hours.

The CSO said that jobs in the public sector rose 0.7% to 389,200 in the quarter from 386,300 from a year earlier. Employment in the public health services jumped 3.6% to 127,500 but the CSO said the health statistics included some jobs in the private sector. Civil service employment slid 8.3%, to 40,000, in the same period.

Conall Mac Coille, chief economist at Davy Stockbrokers said: “One of the fastest increases in average earnings was in the construction sector, up 3.8%, followed by transportation and storage, up 3.6% and hotels and restaurants, up 3.4%. In contrast, finance, insurance and real estate, up 0.5%, and wholesale and retail, up 0.9%, lagged behind.

He said the CSO report for employment meant private sector jobs stood at over 1.65m in the first quarter, an increase of 4.2% in the year. “This is the fastest pace of private sector job creation since 2013,” he said.

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