Average earnings fall by 1.1%

The average weekly earnings have fallen 1.1 per cent in the year to the second quarter of 2009, new data from the Central Statistics Office showed today.

According to the Earnings Hours and Employment Costs Survey, the largest impact was seen in finance and real estate activities, where earnings slumped 13.3 per cent, mainly due to a drop of two-thirds in irregular payments. Pay in the education sector rose 1 per cent, the survey found.

The average weekly wage now stands at €698.43, compared with €706.03 in the same period in 2008.

Wages in the private sector, meanwhile, slipped 3.1 per cent, compared to a rise in earnings of 1.3 per cent for public sector workers, before the pension levy was taken into account.

Average hourly earnings in both sectors rose 1.8 per cent, with a 0.2 per cent rise in the private sector compared with 2.6 per cent in the public sector. Higher earners were hit harder, with hourly earnings for managers and professionals falling 1.3 per cent, compared to a rise of 3.1 per cent for manual workers.

Overall employment fell 6.2 per cent in the quarter, with a reduction of 109,500. Most of the job losses were seen in the private sector, where employment fell by 107,100, or 7.9 per cent. iN comparison, numbers fell by 2,300 or 0.5 per cent in the public sector.

The average number of weekly paid hours slipped 2.7 per cent to 31.9 hours. This reduction was felt more severely in construction, where there was a decline of 5.1 per cent, and in industry, where hours were cut by 3.6 per cent.

However, labour costs continued to rise, growing by an average of 2.4 per cent to €25.51 during the second quarter. Davy Stockbrokers noted that this rise compares to 4 per cent for the euro area and 3.7 per cent for the EU.

"That includes other labour costs, bar hourly earnings, that rose sharply –these encompass one-off redundancy payments," Davy said in a note. "Ireland closed the gap with Europe at a more rapid pace in H2 and will make further progress in 2010 thanks to a still weak labour market and public pay cuts in the recent Budget."

Economic advisor to the Irish Congress of Trade Unions (Ictu) Paul Sweeney said the figures supported Congress’s position that public sector pay was taking the hit, along with sectors such as finance and construction.

He said the pay cut suffered by public sector workers of 6.9 per cent from March was not included in the data.

“While there are some reductions in weekly earnings, they are not in basic pay rates for most workers in the private sector, but in hours worked, bonuses and other irregular payments. Those reductions are reversed when the climate improves,” he said.

“The real hit on pay is in the public sector and in the sectors which contributed most to the collapse of the Irish economy – finance, construction and real estate."