‘Surprise’ as public sector salary rise outstrips private

Economists have expressed “surprise” that, in spite of the drive to cut the State’s pay bill, public sector wages rose more than private sector pay over the past year.

The latest figures from the Central Statistics Office show earnings in the public sector rose 1.3% in the year to Q2 2013, while those in the private sector increased by just 1%.

“The composition of the rise in nominal wages is surprising,” said David McNamara of Davy Research.

“Public sector wages have yet to reflect the cuts agreed by the Government and the public unions. Given the delays in agreeing the new pay deal, this shouldn’t be entirely surprising, but we had expected some moderation in nominal wage growth by now.

“So the bulk of the cuts will not now come through until Q3 at the earliest, with the Government targeting savings of €300m in 2013 and €1bn in 2014.”

However, the CSO itself attempted to explain the increase, pointing out that a recruitment embargo pushes up earnings for those who remain in the service.

“Many public sector employees are paid on the basis of incremental scales,” said the CSO. “Recruitment, particularly at lower levels, to these sectors would generally result in a depression to average earnings. The absence of recruitment has the opposite effect.”

As these figures are for Q2 2013, they do not include cuts under Haddington Road, as the deal was not broadly agreed until the start of the third quarter. The number of people employed in the public sector dropped by 1.4% to 377,300 in the year to Q2 2013.

The CSO figures showed average weekly earnings rose in six of the seven sub-sectors of the public service over that 12-month period. The largest percentage increase (2.3%) was in the Garda Síochána, average wages up from €1,209.68 to €1,237.87 per week.

The CSO’s figures put average weekly earnings in the public sector at €928.76 compared to €623.17 in the private sector.