Public sector earns 25pc more

cdb

According to the latest ESRI figures, public workers earn up to 25% more than those in the private sector. If benchmarking was brought in to address the differences between public and private sector pay, surely there is no excuse not to have another round of benchmarking...

Taken from today's Irish Independent.

http://www.independent.ie/national-news/pay-gap-widens-as-public-sector-earns-25pc-more-1891959.html

PUBLIC workers are now earning 25pc more than private sector employees, new figures reveal.
A new report by the State's economic thinktank published this week will reveal that the pay gap between public and private workers has widened dramatically.
The study by the Economic and Social Research Institute (ESRI) shows the average gap in earnings more than doubled from 9.7pc in 2003 to just over 21pc in October 2006.
When pensions are added in, the gap jumps a further 3pc -- to almost 25pc on average.
The report also shows the differential between the public and private sectors is higher in Ireland than in most other EU countries.
The findings will be seized upon by the Government, which is preparing to announce pay cuts for more than 300,000 civil servants, teachers, nurses, gardai, local authority staff, HSE and state body employees in the public sector.
The pay cuts will provoke a furious reaction from public sector unions.
But the Government has been left with little option as it desperately seeks to bolster the dwindling public finances, with almost three-quarters of state spending going on public sector salaries and social welfare.
Fianna Fail sources also indicated it would be slightly easier to "sell" reductions in social welfare allowances if they were accompanied by public sector pay cuts in the December Budget, which is being billed as the toughest yet.
The latest ESRI figures compare rates of pay in the civil service, education, health, defence, commercial and non-commercial semi-state bodies, and local authorities with pay in the private sector. Contrary to popular belief, the biggest pay gap is not at the top of the public service but at the lower end. In some cases, they earn up to a third more.
In other words, a typical Leaving Cert student going into the public service will earn considerably more than a student going into a similar job in the private sector.
Salaries
The ESRI study examines in detail salaries in the manufacturing, construction, wholesale, transport, financial intermediation, education (private), health (private) and other services -- and compares them with the public sector.
The sectoral analysis is carried out for both 2003 and 2006.
It updates and deepens research published at the end of last year by ESRI researchers Elish Kelly, Seamus McGuinness and Philip O'Connell.
The main differences in the new study are that it takes pensions into account and that it "drills down" deeper into more direct comparisons between employees in the two sectors. This allows for closer assessment of the extent to which wage differentials have changed over the three years.
The ESRI has shown that the pay gap widened as a result of the report of the benchmarking body, which recommended average rises of 8.9pc for the 138 public service grades examined.
The separate Review Body on Higher Remuneration in the Public Service had recommended a 7.5pc interim increase to basic salary for all the groups within its remit. Half of the increase recommended by the review body was paid out in July 2005 and the rest the following January.
Those salaries are again being reviewed for many at the top, including judges and politicians; and a further report, due shortly, is expected to recommend a reduction.
The ESRI is holding a research seminar at its offices in Whitaker Square, Sir John Rogerson's Quay, Dublin 2, at 4pm on October 8 on the theme: The Public-Private Sector Pay Gap in Ireland: What Lies Beneath?
- John Walshe

20goto10

cdb wrote: »

According to the latest ESRI figures, public workers earn up to 25% more than those in the private sector. If benchmarking was brought in to address the differences between public and private sector pay, surely there is no excuse not to have another round of benchmarking...

Taken from today's Irish Independent.

http://www.independent.ie/national-news/pay-gap-widens-as-public-sector-earns-25pc-more-1891959.html

I think it's clear there will be public sector pay cuts in the budget but I seriously doubt we're going to see 25pc. Nevertheless expect the country to be held to ransom by the communists/unions. It's going to be a bah humbug Christmas.

gurramok

Ah, its only 25pc, they deserve it.

