Are Irish nurses underpaid – what are the facts?

The nurses’ strike is about pay and working conditions but it also reflects some of the key economic issues facing this country – such as the cost of improving public services and the pressure on pay from high housing costs.

Whatever happens with the strike, it is a sign of the pressure on pay which the Government is going to face in the run-up to the end of current public sector pay agreement runs in 2020 and which now faces employers in Ireland in general.

Here are the key issues behind the nurses’ strike – almost all of them in dispute.

1. What are the nurses asking for?

The Irish Nurses and Midwives Organisation (INMO) is arguing that staff recruitment and retention issues, and comparability with other health professionals such as radiographers, mean pay levels should be increased.

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It points out that nurses pay typically lags these other groups by around €7,000 a year.

It says the dispute, at its heart, is not about pay for its members but about attracting enough staff to the health service.

Claims from unions which increase costs are ruled out under the terms of the current public sector wage agreement

This poses two immediate problems for the Government. One is the €300 million price which the department puts on meeting the pay demand, which it estimates as equating to a 12 per cent increase – with a warning that a demand for reduced working hours for more professional development could add another €100 million plus per annum.

The union says it has never asked for 12 per cent and disputes these figures as “spin.” The second key issue is what the outcome of the dispute will mean for pay demands across the public sector.

The €300 million cost – if correct – is a significant sum in the context of the health budget. The pay budget for health is around €7.9 billion and is already due to rise by 7.4 per cent this year, or around €547 million compared to 2018, as pay and numbers employed rise.

Even more significantly in financial terms, the Government fears that if it concedes to the nurses then it will reignite pressure from other groups such as teachers and the general public service unions such as Siptu.

With fears that economic growth is slowing and the immediate threat of a no-deal Brexit, which would push the exchequer finances back into the red, money could be tight.

Claims from unions which increase costs are ruled out under the terms of the current public sector wage agreement which runs to 2020 and to which the nurses unions are party.

A 2018 report by the Public Service Pay Commission – the body which advises the Government on public pay – did not support the claim of general problems in recruiting and retaining nursing staff.

It said there was evidence of problems in some areas. It recommended changes in specific allowances, costing around €20 million per annum, which the Government accepted. The unions dismissed this as inadequate.

The Public Sector Pay Commission did leave it open to nurses to press for a review of the adequacy of pay levels, a job it said was beyond the remit of its 2018 study.

However, the trade unions decided to push for immediate action. While it disputed the price the Government is putting on its demands, there is no doubt that it would be substantial – and push the Government into a corner.

2. Are nurses underpaid?

Here we face a conflict of evidence – and a need to make value judgements on how much particular jobs are “worth” compared to others.

The department says nurses are paid in line with other graduate recruits to the public service and that pay levels in Ireland compare well internationally.

The union points to the disparity with other health professionals and disputes the evidence on international comparisons.

Certainly nursing pay here is higher than in the NHS in the UK and this is significant as it is our nearest neighbour

The Department of Public Spending says nursing salaries are “competitive” with a base starting salary for a staff nurse of €31,110 after three months – and the opportunity to earn up to €6,000 more in allowances – which, it says, “compared favourably with an average graduate starting salary of just over €29,000.”

Opportunities for progression mean more than eight out of 10 nurses earn more than €40,000 in a basic salary, on top of which they earn allowances. Dividing total spending in health by numbers employed, the department says average pay is now €57,600.

The unions take a different approach, arguing basic salary for staff nurses is well below that of other healthcare groups such as occupational therapists, radiographers and respiratory technicians.

For a staff nurse with five years experience, they say average pay is €36,023 versus €42,539 for an occupational therapist, €40,850 for a radiographer and €42,936 for a respiratory technician.

The union says these gaps do not exist in another jurisdictions.

The issue of international pay comparisons for nurses is just as fraught. There is a lack of comparable international data.

Certainly nursing pay here is higher than in the NHS in the UK and this is significant as it is our nearest neighbour. But compared to other markets the evidence is different and a statement in the Department of Public Spending 2018 study on the issue, that evidence suggests that nursing and midwives pay here "is high comparatively," is debatable.

The INMO argued that, as nurses generally work longer hours in Ireland, the hourly rate of staff nurses here is actually well below that of competitor markets

Figures widely quoted from the OECD – including by the department in its work – calculate what nurses are paid and the purchasing power of this in each country.

They show Ireland in fifth place out of 30 countries surveyed, well ahead of the UK and in line with or ahead of other English-speaking countries like Canada and Australia, to where Irish nurses often emigrate.

However, the OECD warns that figures for a small number of countries, including Ireland, are over-estimates, as only registered, professional nurses are included, compared to a wider classification in the data of most other countries. So these comparisons are not valid.

