Economic analysis:Public sector pay rose 31% in the last five years, writes Paul Tansey,Economics Editor.
The weekly earnings of public sector employees working outside the health sector have increased by €222 a week or by almost one-third since 2002, when the first benchmarking report was published.
As a result of benchmarking pay awards, the average weekly earnings of public sector employees have risen faster than the average pay of workers in manufacturing, construction, banking, distribution and business services over the past five years.
At June 2007, the 254,000 public sector employees working outside the health sector collected average weekly earnings of €926.64. This represented an increase of 31.6 per cent on the average weekly earnings of €704.28 paid to such workers in 2002.
These earnings include wages and salaries, overtime pay, regular bonuses and commissions, holiday and sick pay. The public sector workers covered include civil servants, gardaí and Defence Forces, local authority employees, those working in the public education sector and employees of State-sponsored bodies.
An additional 111,600 public sector workers were employed in the health sector at June 2007. However, the average earnings of public sector health workers are unknown, with the Central Statistics Office restricting itself to the comment that for such workers, "earnings information is not available at present".
The first benchmarking pay award averaged 8.9 per cent and was paid to public sector workers in three phases over the years 2003 through 2005. Benchmarking awards were paid to public sector workers in addition to basic wage increases delivered under national pay agreements. Trends in the average weekly earnings of public sector employees, excluding health workers, is shown in Table 1 for the years since 2002.
As can be seen from Table 1, annual rates of public sector pay growth peaked in 2004 and 2005 as the bulk of the benchmarking awards were disbursed, topping up the basic wage increases paid out under the national pay agreement, Sustaining Progress.
Turbo-charged by the benchmarking awards, the average weekly pay of public sector workers has risen faster than the rate of earnings growth in any other sector of the non-farm economy over the past five years.
As shown in Table 2, the average weekly earnings of public sector employees in 2007 were higher in absolute cash terms and had risen faster in the preceding five years than the earnings of any other major group of employees in the economy.
By June 2007, the average weekly earnings of public sector employees was more than half as high again as the weekly earnings of average manufacturing workers. In 2002, the average weekly earnings of skilled operatives in the construction sector were higher than the average earnings of public sector workers. By 2007, public sector workers were earning more, on average, than skilled construction operatives.
Together, the construction, manufacturing, distribution and business services sectors employed a total of 860,000 workers at June 2006. In broad terms, employees in these sectors achieved average gains in weekly earnings of about 25 per cent over the past five years. With additions of 31.6 per cent to their average weekly pay packets over the past five years, this has left public sector employees at the top of the earnings tree.
Table 1: Public sector: Weekly earnings - 2002-2007
Ave weekly % inc ... Numbers*
2002...... €704.28 - ............. 235,700
2003...... €734.86 + 4.3% ... 239,800
2004...... €797.09 + 8.5% ... 242,400
2005...... €844.16 + 5.9% ... 245,900
2006...... €882.02 + 4.5% ... 249,100
2007**.. €926.64 + 5.1% ... 254,000
2002-07+ €222.36 + 31.6% + 7.8%
*Excludes health workers. Aer Lingus workers excluded from 2006;
**June 2007. Pay data for June is close to the annual average for year.
Source: 'Public Sector Employment and Earnings' series, CSO.
Table 2: Trends in average weekly pay by economic sector: 2002-2005
EMPLOYEE GROUP ... 2002 ..... 2007* ..... % increase
Public sector** .............. 704.28 ... 926.64 ... + 31.6%
Banking, insurance &
building societies ............ 686.91 .. 886.34 ... + 29.0%
Distribution &
business services ............ 563.58 .. 708.57 ... + 25.7%
Construction &
unskilled workers ........... 632.53 .. 790.40 ... + 25.0%
Manufacturing ................ 483.02 .. 600.24 ... + 24.3%
Construction &
skilled operatives ........... 759.16 .. 909.23 ... + 19.8%
*June 2007;
**Excluding public health workers.
Sources: Earnings surveys 2002-2007, Central Statistics Office.