This new research will be dished by the public sector apologists as fantasy figures!

optocynic

I am sure there is an avergae disparity today of ~ 25%, but the lower earners cannot affort to take that 25% hit, they have built lives around earning what they currently get, and some even count on the annual guaranteed increase!

The root cause if this is the unions, and the farce that is social partnership. Cuts are needed, but we need to be fair.

No more annual increases,
Further cuts for top earners (6 figures)

peasant

optocynic wrote: »

I am sure there is an avergae disparity today of ~ 25%, but the lower earners cannot affort to take that 25% hit, they have built lives around earning what they currently get, and some even count on the annual guaranteed increase!

With the exception of the annual guaranteed increase this applies to ordinary workers as well. Difference is, they have already taken that hit or lost their jobs altogether.

optocynic

peasant wrote: »

With the exception of the annual guaranteed increase this applies to ordinary workers as well. Difference is, they have already taken that hit or lost their jobs altogether.

I have to ask, taken what hit?
A 7.5% pension levy is a far cry from achieving pairity with the Private sector. Paying for your pension, in essence, is also what the rest of us need to do.

tunney

optocynic wrote: »

I am sure there is an avergae disparity today of ~ 25%, but the lower earners cannot affort to take that 25% hit, they have built lives around earning what they currently get./QUOTE]


Like the private sector workers who support them? Who have had to take the cuts already?

cdb

There will have to be cuts in public sector spending in the December budget, that goes without saying, but benchmarking is and should be a completely separate process. A reduction in the overall funding for the HSE for example will not necessarily mean a salary reduction across the board but more likely that money will not be available to renew critical contracts or pay for essential services etc.

Benchmarking is an open and shut case in that it was established to ensure parity between the public and private sector pay rates.

optocynic

tunney wrote: »

optocynic wrote: »

I am sure there is an avergae disparity today of ~ 25%, but the lower earners cannot affort to take that 25% hit, they have built lives around earning what they currently get./QUOTE]


Like the private sector workers who support them? Who have had to take the cuts already?

This I fully agree with. I am a private sector worker. However, what I am trying to point out, is the root cause of these problems.
Hypocritical Unions, and a soft/weak government = Social partnership farce!

optocynic

cdb wrote: »

Benchmarking is an open and shut case in that it was established to ensure parity between the public and private sector pay rates.

So, why not attempt to achieve parity again?
Must benchmarking for the Public sector only be a one way street?

cdb

optocynic wrote: »

So, why not attempt to achieve parity again?
Must benchmarking for the Public sector only be a one way street?

My point exactly.

Amhran Nua

cdb wrote: »

A reduction in the overall funding for the HSE for example will not necessarily mean a salary reduction across the board but more likely that money will not be available to renew critical contracts or pay for essential services etc.

This is exactly the kind of gun to the head attitude that gets people up in arms agains the public sector unions.

Don't get me wrong, even if we fired everyone in the public sector, we wouldn't break even on the budget, the net must be cast wider and further, but comments like the above will ensure that no even handed approach gets taken.

ParkRunner

Given the fact that these figures are 3 years old now and things have changed so much in both the private and public sector, is there any value at all in this report? Surely it cannot be relied upon to justify anything

jimmmy

EF wrote: »

Given the fact that these figures are 3 years old now and things have changed so much in both the private and public sector, is there any value at all in this report? Surely it cannot be relied upon to justify anything

I agree. In the past three years the gap has widened even more.
There was another report a few months ago showing public sector pay 50% more than private sector pay....this took in to account the shorter working week of the average public sector worker, the number of hours worked per year etc.

joolsveer

I had a look at the link but there are no figures in it to justify the claim made in the headline. Who are they comparing? If you compare salaries of the public service from porter to CEO with people employed on the "factory floor" you will always get a disparity. I would like to see the underlying statistics first before coming to a conclusion.

I am not employed in the public service.

