19 replies on “Pay and Employment Trends in the Public and Private Sectors, by Colm McCarthy”
Thanks, Colm, very helpful.
Your data suggest that public pay cuts are equal to or less than private pay cuts. With private employment falling and public employment staying the same, this implies that the public sector has grown relative to the private sector.
Furthermore, with pay falling but benefits and pensions not, the working population is relatively worse off.
I find it difficult to call this “fair”. It is not the best path to economic recovery either.
Thanks for supplying some data on what has been anecdotally reported, hopefully the CSO will have improved information soon. May I just say that it would also be a good idea if An Bord Snip Nua issued a press release to tell us when it will be making it spending cut recommendations to government.
All the public sector cuts should be announced together so no one group can suggest it’s being targeted. Maybe this information is out there, but the public do not seem to know when we will know of the spending cuts. This is now an urgent issue.
I would suggest that these announcements could be made around June when people will have felt the extent of tax increases. This would give the government 5 months to agree the cuts with unions etc (including facing down union strikes once & for all) in advance of the December budget. In this way, the cuts in current spending could be ready to go on January 1st or earlier. Better late than never.
One issue that is not really captured in this data would include extra pay such as overtime, bonuses etc. which are likely to account for a greater deal of the total remuneration in certain private sector industries. Also, as mentioned by many others, you cannot really compare the average pay among teachers (say) and those in construction as there are age, education, and other differentials that would skew the data.
Just a small point for information. My understanding is that the figures on public sector employment published by the CSO in its Public Sector Employment and Earnings series should be considered minimum figures. Some of the figures (e.g. for Administrative Civil Servants, the Health Sector, Third Level Institutions) are presented on a full-time equivalent basis rather than on a persons engaged basis. While the extent of job sharing and part-time working in these sub-sectors is not known, it is likely that on a persons engaged basis the number employed in the public sector could be in the region of 400,000 at end of Dec 2009. Based on Colm’s figures for total employment, this would put public sector employment close to one in five of all employees.
Public pensions have increased by 63.3%, and job-seekers allowance by 72% since 2002, from admittedly very low levels.
Comparing early 2002 figures to the last published figures of last year, public sector pay has increased by 39% and private sector pay by 29%.
Prices changed by 23% and food prices by 13.35% over the same period.
So, while all sectors of society are better off, those that are paid out of the public purse have benefited the most. The pension levy, in effect a pay cut for public sector workers, reduced the advantage of public sector workers, but did not eliminate it. This is before any of the reductions in private sector pay discussed above.
Those dependant on social welfare are the one group in society who have not seen a decrease in their standard of living in the last year, and may, when the weakness of sterling feeds into food prices see an increase in lving standards. The rental housing market must also have become a easier place for those on rent allowance. So one of the strange positives to come out of the current recession is a decrease in inequality!
Therefore the Irish Times article is incorrect – the less well off in our society have been sheltered from the worst of the recession.
The weakness of sterling is allready feeding through into food prices, both here and in the UK. CSO figures out today: food price inflation in Ireland in March negative y-o-y (down 0.6% y-o-y) – food price inflation in UK in February up 12.5% y-o-y (UK March figure not out yet). That’s a gap of 13.1%. If this contibues, there will be a lot fewer shoppers in Newry this Christmas than last Christmas.
CT asks about overtime, bonuses etc. The figs are for weekly earnings, so these should be accounted for. The new CSO series will break out irregular earnings on a clearer and more comparable basis across sectors.
Tom Ronayne asks about the coverage of the public employment series, and wonders if they under-state the total. The CSO release (Public Sector Employment and Earnings for Dec 08) states that the numbers covered include (i) full-time employees, permanent and temporary (ii) part-time employees and (iii) persons on holidays, maternity leave, temporary absence due to illness. The only ones left out are those off the payroll (secondment, career breaks) and those occasionally employed (eg consultants) on a fee basis. So I think Tom is wrong on this one.
The CSO releases contain pretty good notes on coverage, all downloadable free on cso.ie.
Margaret Hurley makes the point that social welfare rates of payment were increased c. 3% in October’s budget, since which time CPI and HICP have fallen. So those at the bottom end of the income distribution have in fact been protected. True as far as it goes, but of course there are many on welfare now who were working six months ago.
[…] sector pay premium, as its been matched by pay cuts across the private sector. Some interesting discussion on the topic over at […]
@Colm
True. The previously-not-working population is better off, not the recently-still-working.
A sharp drop in the participation rate plus a redistribution from private to public, and from working to non-working …
I believe that we can usefully dispense with civil servants working in “constituency” offices for the elected and in power?
Does the President really need so many?
They may even be unemployable, but should be interrogated for anything which might be useful, before being allowed back into the general civil service.
Isn’t this really a discussion about equity of pay in Ireland?
What stops those in the private sector from competing for jobs in the obviously? overpaid public sector?
Doesn’t that mean that the public sector has the better qualified employees? That is, you get what you pay for?
