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Huh? What’s that the CSO says about earnings? Seems a bit off message. November 20, 2009

Posted by WorldbyStorm in Economy, Irish Politics.
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Figures, released today from the Central Statistics Office (CSO), reveal

…hourly earnings including irregular bonuses rose 4.2 per cent from €20.35 to €21.20 per hour in the second quarter of this year.
Hourly earnings including irregular bonuses in the financial sector fell by 11.9 per cent, from €32.96 to €29.03 per hour during the same period.
The drop was due mainly to a fall of 69 per cent in irregular earnings which fell from €5.90 per hour in second quarter of 2008 to €1.83 in 2009.
Average hourly earnings including irregular bonuses and payments for managers, professionals and associated professionals in the industrial sector rose by 0.4 per cent over the year from €30.88 to €31.01.
Earnings increased by 1.8 per cent, from €20.41 to €20.78 per hour, over the same period for clerical, sales and service employees. They rose 3.7 per cent from €16.53 to €17.14 per hour for the production, transport, craft and other manual workers.

Depressingly…

More than 21,000 people working in the industrial sector lost their jobs in the 12 months to June of this year, according to the official data.
The figures, released today from the Central Statistics Office (CSO), reveals the numbers employed in the sector fell from 232,600 to 211,300 during the 12 month period.
The decrease was primarily among the production, craft and manual workers, which saw a fall of 17,700, while clerical, sales and service employees dropped by 2,900.

On wages a similar phenomenon was experienced earlier in the Summer to the consternation of some.

Comments»

1. Pidge - November 20, 2009

Considering that lower earners tend to be the first to go, I’m surprised the average wage increase isn’t much higher.

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Proposition Joe - November 21, 2009

Yep, its funny how there are good averages and bad averages, depending on whether the stats support the case one is making.

The income distribution across the lost jobs has to be compared with the initial income distribution in general, before any conclusions can be drawn as to whether these data show widespread pay-cuts on an individual level or not.

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2. alastair - November 21, 2009

Bit of selective quoting at play there.

Earnings increased by 1.8 per cent, from €20.41 to €20.78 per hour, over the same period for clerical, sales and service employees. They rose 3.7 per cent from €16.53 to €17.14 per hour for the production, transport, craft and other manual workers.

The CSO figures also showed the average weekly paid hours in industry decreased by 1.3 hours a week, or 3.4 per cent, from 38.5 hours to 37.2 hours from the second quarter of 2008 to the same period of 2009.

So – average earnings (per hour) rose by 0.4 / 1.8 / 3.7 per cent, but working hours were reduced by 3.4 per cent. Which would mean that manual workers were the winners in the take home pay growth charts with a massive increase of .19%. And thats not forgetting the ongoing private/public sector gap in average earnings. Who’s faring the least worst by any measure?

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3. alastair - November 21, 2009

It’s also instructive to look at the earnings curve compared to the first quarter of this year as opposed to the same quarter last year – 4.8% drop since quarter 1 this year.

You could posit that 2008 layoffs meant that average earnings rose initially – on the back of lower paid workers being the first to lose jobs, and now wages and overtime cuts are coming into play for the remaining employees. Certainly the recent income tax revenues (13% down on targets/projections), when compared against the live register, indicate that there’s actual and measurable (as opposed to averaged) drop in income at play.

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4. alastair - November 21, 2009
5. Tomboktu - November 30, 2009

SIPTU has issued a report on this:

Siptu attacks public pay ‘myths’

The debate on pay rates in the public and private has been undermined by the “deliberate misrepresentation” of earnings data by several leading commentators including the Economic and Social Research Institute (ESRI), the State’s largest trade union has claimed.

Siptu today published its own research on wage differentials between the sectors which it said dispelled the “myth and lies” surrounding public servants’ pay, and showed private sector managers benefited most from the boom.

According to the research – Separating Fact from Fiction on Earnings: The Use and Abuse of Statistics- private sector managers have seen their pay jump by approximately 40 per cent since 1998, while average public sector salaries, when the pension levy is included, has risen only 17.6 per cent.

In the more recent period since December 2005, the report suggested public sector workers had received pay increases of 12 per cent, while managers in the private sector enjoyed increases of 13.5 per cent, with manual workers in the private sector receiving increases of only 5.4 per cent.

When inflation and the pension levy, imposed on public servants in March, are taken into account, the only group whose wages exceeded inflation was private sector managers, the study said.

An ESRI report, published in September, found that public sector workers were earning up to 26 per cent more than their counterparts in the private sector in 2006.

But Siptu’s head of research Manus O’Riordan said today such comparisons had not adjusted for the 2005/2006 depression on private sector pay caused by the large numbers of immigrant workers experiencing a “negative pay differential”.