P. Breathnach

jimmmy wrote: »

I agree. In the past three years the gap has widened even more.
There was another report a few months ago showing public sector pay 50% more than private sector pay....this took in to account the shorter working week of the average public sector worker, the number of hours worked per year etc.

Welcome back from your suspension jimmmy. Can we have a citation for this other report? Is it, perchance, a journalist's rant?

jimmmy

"The study by the Economic and Social Research Institute (ESRI) shows the average gap in earnings more than doubled from 9.7pc in 2003 to just over 21pc in October 2006.
When pensions are added in, the gap jumps a further 3pc -- to almost 25pc on average. "

joolsveer wrote: »

I had a look at the link but there are no figures in it to justify the claim made in the headline.

You think the ERSI plucked the figures out of the air in 2006 earnings ?

Pity they did not base them on 2009 earnings, and factor in the differences in hours worked etc.

SkepticOne

Wasn't benchmarking supposed to do this sort of analysis to ensure public sector was in line with private sector? Another scandal yet to be exposed is how this process was abused. Benchmarking was nothing more than a cynical veneer of objectivity covering a vote buying exercise of a weak government awash with revenue from an unsustainable credit boom.

skelliser

the pension levy was a paycut, plain and simple for the people i know in the ps it was a simple paycut.

I dont work in the public service. This article however says that the lower grades are were the gap is widest. Here we go again, massaging the public, especially lower paid for the upcoming cuts in the budget.

the entry point for a clerical officer is €23,174. Is the ESRI suggesting that clerical staff in the private sector are working for €15,450?

optocynic

skelliser wrote: »

the pension levy was a paycut, plain and simple for the people i know in the ps it was a simple paycut.

I dont work in the public service. This article however says that the lower grades are were the gap is widest. Here we go again, massaging the public, especially lower paid for the upcoming cuts in the budget.

the entry point for a clerical officer is €23,174. Is the ESRI suggesting that clerical staff in the private sector are working for €15,450?

The pension levy was NOT a pay cut... they are simply being asked to contribute to their guaranteed pension.
Like the rest of us private sector saps do, and have done for decades.
If you are getting it in the future, it is not a cut... it is a deferal!

No one in the private sector want the (productive) lower earners pay cut...
We are not obtuse monsters...
We simply want a good vcalue for money public service.. and the fabled social partnership we heard so much about from O'Connor...

skelliser

well this report seems to highlight them the most.

and sorry but the pension levy is a paycut, there not contributing to there pensions at all. people i know in the ps have said over and over again they wont see that money in there pensions.
FACT.

I too want a proper public service, best way i can see is start with the hse, thousands of middle management need to be axed, they clog up the system and take away from frontline services. Nurses looking for 32 hour weeks ffs! are these people mad! i still dont get why they even brought in a degree for nursing, oh wait so they can justify gettin paid more. degree in nursing, nonsense imo.

HSE lower to middle management needs to be savaged imo, to begin with.
Garda and teachers next, i know teachers who bought second houses during the boom ffs

Deadalus

This is complete fiction from my experience. And yes I will start by saying quite openly that I am a public servant and have been for nearly a year now. I earn €24,500 a year even though before joining the public service I earned €33,000 for doing the same job as a private company contractor. I already took my pay hit for job security. What else do you want me to give back!!!! If any more pay cuts are imposed on me I will simply quit and join the dole because after commuting expenses and such I will be no worse off. I seriously doubt there is a private sector working doing my job for 30 percent less than what I am being paid. This article is complete rubbish.

jetski

I work in public sector too. ill be quitting if i get another pay cut too. wont be worth my effort working for the money. its that simple.

doncarlos

optocynic wrote: »

The pension levy was NOT a pay cut... they are simply being asked to contribute to their guaranteed pension.
Like the rest of us private sector saps do, and have done for decades.
If you are getting it in the future, it is not a cut... it is a deferal!

The pension levy is a paycut. That money is dead money that contributors will never see. The reason that a "levy" was introduced and not paycuts was that paycuts would result in existing PS retires having their pensions reduced.