And underpaying them will bring about what exactly? I trust we can agree that they will never be paid “what they are worth” despite rhetoric to that effect? They will be overpaid or underpaid only. Which do you prefer and why? What sectors of the public service should be privatized? If they have a choice, they can walk. Is there a case for making all public sector jobs appointments for say 3 years only? It is certainly one way to attack corruption. It is noticeable that some senior public servants moved when a new minister came into a department. And if the minister already had a ministerial pension, s/he might also arrange to have her previous team serve her.
Or is it that Richard Tol is disappointed that he was never lucky (!) in the civil service exams?
One of the reasons that there was widespread support for a benchmarking process was that the public service was losing quality employees to the celtic tiger. One of the Brutons said something about duds or alcoholics I recall.
One reason why private sector pay scales are not to be trusted is because lies are told in the public service, but are the rule in the private sector. Salary discussion is a no-no in the private sector. And tax evasion ensures that returns are always lower than the reality, off shore bank accounts and cash in hand being common. COMMON! Ask an FOI if you don’t believe me…. And don’t say CSO never tell fibs. We in the tax office woul ask CSO specified taxpayers for their true payroll figures etc. No-one has an idea if they are accurate. When we busted a large taxpayer, as we laughingly called them, we did not send up revised figures to CSO. We were too busy breaking another!
Any studies on this chaps? NO! Why? Because it would cause too many problems! Corruption everywhere…
The point I made was not about the coverage of the series but the meaning of the numbers reported as in employment – specifically figures in the Public Sector Employment and Earning Series are not directly comparable to figures in the QNHS series. In the former full-time equivalent figures are used for some sectors – notably Health with 111,000 full-time equivalents in employment. As job-sharing and part-time employment is high in the Health sector the actual numbers employed on the basis of the ILO definition used in the QNHS are likely to be much higher than the 110,000 reported in the Public Sector Employment and Earning Series. This also applies to the figures reported for Administrative Civil Servants and Third Level institutions.
Oops! Tom’s right and I’m wrong, for the sectors he lists. Should have read the rest of the CSO’s note. Some day, we will find out how many people work in Health…
@Pat
I was a civil servant for seven years, and one may argue that the ESRI and VU are pseudo-civil service too.
[…] have in the private sector. So the disparity has remained roughly constant. That’s according to an analysis by your friend and mine, Dr. Colm McCarthy of UCD. […]
[…] need to reduce incomes than all should be reduced All incomes are being reduced. See the data here if you’re interested in some reality. […]
[…] nominal pay cuts in the private sector were being discussed in the media. In a post on this blog, Colm McCarthy tentatively concluded, on the basis of some private surveys, that “[B]earing in mind the […]
19 replies on “Pay and Employment Trends in the Public and Private Sectors, by Colm McCarthy”
Thanks, Colm, very helpful.
Your data suggest that public pay cuts are equal to or less than private pay cuts. With private employment falling and public employment staying the same, this implies that the public sector has grown relative to the private sector.
Furthermore, with pay falling but benefits and pensions not, the working population is relatively worse off.
I find it difficult to call this “fair”. It is not the best path to economic recovery either.
Thanks for supplying some data on what has been anecdotally reported, hopefully the CSO will have improved information soon. May I just say that it would also be a good idea if An Bord Snip Nua issued a press release to tell us when it will be making it spending cut recommendations to government.
All the public sector cuts should be announced together so no one group can suggest it’s being targeted. Maybe this information is out there, but the public do not seem to know when we will know of the spending cuts. This is now an urgent issue.
I would suggest that these announcements could be made around June when people will have felt the extent of tax increases. This would give the government 5 months to agree the cuts with unions etc (including facing down union strikes once & for all) in advance of the December budget. In this way, the cuts in current spending could be ready to go on January 1st or earlier. Better late than never.
I see that some disagree with me:
http://www.irishtimes.com/newspaper/breaking/2009/0409/breaking45.htm
One issue that is not really captured in this data would include extra pay such as overtime, bonuses etc. which are likely to account for a greater deal of the total remuneration in certain private sector industries. Also, as mentioned by many others, you cannot really compare the average pay among teachers (say) and those in construction as there are age, education, and other differentials that would skew the data.
Just a small point for information. My understanding is that the figures on public sector employment published by the CSO in its Public Sector Employment and Earnings series should be considered minimum figures. Some of the figures (e.g. for Administrative Civil Servants, the Health Sector, Third Level Institutions) are presented on a full-time equivalent basis rather than on a persons engaged basis. While the extent of job sharing and part-time working in these sub-sectors is not known, it is likely that on a persons engaged basis the number employed in the public sector could be in the region of 400,000 at end of Dec 2009. Based on Colm’s figures for total employment, this would put public sector employment close to one in five of all employees.
Public pensions have increased by 63.3%, and job-seekers allowance by 72% since 2002, from admittedly very low levels.
Comparing early 2002 figures to the last published figures of last year, public sector pay has increased by 39% and private sector pay by 29%.
Prices changed by 23% and food prices by 13.35% over the same period.
So, while all sectors of society are better off, those that are paid out of the public purse have benefited the most. The pension levy, in effect a pay cut for public sector workers, reduced the advantage of public sector workers, but did not eliminate it. This is before any of the reductions in private sector pay discussed above.