Separate OECD figures suggest Irish nurses earn in line or slightly above average earnings, but in other countries they generally have a slightly larger premium.

We might note here that in terms of comparisons with the private sector, the much more generous public sector pensions must also be included in any calculus.

The INMO argued in its submission to the pay commission that, as nurses generally work longer hours in Ireland, when account is taken of hours worked, the hourly rate of staff nurses here is actually well below that of competitor markets like Canada and Australia.

Unfortunately the pay commission did not feel it was its remit to make detailed pay comparisons internationally.

It did, however, look at entry-grade pay, as this was seen as a key factor in attracting staff. Again adjusting for purchasing power in the different countries, it found entry-level pay per hour here was slightly higher than the UK, but represented 78 per cent of the Australian rate and 67 per cent of the net hourly rate for Canada.

In terms of holidays and other entitlements the differences were not that significant.

It did not conduct comparisons at different pay levels and doing so properly would be a big task, if allowances and rates of progression were also counted in. It seems fair to conclude that nurses are paid a bit more than in the UK but less than the other big English-speaking markets like Canada and Australia, certainly at lower levels.

3. Are there retention problems?

The Public Service Pay Commission said it believed current pay rates “do not appear to be unduly affecting the number of nurses, midwives and doctors applying to work abroad.”

It said its view was “that remuneration is not the main issue impacting on recruitment and retention, where difficulties exist.”

It did concede there were problems in specific areas of nursing, but not more generally. Its conclusions were greeted as “incomprehensible” by the INMO and its rejection of the report and the suggested remedies started the move to industrial action.

Nursing numbers fell from more than 39,000 in 2007 or 33,768 in 2013

The commission found staff turnover in the nursing sector was 6.8 per cent, which would be in line with the 7-8 per cent typical in the private sector. The union points to higher turnover among staff nurses and the prevalence of agency staff – paid significantly more per hour – as evidence of recruitment problem, which it said were central to key problems such as waiting lists, closed wards and crowded A&E departments.

The commission did not dispute the problems in the health sector, but in general did not find low pay was generally hindering recruitment or retention in the sector.

Nursing numbers fell from more than 39,000 in 2007 or 33,768 in 2013. Numbers rose to 37,644 by the end of last year and the rise in recent years is, the department says, evidence that nurses can be recruited and retained at current pay levels.

A disturbing point was the commission did not feel it had enough information from available HSE data to assess the arguments in full. As in so much of the health service the evidence is murky.

Clearly more personnel are needed in some areas, but how much is due to the difficulty of attracting staff is hard to tell.

Overall turnover levels do not look excessive.

4. What are the wider issues?

There are three wider points.

The nurses dispute needs to be seen in the context of the move to retore pay to pre-2008 crash levels. Along with increasing numbers, which also fell during the crash, this has been a key factor for the public finances. Rising revenues have allowed the Government to increase numbers, pay and also non-pay spending. However as growth slows – particularly if there is a hard Brexit – there will be a clear trade-off between increasing pay, increasing numbers and spending more on non-pay service provision.

Harder to measure is the quality of the working environment in the Irish health service compared to others

The second is the lack of data and the need for better management systems. The commission remarked in its analysis that there was a lack of detailed information in key areas of recruitment and retention, including – for example – the reasons why nurses were leaving, with no data even available on how many were going elsewhere in the health service. Nurses told the commission that all other tactics had been used to attract staff except for higher pay – and it was now the time to accept the reality. However the commission did not fully buy their case.

In some areas its conclusions are tentative. The commission also called for a developed and funded workforce plan and said it believes major changes are needed “in how we plan, organise and resource the workforce.”

A major issue for the Government is delivering improved services in return for more pay and the fact that the commission felt the need to make these points is telling.

The third is the wider issue of Ireland again being an expensive place to live and particularly when it comes to renting or buying a house. This will be a key issue in terms of attracting healthcare workers to come back and live in Ireland and in fuelling pay demands across the economy.

Someone on the department’s estimate of the average nursing pay of around €57,000 is now struggling to afford the average national rent, put by the Residential Tenancies Board at more than €1,300 and two incomes would be needed to rent in many areas of Dublin.

In policy terms addressing this housing issue is thus central to controlling pay, as otherwise militancy will only grow, particularly among younger age groups.

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The bottom line is this dispute will not be easy to solve. Nurses pay here does not appear hugely out of line internationally – and higher pay will certainly be available for some in countries like Australia and Canada. Harder to measure is the quality of the working environment in the Irish health service compared to others.

Despite this, the sector has been able to recruit staff, though there are shortages in some areas.

An acceptance of the commission’s suggestion of a wider review of pay in the sector ahead of the next pay agreement might be a way forward, but the union does not appear to be in the mood to wait.