IT workers still best paid but tech downturn triggers fall in wages

IT professionals remain the best paid workers in the State but a global downturn in the sector has triggered a dip in wages.

The latest wage data from the Central Statistics Office (CSO) indicated that workers in the information and communication sector enjoyed average weekly earnings of €1,531 in the second quarter.

While this was up on an annual basis and more than two-thirds in advance of the national average, it was down by over 7 per cent, or €120.93, over the previous quarter, one of the largest quarterly falls on record, most likely due to the recent spate of job losses in the sector.

Several big names in tech have announced lay-offs in the last few months, citing over-hiring and over-expansion during the pandemic. Separate CSO figures published last week, however, suggest employment in the sector still rose year on year.

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Workers in the financial, insurance and real estate sector saw average wages fall by 10 per cent to €1,339.81.

Overall, the CSO figures show average weekly earnings for all workers in the Republic rose by an annualised rate of 4.3 per cent to €909.77 in the three months to the end of June – up from €871.93 in the same period last year.

Policymakers fear that if workers demand higher wages to compensate for ongoing cost-of-living pressures, inflation will ultimately be harder to bring down. Underlying price growth has been a key focus of the European Central Bank – it was rising at a rate of 6.6 per cent in the Republic in July – amid concern the initial price surge has spread out to other parts of the economy and may be driving higher wage demands.

The CSO data show average hourly earnings, which economists see as one of the main indicators of wage inflation, rose by 5.1 per cent to €28.07 in the second quarter.

Workers in the accommodation and food services sector were the worst paid, with average weekly earnings of €431.85 in a sector includes many part-time staff.

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The largest annual percentage increases in average weekly earnings was recorded in the public administration and defence sector (+9 per cent), partly reflecting backdated pay from the new public sector wage agreement.

Average hourly total labour costs were €32.77 across all economic sectors in the three months, the CSO said.

Information and communication had the highest average for hourly total labour costs at €51.53, followed by €48.19 in the financial, insurance and real estate activities sector. The sectors with the lowest cost of employing labour were accommodation and food service activities at €17.58 and arts, entertainment, recreation and other service activities at €24.02.

The CSO highlighted that average hourly total labour costs have increased by 23.3 per cent over the five years, from €26.57 per hour to €32.77. The percentage changes across the sectors ranged from 7.8 per cent in transportation and storage to 33.1 per cent in administrative and support services.