Think of it as working in a private company and given a company car. The company turns around and says ok we're not gonna cut your wages but we're going to charge you €200 a month for the use of the car whether you want it or not.

jimmmy

optocynic wrote: »

The pension levy was NOT a pay cut... they are simply being asked to contribute to their guaranteed pension.

And about time too. Its beyond scandalous the pension pots of p.s. people retiring in the past few years, considering what they ever paid in to their pension.

tunney

jetski wrote: »

I work in public sector too. ill be quitting if i get another pay cut too. wont be worth my effort working for the money. its that simple.

Perfect, pay reductions and head count cuts!

TheInquisitor

Deadalus wrote: »

This is complete fiction from my experience. And yes I will start by saying quite openly that I am a public servant and have been for nearly a year now. I earn €24,500 a year even though before joining the public service I earned €33,000 for doing the same job as a private company contractor. I already took my pay hit for job security. What else do you want me to give back!!!! If any more pay cuts are imposed on me I will simply quit and join the dole because after commuting expenses and such I will be no worse off. I seriously doubt there is a private sector working doing my job for 30 percent less than what I am being paid. This article is complete rubbish.

jetski wrote: »

I work in public sector too. ill be quitting if i get another pay cut too. wont be worth my effort working for the money. its that simple.

Good less money to pay ye ingrates. I just hope they cut the dole aswell.

Riskymove

SkepticOne wrote: »

Wasn't benchmarking supposed to do this sort of analysis to ensure public sector was in line with private sector? Another scandal yet to be exposed is how this process was abused. Benchmarking was nothing more than a cynical veneer of objectivity covering a vote buying exercise of a weak government awash with revenue from an unsustainable credit boom.

I agree with your comments about benchmarking but I must once more point out an important fact when comparing benchmarking and this latest report

benchmarking (allegedly) compared public sector jobs to a comparable job in the private sector

this latest report (and most like it) are based on an average of ALL public sector jobs and ALL private sector jobs.

the 2 systems are never going to produce similar results and cannot really be compared..not that it stops the media from doing so

jimmmy

It will be good to see some p.s. people trying to survive on the sort of income many in the private sector survive on. At least the p.s. sector can get the dole....many a self employed person ( who now finds themselves not even making the few hundred a week the dole is ) cannot.

Riskymove

jimmmy wrote: »

It will be good to see some p.s. people trying to survive on the sort of income many in the private sector survive on. At least the p.s. sector can get the dole....many a self employed person ( who now finds themselves not even making the few hundred a week the dole is ) cannot.

I am glad you will pleased to see people struggling jimmy, at least the current situation can make some people happy:rolleyes::rolleyes:

how charming

jimmmy

Riskymove wrote: »

I am glad you will pleased to see people struggling jimmy,

I am never pleased to see people struggling ; however, the greater good of the country would be served if our public service were not the highest paid in the known world....if their wages came down to realistic levels then I think less people will struggle in the long run.

Riskymove wrote: »

at least the current situation can make some people happy:rolleyes::rolleyes:

its making the p.s. happy, thats all. And those retired from the p.s., who got the tax free windfall and 50% pension.

jetski

jimmmy wrote: »

I am never pleased to see people struggling ; however, the greater good of the country would be served if our public service were not the highest paid in the known world....if their wages came down to realistic levels then I think less people will struggle in the long run.


its making the p.s. happy, thats all. And those retired from the p.s., who got the tax free windfall and 50% pension.

You really are a dumb F*ck, i hope u know that. you dont have a breeze about what ur talking about.

P. Breathnach

jetski wrote: »

You really are a dumb F*ck, i hope u know that. you dont have a breeze about what ur talking about.

That's overstating it, although not by much. Take jimmmy seriously whenever he learns to back up what he says. I am waiting for a citation in support of his last big claim.

