Average income declines by 5%

THE AVERAGE household income was €22,168 last year, according to the Central Statistics Office. This represented a decline of 5 per cent on 2009 and was a slightly larger decline than between 2008 and 2009.

The fall in average incomes over the period was considerably less than the decline in the widest measure of economic activity – gross domestic product.

While nominal incomes fell by 9 per cent between their boom-era peak and 2010, nominal GDP declined by twice as much.

The difference is accounted for by social-welfare payments, which have mitigated the effects of the recession on household incomes.

Average household incomes, excluding all social transfers, fell by 19 per cent between 2007 and 2010, an almost identical decline to that of nominal GDP.

Despite the mitigating effects of the welfare system, the percentage of the population experiencing two or more kinds of deprivation rose from 17.1 per cent in 2009 to 22.5 per cent last year, according to the figures. Before the recession took hold in 2007, the deprivation rate stood at half its 2010 level.

The CSO includes 11 measures of deprivation, including having to go without home heating for financial reasons and being unable to afford a warm waterproof coat.

The new figures also show that income inequality rose sharply last year. The Gini co-efficient, which measures inequality on a scale of zero to 100, with zero indicating identical incomes among all households, jumped to 33.9 in 2010.

This was the highest reading since records were first kept in 2004.