Government urged to act on widening pay gap

The Government has been urged to do more to close the gap between pay levels in the public and private sectors, which is widening according to latest CSO data.

New preliminary quarterly earnings and labour cost figures, published yesterday by the CSO, show that average weekly earnings, across both sectors combined, grew by 2.2%, year-on-year, in the three months to the end of June, to €722.65. Final CSO data for the first quarter of the year show a 1.5% annualised rise in average weekly earnings to €724.44.

The provisional figures for the second quarter show a 2.4% year-on-year jump in average earnings for the public sector to €938.25 per week. There was also an annualised increase for average weekly earnings in the private sector, of 1.9%, to €660.99.

However, the gap between the two is widening, now standing at €277.26, and has gone from a 37% gap as of the end of March to a 42% gap as of the end of June.

Business lobby group Isme has urged the Government to act and focus more on infrastructure spend and improving the country’s cost competitiveness.

“Our most recent business trends research shows 36% of SMEs will not increase pay this year. This reality has to sink in with those in the public sector and in Government. We must stop the increasing inequality between public and private sector workers,” said Isme boss Neil McDonnell.

“Taxpayers’ money must be directed to the greater good, not geared toward the select few. The possibility of a hard Brexit makes this even more important. Ireland in the Brexit era must remain attractive and cost-competitive for existing businesses and potential investors,” said Mr McDonnell.

He added: “In our pre-budget submission we said capital expenditure must take precedence over increasing current expenditure. We call on Government to prioritise the National Broadband Plan, to target infrastructure spending at 4% of gross national income, to provide rapid provision of affordable housing, and improve public transport.”

Davy Stockbrokers was less downbeat in its reaction to the latest CSO figures, pointing to the continuing growth in private sector employment and suggesting likewise is imminent for the public sector.

“While the full employment numbers for the second quarter have yet to be published, we expect another strong gain in private sector employment following the 3.6% rise in the first quarter,” said analyst David McNamara.

“Wage pressures were stronger in larger firms, up 2.4%, while growth for SMEs was still a healthy 1.8%,” he added, with regard to the second-quarter wage data.

According to the CSO figures, wages fell by 3.6% in construction firms in the second quarter, but strong rises were seen in wholesale and retail; public administration and support services, where there was a 9.4% increase. The lowest average earnings, €339.38, were in the accommodation and food services sector.

Numbers employed in the public sector grew by just under 1% in the quarter, on a year-on-year basis, to 393,200, the highest level since the third quarter of 2011. The largest gains were seen in health and An Garda Síochána.

The CSO said that in the last five years average weekly earnings have increased by 4.2%, from €693.50.


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