Does evidence suggest Garda pay claim stacks up?

The industrial action threatened by the Garda poses a serious threat to the Lansdowne Road agreement and efforts to contain public sector pay.

Since the financial crisis in 2008, public servants have paid increased pension related deductions averaging 7 per cent of total salary and experienced substantial pay cuts in 2010 and 2013 in the region of 5 per cent to 15 per cent. While the Lansdowne Road agreement (2016-2018) offers marginal increases in take home pay for all public servants earning in excess of €15,000, this increase is weighted in favour of the lower paid, who are due to receive a significantly higher percentage increase.

However the key issue for public servants is the restoration of the earlier pay cuts. Under the agreement, restoration of remuneration lost to the pay cuts will occur over a period stretching from 2017 to 2019, depending on improvements in the public finances. The agreement provides a degree of stability and predictability to the present and future cost of public sector pay to the exchequer.

Yet the threatened industrial action of the Garda Representative Association (GRA) in seeking increased pay could potentially undermine the agreement and trigger a series of pay claims throughout the public sector.

Grievances

Garda grievances over pay could possibly be justified on the basis that levels of Garda pay are relatively meagre compared to other workers in the public sector. Yet Garda average weekly earnings are higher than any other area of the public sector and well above the overall average. However, unlike most other areas of the public sector, weekly Garda earnings declined between 2011 and 2016 and this may account for a sense of grievance among the rank and file.

Given that gardaí work much longer hours than any other group of public servants, it could be argued that a fairer comparison of earnings is average hourly earnings. Even on this measure Garda average hourly earnings are the second highest behind education. The high average hourly earnings in education is partially explained by the low number of hours worked per week in that sector. Garda average hourly earnings increased slightly between 2011 and 2016 while the average declined for the total public sector.

Thus on both weekly earnings and average hourly earnings, there is no evidence that gardaí are at a disadvantage compared to other sectors. Indeed the evidence indicates a comparative advantage, particularly in weekly earnings. Leaving aside pay comparisons, the GRA has emphasised the difficult and challenging nature of the work. This raises the traditional arguments regarding differential pay levels both within and between occupations and positions in the public sector.

Generally pay rates for workers employed directly by government to provide public services in areas like administration, education and health are compared with the pay rates of workers employed in the traded or private sector of the economy, and more recently with public servants in other European Union countries. In the absence of market forces government lacks a clear pricing mechanism to guide pay setting in the public sector. Consequently it is difficult to calculate a market evaluation of the output of workers engaged in the provision of the services provided by government.

Crucial factor

The level of public sector compensation is a crucial factor determining both the competency and efficiency of government services. Too high a level wastes the resources of government, increasing the burden to taxpayers, while too low a level makes it difficult for governments to attract workers of the quality needed to provide quality services.

Estimating pay levels for the Garda force is particularly challenging, as there are no comparable occupations in the private sector. The function of the proposed Public Services Pay Commission is precisely to engage with these issues of pay levels and comparability between the public and private sectors. Strategically it is envisaged that the findings of the commission will contribute to the development of pay strategy in the public sector when the Lansdowne Road agreement expires in 2018.

However, should the Garda pay claim be successful, it is likely that other public sector unions will seek pay rises for their members above those agreed under the Lansdowne Road agreement. In that event the agreement is likely to unravel, putting pressure on the public finances and rendering the work of the pay commission to develop a fair and systematic approach to pay levels in the public sector more arduous.

Dr Tom Turner is associate professor at the Kemmy Business School of the University of Limerick