A new analysis by the Central Statistics Office (CSO) shows that public service workers now earn slightly less than their private sector counterparts when you take account of the so-called ‘pension levy,’ plus factors like occupation, education and length of service. The figures show that, on average, public sector staff now earn 0.65% less than workers in the private sector.
However, public servants earn over 5% more than their private sector counterparts if you ignore the so-called ‘pension levy.’ The value of public sector pensions – and the contribution that public servants make towards their retirement income – is likely to be a major bone of contention in talks on a successor to the Lansdowne Road agreement, which are set to take place in the early summer.
The new data show that the gap between private and public earnings declined steadily between 2011 and 2014, in response to various changes in the two sectors during that period.
The figures take account of the January 2010 public service pay cuts and, unlike the last similar CSO study, they also include significant temporary reductions in pay for public servants earning over €65,000 a year. These were introduced in 2011 under the Haddington Road agreement.
Modest but steady private sector pay increases in the four-year period – when, aside from increments, public service pay was largely static – will also have pushed up average private sector earnings.
The almost 10% reduction in public service numbers in the years 2011-2014 will also have contributed to the relative reduction in average public service earnings. This is because staff who left were likely to have been at the higher end of their pay scales. They were either not replaced, or their replacements mainly came in at the first point of entry grades, bringing down the overall average.
The changing composition of the workforce – in both the public and private sectors – can have a significant impact on pay comparisons. But this is often ignored by commentators.
The CSO figures also reveal that the gender pay gap is much narrower in the public sector than among commercial employers. Many male public servants now earn up to 6.6% less than men in private employment, while women in the public sector earn 6.5% more than their private sector counterparts. This reflects the fact that many women in private sector employment experience very low earnings.
The stats also reveal that higher public service earners now have significantly lower incomes than similar staff in the private sector. This reflects the fact that public service pay cuts in the years between 2009 and 2011 were significantly larger for those on higher salaries, and that wage differentials between high and lower earners are much narrower in the public service than in private business.
