Ireland comes 14th in earnings table despite recent wage hikes

Despite fears of the effects of recent wage growth in Ireland, employees come only 14th in a new league table of earnings in 39 states published by the Federation of European Employers.

Irish pay levels match those in Spain while Greece and Portugal are the only EU member-states below the Republic.

Denmark tops the league with Switzerland next, and east European states occupy the bottom 14 places.

Workers in the United Kingdom, our largest trading partner and competitor, have the joint fifth-highest earnings in Europe, along with the Netherlands.

The average entry rate for British workers in the service sector is £4.54 sterling (€7.41) per hour, compared with €5.97 in Ireland and €12.74 in Denmark. The starting rate in Moldova and Russia, which tie at the bottom earnings league, is €0.13 an hour.

The average wage for Irish clerical workers is €6.34, compared with €8.13 in the UK and €15 in Denmark.

Senior secretarial staff, IT systems operators and semi-skilled manual workers average €6.85 an hour in Ireland, €8.06 in the UK and €17.89 in Denmark.

Manual foremen, senior technicians, sales and PR executives earn an average of €10.07 an hour in Ireland, €14.25 in the UK and €24.50 in Denmark.

The head of a department or senior professional in a large company earns an average of €26.18 an hour in Ireland, €38.89 in the UK and €54.32 in Denmark.

Group chief executives of large companies earn an average of €225.17 an hour in Ireland, €333.65 in the UK and €469.60 in Denmark.

The averages given here are the mid-point figure, on a scale ranging from 80 per cent to 120 per cent of the median.

The director general of the federation Mr Robin Chater said the spread was to provide companies with an idea of the range of salaries they would need to offer to fill particular types of position.

The federation provides advice on human resources and legal issues to employers and most of its affiliates are in the information technology, telecoms and banking sectors.

Variations in rates of pay seem to widen the further up the earnings ladder a worker goes. For instance, the variation in the rates of pay for workers entering the services sector in Ireland, €5.97p to €7.17 an hour, is just more than 20 per cent, but the variations for management grades can be 50 per cent or more.

The range for chief executives runs from €180.13 an hour to €270.20, or 49.4 per cent.

The figures are based on earnings at the beginning of this month. Mr Chater accepts they are not strictly comparable across countries.

They are based on pre-tax income and include other regular payments such as overtime, but not sales commission or profit/gain sharing schemes.

He said that while Irish wage rates had been increasing faster than in most European countries: "The Irish wage differential increase has been very short term, there is a lot of catching up to do and there is high inflation in Ireland as well."

He said that much of the growth in Irish pay rates had been to high earners and specialised sectors.

"I suspect that the average factory work has not done so well."

The switch from basic manufacturing to development industries had also boosted Irish earnings, and productivity was still outstripping pay costs, he added.

Denmark pays by far the highest wages and sets a percentage base line of 100. Only Switzerland, at 96 per cent of the Danish rate, comes remotely near.

However, Denmark has much higher tax rates than Switzerland, but a much better "social wage" in areas such as health care.

Third in the league table is Norway at 66 per cent of Danish wage rates, Luxembourg comes fourth at 62 per cent and the UK is joint fifth at 58 per cent with the Netherlands.

Mr Chater attributes the high British score to the strength of sterling.

The Isle of Man is seventh at 57 per cent, Italy eighth at 56 per cent, France ninth at 55 per cent, Belgium tenth at 54 per cent, Germany eleventh at 51 per cent, Austria twelfth at 47 per cent, Sweden thirteenth at 45 per cent and then Ireland, joint fourteenth with Spain at 41 per cent.