Average earnings fall 3.8%

Average weekly earnings fell 3.8 per cent in the first quarter of the year, as the impact of the cuts announced in last December's Budget was reflected in public sector earnings.

Figures from the Central Statistics Office showed paid hours and average hourly earnings both declined over the three-month period.

But while analysts said the fall in hourly earnings was a boost to the country's competitiveness, unions claimed that lower paid workers were being hit hardest.

Average weekly earnings were €682.91, down from €709.55 a year earlier. Paid hours declined 2.2 per cent, and average hourly earnings were down 1.5 per cent.

The decline was felt broadly across the economy, with 11 of the 13 economic sectors experiencing a fall in earnings. The largest decreases were in the education sector, which fell 9.1 per cent, and transportation and storage, which declined 7.3 per cent.

Clerical, sales and service employees saw their earnings fall 5.9 per cent, with decreases of between 3.9 per cent and 3.5 per cent for managers, professionals and workers in the production, transport, craft and other manual workers sector.

Smaller businesses recorded a larger percentage decrease in weekly earning, with enterprises with less than 50 employees showing a decline of 3.9 per cent, compared to 3.6 for those with more than 250 staff, and 1.7 per cent w for enterprises with between 50 and 250 employees.

In the private sector, weekly earnings were down 2.8 per cent, but public servants saw their pay dip 5.5 per cent. However, this does not take into account the pension levy

POaid hours were down 2.2 per cent, to 30.9 in the quarter, with education the hardest hit at 3.9 per cent and accommodation and food services down 3.5 per cent.

Average hourly earnings fell to €22.10 in the three month period, from €22.44 per hour in the first quarter of 2009. Those in the transportation and storage sector saw hourly earnings fall by an average of 6.5 per cent, while the professional, scientific and technical bucked the trend and saw earnings rise 3.1 per cent.

Davy analyst Aidan Corocoran said the fall in average weekly earnings was "dramatic"

"The public sector wage bill was slower to respond to the recession than that of the private sector," he wrote in a note. "But the public sector caught up in Q1 2010 as the decreases in public sector pay announced in December's Budget kicked in."

Trade union Mandate, which represents almost 50,000 workers in the retail trade, said the data showed that people on lower incomes are being squeezed the hardest by the recession and called on the Government to protect low-income workers in the upcoming Budget.

"Today's earnings figures published by the Central Statistics Office show that the weekly earnings of the lowest paid workers in the economy – clerical, sales and service staff – fell by 5.9 per cent in the year to the first quarter of 2010. Average weekly earnings for such staff are now less than €470 per week and work out at around €24,000 per year," said general secretary John Douglas

"Ironically, while the incomes of the lowest paid workers are falling lower than others within the economy, the pressure they are experiencing from rising prices is the greatest. Yesterday's inflation figures demonstrate that the cost of transport has increased somewhat with quite significant increases in clothing and footwear prices as well as home-related costs like electricity charges.