CSO lowers public versus private pay gap to 19%

THE Central Statistics Office has almost halved its estimate of the public-versus-private sector pay gap to 19.1%, a move welcomed by some public service unions but dismissed by others.

With the Government widely expected to demand at least 5% pay cuts in the public sector in the December budget in order to claw back some of the €4 billion it needs to save this year, the income of civil service, education and health staff has been under intense scrutiny in the last number of weeks.

One of the reports which fuelled the calls from economists and commentators for a reduction in public service pay, was the CSO National Employment Survey for 2007. Released in July, it found average weekly earnings of the State’s employees were 32.6% higher than those in the private sector.

However, a supplementary report to the survey, released yesterday, completely revised that figure.

The CSO admitted it did not take into account “the differences in characteristics of employees in both sectors.”

“Sector of employment is not the only determinant of earnings,” it said. “In this study, both the attributes of the employees, such as educational attainment, experience, hours worked and the characteristics of their employment such as the size of organisation, were used to further explore the wage differential between the two sectors.”

For example, the CSO’s analysis of educational qualifications in the two sectors found that 39.5% of public sector employees had a third-level degree or higher qualification compared with 19.9% in the private sector, and while almost 25% of private sector employees had only a primary or lower secondary qualification, the figure was 17.9% in the public sector.

The CSO revised figures used what it described as “multivariate analysis” to take the other factors into account and concluded there was an average 19.1% gap.

It also found that the percentage gap between workers on lower pay in the two sectors was far bigger than the gap at the higher levels.

For employees in the lowest 10%, the earning gap was 25.7%, this fell to 11.4% among the top 10%.

The Teachers Union of Ireland deputy general secretary Annette Dolan said the CSO findings “shattered the myth of huge pay gaps between the different sectors”.

“It shows that for permanent full-time employees between 25 and 49, the so called public sector premium is 12.6%,” she said.

“As this analysis dates from 2007, the differential would now be far less as public sector workers have since been hit with a pay cut in the form of the so called pension levy of an average of 7.5% of salary.”

However, the country’s largest public sector union, IMPACT, said the CSO’s figures were entirely flawed because the CSO itself had confirmed that it had not compared real jobs in the public or private sector.

IMPACT deputy general secretary Shay Cody also said it was impossible to take CSO and Economic and Social Research Institute claims of a pay gap seriously when the two organisations had published four separate figures – ranging from 19% to 47% – since July 2009.