CUTBACKS IN bonuses and overtime led to a fall in industrial sector wages in the second quarter of 2009, but average hourly earnings continue to increase year-on-year, according to the latest data from the Central Statistics Office (CSO).
Pay rates in the industrial sector increased 4.2 per cent in the second quarter compared to the year before, but fell 4.8 per cent compared to the first quarter of 2009, the figures show.
There was a 4.3 per cent annual rise in manufacturing hourly pay rates, although these fell back 5.3 per cent on a quarterly basis, hinting at the deepening pressures on firms as the recession began to bite.
Pay in the financial and insurance sector is down almost 12 per cent, from an average of €32.96 per hour to €29.03 per hour. However, this was mainly due to a 69 per cent plummet in irregular earnings.
Excluding bonuses, pay rates in the financial sector rose 0.5 per cent over the year.
Average hourly earnings, including irregular bonuses and payments, for managers, professionals and associated professionals in the industrial sector rose 0.4 per cent over the year, from €30.88 to €31.01.
Earnings increased by 1.8 per cent for clerical, sales and service employees over the same period, rising from €20.41 to €20.78 per hour, while they rose from €16.53 to €17.14 per hour, up 3.7 per cent, for production, transport, craft and other manual workers.
The average number of overtime hours worked per week in the industrial sector, which accounts for around 18 per cent of the private sector workforce, fell to 1.4 hours in the second quarter, down from 1.9 hours the previous year.
Alan McQuaid, economist at Bloxham stockbrokers, said the year-on-year increases in manufacturing earnings were likely to be lower in the next few quarters. “All in all, the figures appear to fly in the face of anecdotal evidence pointing to significant wage cuts in the private sector, but that probably reflects the higher than average remuneration in the multi-national sector, which is the one area of the Irish economy that is doing well at the moment.”
Paul Sweeney, economist at the Irish Congress of Trade Unions, said it was clear that the financial sector was where most of the private sector pay cuts had taken place. “Overall, most people are on the same [pay] and some are actually getting pay increases,” he said. Right-wing commentators seeking public sector pay cuts had pointed to the private sector “getting murdered”, but it’s not the way that it’s going, he added.
NCB economist Brian Devine said the figures showed that Irish firms were becoming more competitive compared to its euro zone counterparts, but that the adjustment was more subtle than deep cuts in basic pay.
Hourly labour costs, or the cost to the employer of employing a person per hour, fell 9.5 per cent in the financial sector in the year to the second quarter.
The Economic and Social Research Institute has complained in recent months about the lag in wage data from the CSO, which has forced it to rely on anecdotal evidence of pay cuts.