The ESRI’s study had also compared weekly earnings rather than annual earnings, which would have included bonuses and irregular payments in the private sector, he said.

Mr O’Riordan said strongly criticised the economic think-tank, claiming it had been as much engaged in campaigning as commentary on the issue of public sector pay.

He said: “The purpose of this paper is to bring about a cool-headed discussion of the sacrifices that everybody has to make, butthose best able to make it are those who have gained most”.

“We urgently need to replace the present debate on pay developments, which has been poisoned and bedevilled by both misrepresentations and misunderstandings, with a reasoned alternative that reflects reality.”

The union’s research suggested weekly earnings for private sector managers rose from €1,047 in 2005 to €1,188 by the middle of 2009.

In the public sector the figure over the same period increased from €869 to €973, but dropped to €905 when the pension levy was imposed.

Pay for manual workers in private industries increased from €607 to €639 during the period.

Source: http://www.ireland.com/home/Siptu_attacks_public_pay_myths/maxi/fast/news/irnews/243695

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6. WorldbyStorm - November 30, 2009

Interesting stuff Tomboktu… Intuitively and from working with both sectors I’ve felt that the picture is much much more mixed than the more heated stuff that’s been thrown around. There’s also two arguments at play here. One that the PS is overpaid (debatable in large measure it seems to me… in other words professional economists on both sides can make cases pro and contra). Two that there’s no money anyway so the PS wages have to be cut (also debatable particularly if like me one is fairly neutral on PS wages etc but is profoundly unkeen about the deflationary strategy pursued by the govt). Part of the problem is that the two have, deliberately or not, become mixed together.

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7. Tomboktu - November 30, 2009

At the weekend I was looking at the video for the second session at the European Commission’s roundtable that I referred to a few weeks ago. Jim McInally, HR Director at BT, argued a few times for assessments of the appropriateness of the pay of a director to be determined by the specific market they were operating in. It reminded me of Mandy Rice Davies famous “Well, he would, wouldn’t he?”.

It seems to me that when it is to the benefit of the those at the top, the market should be segregated so that they operate in a different market from the rest of us, but when it comes to others, that principle of of segregated markets doesn’t apply, and so, for example, Gardaí and teachers, are treated as being in the same market as receptionists, call centre operatives, supermarket shift supervisors and software engineers, even employers would very quickly tell you they are different markets if you tried to argue for a pay rise based on what somebody in one of the other roles earns.

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WorldbyStorm - November 30, 2009

I’ve heard the argument directly from the employer side in the LRC, that PS workers are different and even if they got higher wages in some areas that wasn’t the same… Hmmmm….

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8. EWI - November 30, 2009

Speaking of the ESRI. I can remember a certain right-wing bete noir of mine complaining on his blog back in, oh, 2005 or 2006 that the ESRI were ‘just’ sticking to the facts, rather than getting involved in ideology. Well, they seem to have cured themselves of that one.

(And speaking of both the ESRI and 2006, that was the year that one Richard Tol began working there:
http://www.esri.ie/staff/view_staff_by_alphabetica/view/index.xml?id=215

His Wikipedia page is also illuminating:
http://en.wikipedia.org/wiki/Richard_Tol )

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9. WorldbyStorm - November 30, 2009

His views on climate change are… intriguing.

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Pavement Trauma - December 1, 2009

So showing some independence of thought and going against the prevailing concensus on what to do about the country’s fiscal crisis is to be applauded but going against the concensus on what to do about climate change is not?

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EamonnCork - December 1, 2009

Going against the consensus is not an inherently praiseworthy act in itself.

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WorldbyStorm - December 1, 2009

Different forms of consensus, different data, etc, etc.

And what EamonnCork said.

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EWI - December 1, 2009

Going against the consensus is not an inherently praiseworthy act in itself.

There’s more tricks in the toolbox for the anti-AGW lobby than just simple denialism (see Lomborg, Bjorn).

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10. EWI - December 1, 2009

His views on climate change are… intriguing.

And a very good fit to FF’s purposes.

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WorldbyStorm - December 1, 2009

Evens up the playing field after the arrival of the GP in government?

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11. EWI - December 1, 2009

Evens up the playing field after the arrival of the GP in government?

Maybe. The limp Greens remind me of nothing more these days than the US Democrats (and that’s not a complimentary comparison).

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12. Wage increments… « The Cedar Lounge Revolution - December 16, 2009

[…] Secondly wage cuts in the private sector according to various estimates amount to figures somewhere around 20 to 30%. IBEC puts it around 21%, Chartered Institute of Personnel and Development puts it at 26%. Watson Wyatt put it at 26%. Whereas, by contrast, all public sector workers outside the semi-state sector have had wage cuts. The data on bonuses is interesting, given that according to the Watson Wyatt survey some 2/3rds of c… […]

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