Those dependant on social welfare are the one group in society who have not seen a decrease in their standard of living in the last year, and may, when the weakness of sterling feeds into food prices see an increase in lving standards. The rental housing market must also have become a easier place for those on rent allowance. So one of the strange positives to come out of the current recession is a decrease in inequality!
Therefore the Irish Times article is incorrect – the less well off in our society have been sheltered from the worst of the recession.
The weakness of sterling is allready feeding through into food prices, both here and in the UK. CSO figures out today: food price inflation in Ireland in March negative y-o-y (down 0.6% y-o-y) – food price inflation in UK in February up 12.5% y-o-y (UK March figure not out yet). That’s a gap of 13.1%. If this contibues, there will be a lot fewer shoppers in Newry this Christmas than last Christmas.
CT asks about overtime, bonuses etc. The figs are for weekly earnings, so these should be accounted for. The new CSO series will break out irregular earnings on a clearer and more comparable basis across sectors.
Tom Ronayne asks about the coverage of the public employment series, and wonders if they under-state the total. The CSO release (Public Sector Employment and Earnings for Dec 08) states that the numbers covered include (i) full-time employees, permanent and temporary (ii) part-time employees and (iii) persons on holidays, maternity leave, temporary absence due to illness. The only ones left out are those off the payroll (secondment, career breaks) and those occasionally employed (eg consultants) on a fee basis. So I think Tom is wrong on this one.
The CSO releases contain pretty good notes on coverage, all downloadable free on cso.ie.
Margaret Hurley makes the point that social welfare rates of payment were increased c. 3% in October’s budget, since which time CPI and HICP have fallen. So those at the bottom end of the income distribution have in fact been protected. True as far as it goes, but of course there are many on welfare now who were working six months ago.
[…] sector pay premium, as its been matched by pay cuts across the private sector. Some interesting discussion on the topic over at […]
@Colm
True. The previously-not-working population is better off, not the recently-still-working.
A sharp drop in the participation rate plus a redistribution from private to public, and from working to non-working …
I believe that we can usefully dispense with civil servants working in “constituency” offices for the elected and in power?
Does the President really need so many?
They may even be unemployable, but should be interrogated for anything which might be useful, before being allowed back into the general civil service.
Isn’t this really a discussion about equity of pay in Ireland?
What stops those in the private sector from competing for jobs in the obviously? overpaid public sector?
Doesn’t that mean that the public sector has the better qualified employees? That is, you get what you pay for?
And underpaying them will bring about what exactly? I trust we can agree that they will never be paid “what they are worth” despite rhetoric to that effect? They will be overpaid or underpaid only. Which do you prefer and why? What sectors of the public service should be privatized? If they have a choice, they can walk. Is there a case for making all public sector jobs appointments for say 3 years only? It is certainly one way to attack corruption. It is noticeable that some senior public servants moved when a new minister came into a department. And if the minister already had a ministerial pension, s/he might also arrange to have her previous team serve her.
Or is it that Richard Tol is disappointed that he was never lucky (!) in the civil service exams?
One of the reasons that there was widespread support for a benchmarking process was that the public service was losing quality employees to the celtic tiger. One of the Brutons said something about duds or alcoholics I recall.
One reason why private sector pay scales are not to be trusted is because lies are told in the public service, but are the rule in the private sector. Salary discussion is a no-no in the private sector. And tax evasion ensures that returns are always lower than the reality, off shore bank accounts and cash in hand being common. COMMON! Ask an FOI if you don’t believe me…. And don’t say CSO never tell fibs. We in the tax office woul ask CSO specified taxpayers for their true payroll figures etc. No-one has an idea if they are accurate. When we busted a large taxpayer, as we laughingly called them, we did not send up revised figures to CSO. We were too busy breaking another!
Any studies on this chaps? NO! Why? Because it would cause too many problems! Corruption everywhere…
The point I made was not about the coverage of the series but the meaning of the numbers reported as in employment – specifically figures in the Public Sector Employment and Earning Series are not directly comparable to figures in the QNHS series. In the former full-time equivalent figures are used for some sectors – notably Health with 111,000 full-time equivalents in employment. As job-sharing and part-time employment is high in the Health sector the actual numbers employed on the basis of the ILO definition used in the QNHS are likely to be much higher than the 110,000 reported in the Public Sector Employment and Earning Series. This also applies to the figures reported for Administrative Civil Servants and Third Level institutions.
Oops! Tom’s right and I’m wrong, for the sectors he lists. Should have read the rest of the CSO’s note. Some day, we will find out how many people work in Health…
@Pat
I was a civil servant for seven years, and one may argue that the ESRI and VU are pseudo-civil service too.
[…] have in the private sector. So the disparity has remained roughly constant. That’s according to an analysis by your friend and mine, Dr. Colm McCarthy of UCD. […]
[…] need to reduce incomes than all should be reduced All incomes are being reduced. See the data here if you’re interested in some reality. […]
[…] nominal pay cuts in the private sector were being discussed in the media. In a post on this blog, Colm McCarthy tentatively concluded, on the basis of some private surveys, that “[B]earing in mind the […]