Drop of 4% in average earnings a ‘boon’ to our competitiveness

ECONOMISTS have described an almost 4% drop in average earnings across the economy over the last 12 months as a “boon” to the country’s competitiveness.

Figures published by the Central Statistics Office showed average weekly pay dropped from €709.55 in the first quarter of 2009 to €682.91 in the first quarter of this year.

The CSO said that drop was reflective of both the 2.2% decrease in the number of hours being worked and the 1.5% drop in the hourly wage rate.

Due to the cuts applied in last December’s budget, public service workers experienced a 5.5% fall in weekly earnings compared to just 2.8% for their private sector counterparts. The CSO also pointed out that its assessment of public service earnings did not take into account the pension levy imposed on the sector.

Average weekly earnings in the public sector stood at €882.24 compared with €614.02 in the private sector.

Workers in education would appear to have been the hardest hit with a 9.1% drop between the first three months of 2009 and the corresponding period this year.

When pay was broken down to the hourly basis, the average fell from €22.44 to €22.10. Again the drop was considerably larger in the public sector due to the December budget, even though again the pension levy was not factored in.

The fall in the public sector was 3.7%, leaving the hourly average at €28.87. In the private sector the fall was 0.4% leaving the average at €19.80 per hour.

On average the number of paid hours being worked fell by 2.2% to 30.9 hours over the period.

Davy Stockbrokers said that although the decrease in paid hours reflected weak demand around the start of the year, the fall in hourly earnings is a boon to Ireland’s competitiveness.

However, small to medium business representative ISME pointed to figures which appeared to signal the opposite.

It said it had “serious concerns” that the latest Global Competitiveness Index report confirmed Irish competitiveness had continued to decline over the last 12 months, falling from 25th to 29th place overall.

It blamed the Government, saying it had failed to address the key problems facing business, including access to finance, cost competitiveness and state bureaucracy.

Mandate trade union, which represents 50,000 workers in the retail trade, said the latest CSO figures showed people on lower incomes are being squeezed the hardest by the recession. The union’s general secretary John Douglas said the figures showed that the “weekly earnings of the lowest paid workers in the economy – clerical, sales and service staff – fell by 5.9% in the year to the first quarter of 2010.”

Salaries slated

ENTREPRENEUR Ben Dunne has attacked the massive salaries paid to the managerial sector in Ireland. In an interview on Newstalk radio Mr Dunne said: “We are in serious trouble, there has got to be a complete change in the way this country is run.”

He added that it was the managerial level and above where pay levels had to be most severely reduced, whereas lower paid people needed to maintain their wages so they can spent on goods and services. His comments followed remarks by chief executive of Glen Dimplex Sean O’Driscoll, this week, that wages should be frozen for five years.

ICTU spokesman Peter Rigney said Mr O’Driscoll’s comments were surprising when given he was a director of AIB who had seen his fees for this position triple to more than €60,000 between 2006 and 2008.


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