That aside, what we do is record wage settlements, in a similar way to Incomes Data Services (IDS) in the UK. Both ’sides’ of industry have to rely on our accuracy in this regard

On the IBEC survey, you can check it yourself. It is all freely available on their website (IBEC Business Sentiment Survey, conducted during May 2009. The survey is based on a large sample of about 2,500 IBEC members, weighted by sector and firm size. The response rate was 20%. While the respondents are probably slightly more representative of manufacturing than of services, about half of them have less than 50 employees.) IBEC membership is at least 50% non-union at this stage, if not more. They have more detail on management pay which you might find interesting as well as on ’salaried’ staff. I have provided a snap shot of their survey on the free EU funded service http://www.eurofound.europa.eu/eiro/

Other recent surveys of interest include the Hay Group. You can contact them directly.

What is important is to get an accurate picture of what is happening, and to be sure we understand the difference between a fall on overall remuneration (which is certainly happening) and an actual cut in salary (more limited so far). That difference is missed in much of the rather glib coverage of this issue. Pay freezes, whether formally announced or, de facto, predominate in all sectors.

that’s interesting, thanks. It’s hard to know how representative the IBEC surveys are. For example, the current one shows an average decrease of 4% in Management pay in the six months to May, whereas CSO shows (for industry) a rise of 10.5% in the six months to March; for Finance, the rise in base pay is 2.7%. That’s quite a difference, even taking the timing difference into account.

Of course, it’s not impossible that both IBEC and CSO are right at the same time. It could be that composition effects within occupational groups could reconcile the two. For example, say that all the production workers who lost their jobs were the lowest paid ones. Then average pay amongst the remainder will increase even with pay freezes, and may even still increase a bit if some workers are having pay cuts. Without knowing the details of the earnings distribution, it’s hard to know if this is what’s going on, but I’d be surprised. There haven’t been cuts in numbers employed in Managers and Clerical according to CSO, so that explanation won’t work there. I suspect that pay cutters are much more likely to respond to these surveys and that’s the explanation.

On the other hand, I would expect pay cuts to be less frequent in unionized firms, so the fact that you at IRN are seeing any cuts being reported is interesting. Do you have any breakdown by date, sector, occupation, firm size etc. that you could give?

Your point on media pay cuts affecting the reporting of what’s going on is well taken.

I refer you to recent IBEC survey of member firms - see their website. It shows more marginally production workers getting pay rise over those suffering pay cut. but vast majority of all worker categories having pay frozen. In IRN (Industrial Relations News) these figures come as no surprise. We largely cover the unionised sector and report only verified pay settlements (confirmed with company and union). The IBEC survey tallies with our findings and with the CSO trend. Colm McCarthy’s prognosis may well turn out in the end, but it hasn’t happened yet. The core message is: while incomes are down, basic pay is being frozen in most places, and pay cuts and rises are about equal. It is important to note that major media organisations -like RTE, Irish Times, Independent - have introduced pay cuts with formal staff agreement (note: a legal requirement) and this could be influencing the overall tenor of reporting about ‘everyone’ suffering pay cuts in private sector.

The Irish Times headline apart (which is based on net pay and therefore more a factor of the low direct tax here) it is a very good and comprehensive report, well worth a look for anyone looking for international price/wage comparisons.

As for overall costs in Ireland, I’m typing this while on holiday in Bejing. Wages here are clearly much lower than in Ireland. But, eating and drinking in restaurants is about the same, while hotel accomodation is more expensive. Other purchases, such as CD players and digital cameras, were also at least as expensive as in Dublin.

Not to mention that many firms will cut salaried staff and rely on their managers’ unpaid overtime to pick up the slack.

Can also be used to compare different topics. For example comparing ‘irish economy’ with ‘fianna fail’ produces this result: http://tiny.cc/HZxOE

Google have a lovely feature to track any search on a timeline, which I only happened upon recently. Do the following:

> Search Google for “Pay cuts ireland”
> Click on “Show Options”
> On the left margin click on “timeline”
> Click on the most right-hand part of the timeline (from 2000 onwards).
> Click on the most right-hand part of the timeline (from 2009 onwards)

The resulting graph shows you that web mentions of pay cuts in Ireland peaked in February, and was noticably lower in Q2, though picked up again somewhat in July. I’m not sure if this proves anything, though its a lot of fun.

The figures aren’t as jumpy as they first appear. The Q4 2006-Q1 2007 rise is probably due to the 8.5% increase in the minimum wage on 1st January 2007.

After that, the figures are actually fairly stable from Q1 2007 to Q3 2008, after which they fall sharply, coinciding with the sharpest rise in the rate of unemployment (and <25 unemployment in particular). The rate of increase in the minumum wage over this time at 4.2% is in line with the rest of the economy. As such, I think an inference that layoffs dominate this fall in the number on the minimum wage is pretty convincing. the big argument for me is why they were laid off in such greater numbers (nature of contract, particular industry, the level of the minimum wage etc).

A related point is how the SMEs that employ so many people around the country are captured.

Lastly, I would suggest that hourly is not always the best benchmark, as hours actually worked are captured so poorly. Surveys should ask whether wages are paid on a hourly basis or on an annual/monthly basis.

No where where I’ve worked have the salaried staff clocked in and clocked out so hard to see how the hours are accurate.

