Election 2020 fact check: Is the average income really €47,000?

Taoiseach made claim at leaders’ debate when discussing entry point for higher tax rate

Taoiseach Leo Varadkar speaks during the seven-way RTÉ leaders’ debate at  NUIG on Monday. Photograph: Niall Carson/Pool/AFP via Getty Images

Taoiseach Leo Varadkar speaks during the seven-way RTÉ leaders’ debate at NUIG on Monday. Photograph: Niall Carson/Pool/AFP via Getty Images

 

Question:

Is the average income of a full-time worker really €47,000 a year?

Who is making the claim?

During the leaders’ debate on RTÉ on Monday night, Taoiseach Leo Varadkar spoke at length about his party’s long-held goal of moving the entry point for the higher rate of income tax to €50,000. While arguing this, he stated that “the average person working full-time in Ireland earns €47,000 per year, and I don’t think that average person should pay the highest rate of income tax”.

Upon what are they basing the claim?

The Central Statistics Office (CSO) publishes data on earnings and labour costs every quarter and also on an annual basis.

The analysis:

The most recent full year data relates to 2018 and it shows that average annual earnings increased by 3.3 per cent to €38,871 that year. When part-time workers are stripped out, the figure for full-time employees was €47,596 per year. That would support the Taoiseach’s core assertion, but his comments provoked much commentary on social media, with many disbelieving of the claim or suggesting they couldn’t understand how it could be true.

Part of the reason for this could be that as the figure supplied is an average, it will tend to be distorted by a few high-level earners. This is the same effect as when an extremely wealthy person walks into a bar, according to Aidan Regan, a political economist and associate professor in UCD’s School of Politics and International Relations, who was critical of the claim. “If there are 40 people in the bar and a billionaire walks in, everyone, on average becomes a millionaire,” he says. “If you want to talk about middle-income earners – or households – you need to talk about the median”. The median is the exact middle point in a set of figures. He said that median full-time earnings in Ireland are around €35,000, while median disposable income in Ireland is around €21,000, and median household gross income (rather than individual income) is around €47,000. His earnings data is sourced from the CSO’s labour force survey, and the income data from its Survey on Income and Living Conditions.

He argues that sociologists and researchers tend to favour the median, and that focusing on the average for full-time workers is not the best frame for analysing the nature of work in the economy, as it discounts half a million workers.

The verdict:

The Taoiseach’s statement is accurate, but leaves out some information key to getting a fuller picture of earnings in the State. Therefore the verdict is the claim is true, but missing some important information.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.