SkepticOne

Riskymove wrote: »

this latest report (and most like it) are based on an average of ALL public sector jobs and ALL private sector jobs.

the 2 systems are never going to produce similar results and cannot really be compared..not that it stops the media from doing so

Not according to the article:

The main differences in the new study are that it takes pensions into account and that it "drills down" deeper into more direct comparisons between employees in the two sectors. This allows for closer assessment of the extent to which wage differentials have changed over the three years.

NewDubliner

tunney wrote: »

Perfect, pay reductions and head count cuts!

That should really help the retailers & restaurants this Christmas.

Liam Byrne

optocynic wrote: »

the lower earners cannot affort to take that 25% hit, they have built lives around earning what they currently get, and some even count on the annual guaranteed increase!

Meanwhile, back in the real world, lower earners in the private sector can't afford to take the "take it or leave it" pay reductions or reduced hours or layoffs, having "built lives around earning what they currently get"...

The reason ? Those paying the wages can't afford to.

And we're the ones paying the wages of the public sector, so that equally applies.

So your point is ?

Trampas

Unless the figures are published I would be taking this report with a pinch of salt.

Someone in the public sector for 20+ years and someone there 6 months will be on different wages and the report doesn't take this into account.

The public sector needs to get rid of the people in there decades cause you will probably find they are getting paid a fortune and could be easily replaced by someone on about 1/2 or a 1/3 of their wage.

nesf

Trampas wrote: »

Unless the figures are published I would be taking this report with a pinch of salt.

Someone in the public sector for 20+ years and someone there 6 months will be on different wages and the report doesn't take this into account.

The public sector needs to get rid of the people in there decades cause you will probably find they are getting paid a fortune and could be easily replaced by someone on about 1/2 or a 1/3 of their wage.

The ESRI report will be published. The part to take with a pinch of salt is the comment by the journalist.

Beasty

Trampas wrote: »

Someone in the public sector for 20+ years and someone there 6 months will be on different wages

Why? - surely they should get paid the same if they are doing the same job (assuming they have the same qualifications and experience). I can see an argument for a small premium for loyalty, but if people get paid more simply for years of service this highlights even more the problems with the current arrangements

mickman

guys in all fairness. the current govt dosent have the guts to cut public sector pay. if they had why dont they have it done already, the strikes would be out of the way by now.

do ye honestly think they will cut another 10%

skelliser

Beasty wrote: »

Why? - surely they should get paid the same if they are doing the same job (assuming they have the same qualifications and experience)

lol! clutching at straws there man, how can someone in a job 6 months have the same experience as someone there 20+ years!

jetski

you just contradicted yourself mate.

and yes they have already cut public sector pay.

Ally Dick

You can thank Bertie Ahern for this mess. He awarded 20% benchmarking to the public service. That goes some way to explaining the 25% in the latest survey

skelliser

mickman wrote: »

do ye honestly think they will cut another 10%

i reckon they will go for a sliding scale of 8%, something similar to the pension levy PAYCUT.
cut the dole and community employment schemes, double payments to the same levels probably around ~190euro. child benefit will be taxed.

Beasty

skelliser wrote: »

lol! clutching at straws there man, how can someone in a job 6 months have the same experience as someone there 20+ years!

Someone who has done a similar job in the private sector and gained the necessary experience there (and the necessary levels of experience can vary enormously from job to job)

skelliser

Beasty wrote: »

Someone who has done a similar job in the private sector and gained the necessary experience there (and the necessary levels of experience can vary enormously from job to job)

oh right, i remember now all those private sector people queing up in there thousands during the boom years to get into the public service. lol!
outta my way ps worker im from the private sector!

irish_bob

optocynic wrote: »

The pension levy was NOT a pay cut... they are simply being asked to contribute to their guaranteed pension.
Like the rest of us private sector saps do, and have done for decades.
If you are getting it in the future, it is not a cut... it is a deferal!

