WORKERS WHO reluctantly sucked up a pay cut or pension levy this year on the basis that “we’re all in this together”, to borrow Tory shadow chancellor George Osborne’s phrase, may be taken aback by the fact that the official wage statistics produced by the Central Statistics Office (CSO) do not show any significant evidence that wages are falling.

The most recent available data on wage trends relates to the first quarter of this year. While it shows some pressure on wages in the financial and insurance sectors, hourly earnings in industry and manufacturing were still rising at the start of 2009.

“Given the widespread coverage in the media of pay cuts, the patterns are somewhat surprising,” the Economic and Social Research Institute (ESRI) said in its latest quarterly bulletin.

For the ESRI, this raises questions over to the extent to which the labour market is producing “competitive-boosting wage falls”. For the unions, it confirms that public-sector workers should not be beaten about the head with the fact that the private sector has “done its bit”.

The failure of income tax receipts to meet the Department of Finance’s targets in recent months may suggest that average earnings are lower than is reflected in the official hourly wage estimates, the ESRI said.

This could be due to reduced hours, a cut in wage rates that is not showing in the statistics, or a combination of both.

Part of the discrepancy may relate to the fact that the CSO is in the process of moving from one system of gathering wage data to another. The ESRI noted it was “difficult to have the same degree of confidence in the latest data” as it would in a long-established system. Reproducing the CSO data in its quarterly bulletin, the ESRI attached a “health warning” to it. But the bad omen for all workers is that it reckons wages will fall 2.5 per cent next year.