My experience on pay is employers have frozen pay i.e no increases, bonuses are gone but some were paid for 2008 - it wasn’t a total disaster. (2009 might be depending on how the second half works out). Most have shed jobs to save payroll - cutting pay is a last resort and they will cut numbers again before doing that.

As I’ve argued previously cutting numbers or hours increases productivity by default. Cutting pay doesn’t.

@GrowUp, if the extra hours your friends are working during the four days are accurately recorded by management when filling in the CSO survey, then this will show up as a cut in hourly wage. It is an interesting question, though - Ronnie touched on this too - as to how accurately hours of work are recorded in many workplaces. I guess that contracted hours are recorded in many places, rather than actual hours, in which case your comment will stand. Nonetheless, there is a noticable drop in hours in all sectors in Q109 compared to any of the previous four quarters, even for managers/professionals, so some changes are certainly being recorded.

@Ronnie O’Toole: I find the proportion on the minimum wage impossible to interpret. There are pretty substantial variations from quarter to quarter, some of which must be seasonal, but the rest could be due to either redundancies of minimum wage workers or pay rises lifting them off the minimum. I think the only way to look at this is with panel data like the NES.

[@Colm, the Carrowaystick is a pretty river in the Glenmalure Valley in Wicklow, known to anyone who's climbed Lugnaquilla from that side].

The 0.5% figure I mentioned would be over two years, or around 0.2% per annum. However this obviuosly only scratches the surface of what is happening in terms of composition.

Friend: 10% cut on fixed salary, implemented in April 2009. (area: construction)
I could go on and on and on…..

Also don’t forget that a very significant portion of the workforce in engineering/construction are “self employed” or on C2’s. How would cuts affecting this sector of the workforce feed into the CSO stats?

The same releases shows that the number of workers reported on the national mimimum wage has plummeted, from around 12,000 in Q1 2007 to less than half that (5,600) by Q1 2009. This says something about compostioinal changes referred above. In aggregate for B-E industries, this is a fall from 2.5% of the workforce to 1.4%, which would add the guts of 0.5% onto the computed average wage, even in the absence of any change in actual wages. This is a fare estimate as the minimum wage rose at around average wage level during this time. This is also a very interesting input into the difficult debate on the minimum wage, and will be confidently be used by both sides no doubt!

Less importantly, I wonder whether a survey like this is useful in estimating the actual hours worked. While in the past this might have been easily measured, I suspect in many enterprises, the ‘clock-in/clock-out’ procedure has vanished, and most companies don’t know how long their workers work. Do most MNCs report 37.5 hour weeks, every quarter?

When were the national agreement talks concluded? Q408, when ibec and the govt agreed to pay rises. so there would probably not have been many cuts in Q109.
Also a lot of companies have annual salary reviews which kick in at the start of a year, which would have been decided in the pre-xmas timeframe. I’d imagine q2 figures would show a different point of view.

In areas where there are those roadblocks - ie significant union presences protecting wages or the “protected” occupations noted by Frank Galton above I doubt that any significant wage drops will happen this year, if at all. The news is dominated by the various skirmishes on that front but none that I’ve seen have resulted in wage cuts in real terms. However elsewhere I can’t see how there cannot be be significant reductions by the end of H1 09 when those numbers come out. While I can only point to personal (clearly anecdotal) experience in this area the numbers that I see in my field relating to the charge out costs of highly skilled staff, who are not protected by institutional closed shops or professional structures, have dropped significantly and I cannot believe that employers in those fields are universally taking the hit without passing that through to their workers.

It may be that some companies are finding it possible to eliminate under performing staff and maintaining competitiveness through the higher productivity of the remainder without cutting wages but I can’t see that a company that is managed well enough to pull that off would sit by and not attempt to execute wage cuts during what is likely to be the first period of time in our memory when widespread wage cuts are possible.

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Wages here are laughably small compared to the UK, Switzerland and the USA - three markets whose wages I’m familiar with. For skilled workers, pay here is low enough compared to those markets that workers require non-economic reasons to stay in this market.

I already know a number of people who have left Ireland for jobs with higher wages and better conditions. If wages are dropped further, why should skilled workers stay?
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I’m from the States and have lived here 11 years. In that time I’ve probably lost $300k in salary over that time compared to my American peers. It’s hard to tell exactly since I work in slightly different areas, but that’s a rough estimate.

I know many people who have compared jobs in Dublin and London or Dublin and Zurich and found large enough differences to justify moving themselves and their families. And those are Dublin wages - outside of the capitol you’ll find even larger wage differences.

I would suggest that Irish wages are depressed more than enough already - in fact I would argue that we are actually losing talent at this wage level. I’m not sure if you’ve noticed but labour can move now. Low wages will not attract the skilled workers we need.

I would also suggest that there are other factors to consider besides wages when considering competitiveness. A nation with poor infrastructure, poor public services and a large swath of underpaid morlocks is not a nation where the next great ideas are likely to come from.

Stephen’s links are interesting in this regard. For most Irish manufacturing workers, wages are not so sticky. For those at the upper end of the enterprise food chain, they are not only sticky, they are growing.

Whatever the explanation, clearly from this, admittedly limited time span, some people are sharing the pain, some are not.