No one in the private sector want the (productive) lower earners pay cut...
We are not obtuse monsters...
We simply want a good vcalue for money public service.. and the fabled social partnership we heard so much about from O'Connor...

perhaps we dont want those at the bottom to see wage cuts but we need to see a shed load of them let go

jetski

apperantly its going to be 10% over 3 years....

irish_bob

nesf wrote: »

The ESRI report will be published. The part to take with a pinch of salt is the comment by the journalist.

the part to take with a pinch of salt is the figure of 25% pay differential they came up with , this figure is based on what was happening before the bust , the figure now is most likely closer to 40%

podge3

Ally Dick wrote: »

He awarded 20% benchmarking to the public service. That goes some way to explaining the 25% in the latest survey

No actually, he didn't.

You obviously source your facts from the same place as Jiimmmyyyy.

Time Magazine

EF wrote: »

Given the fact that these figures are 3 years old now and things have changed so much in both the private and public sector, is there any value at all in this report? Surely it cannot be relied upon to justify anything

Things have not changed all that much in the past three years. Public sector pay increased by about 6% in 2008, and then the pension levy essentially removed that. Private sector pay increased over the past three years, then the recession pretty much removed that. 25% is as good a rough figure as you'll get.

jimmmy wrote: »

There was another report a few months ago showing public sector pay 50% more than private sector pay....this took in to account the shorter working week of the average public sector worker, the number of hours worked per year etc.

The 50% report was using statistics so simplistic it was misleading. It took into account the hours worked but not education, experience, whether the position is supervisory, etc.

joolsveer wrote: »

I had a look at the link but there are no figures in it to justify the claim made in the headline. Who are they comparing? If you compare salaries of the public service from porter to CEO with people employed on the "factory floor" you will always get a disparity. I would like to see the underlying statistics first before coming to a conclusion.

I am not employed in the public service.

It uses data on 32,000 people both public and private. The paper is here. You'll need a good training in economics/statistics to understand it so I'll provide a rough summary. It controls for and captures the effect of:
1. Public Sector/Private sector
2. Gender
3. Experience
4. Experience squared (going from 1-2 years' experience is more beneficial than 21-22)
5. Lower Secondary Education
6. Higher Secondary
7. Post Secondary
8. Third-Level Non-Degree
9. Third-Level Degree
10. Supervisor
11. Professional Body Member
12. Shift-work
13. Weekly Hours
14. Overtime Hours
15. Type of work

jimmmy wrote: »

Pity they did not base them on 2009 earnings, and factor in the differences in hours worked etc.

They did factor in hours worked.

optocynic wrote: »

The pension levy was NOT a pay cut.

Yes it was.

Deadalus wrote: »

This is complete fiction from my experience... This article is complete rubbish.

It uses data from tens of thousands of people and controls for just about everything you could imagine - type of work, education, experience, hours worked, union membership, etc. No offence, but I take this as hard-evidence and your experience as an anecdote. My personal anecdote, having been employed by both a State agency and a semi-State body, is that pay here far exceeds the private sector. Graduate level economist jobs start on €34k in the public sector with job security and a €3k increase every year. My best friend tells me Bank of Ireland's highest entry graduate wage is €30k, on an eighteen month contract, with (rightly) no pay increases for anyone because of the state of the company. And Bank of Ireland aren't exactly scabby with wages.

Riskymove wrote: »

the 2 systems are never going to produce similar results and cannot really be compared..not that it stops the media from doing so

Everything I can think of that might make a difference (listed above) is controlled for.

Trampas wrote: »

Unless the figures are published I would be taking this report with a pinch of salt.

Link provided above.

Someone in the public sector for 20+ years and someone there 6 months will be on different wages and the report doesn't take this into account.

Yes it does.

jetski wrote: »

and yes they have already cut public sector pay.

Yep, they cut it by about 7%. But the difference is 25%, so it's foolish to imagine that the levy is some sort of cure.