The gap between earnings in the public and private sectors narrowed between 2015 and 2018, despite the fact that significant restoration of crisis-era pay cuts took place in that period. A new report from the Central Statistics Office (CSO) found that, in those years, the pay differential ranged from -3.8% to +7.1%, depending on how it’s measured.
Meanwhile, pay rise projections from the union-backed Nevin Economic Research Institute (NERI) suggest that the gap may narrow again. It predicts average economy-wide pay increases of 3.6% this year. This is significantly ahead of increases under the Public Service Stability Agreement, which come in at just over 1.75% in 2019.
NERI predicts average economy-wide pay increases of almost 4% next year.
Earlier this year, Fórsa general secretary Kevin Callinan argued that the underlying assumptions of the PSSA, which governs pay across the public sector, should be reviewed to take account of lost spending power, growth rates, and pay movements in the wider economy.
In recent months he has been leading public service unions in talks with the Department of Public Expenditure and Reform (DPER) ahead of negotiations on new pay arrangements to replace the deal when it expires at the end of next year.
The CSO research shows significantly different public-private pay differentials for men and women. The differential for male workers in the public and private sectors ranges from +1% to -10.8%, depending on how it’s calculated. In other words, some methodologies show male public servants earning over 10% less than comparable private sector workers.
Women public servants earn between 3.3% and 15.8% more than their private sector equivalents.
The CSO study sets out a range of estimates of the wage differential to reflect different ways of measuring the pay gap. Unlike the data it produces each quarter, the studies take account of relevant factors like employees’ length of service, occupation and education, as well as the size of employments.
They look at a range of methodologies to reflect the fact that economists disagree on the best method to measure the public-private pay gap.
CSO statistician Morgan O'Donnell says comparing pay in the public and private sectors is not a straightforward task. “Complexity arises as the two sectors comprise of a variety of different industries, occupations and workers with differing education, experience and skill sets," he said.
Read the CSO report HERE.