Public sector pay increasing twice as fast as private sector

Public sector pay is climbing twice as fast as private-sector wages governed by the national pay agreement, new figures have shown. The rise of almost 10 per cent in average earnings for civil and public servants last year was fuelled by the controversial benchmarking deal, writes  Una McCaffrey

In addition, the new figures from the Central Statistics Office (CSO) show that recruitment in the State sector has spiralled despite the Government's insistence two years ago that numbers would actually fall by 5,000.

The CSO figures show that weekly public sector pay, excluding the health sector, grew on average by 9.5 per cent in 2004.

This means that public servants got twice the pay rise of financial staff and industrial workers last year.

They received five times the pay rise of construction workers.

Under the national pay agreement, private-sector workers received a 2 per cent pay increase last January, followed by another 2 per cent rise in July and a final increase of 1.5 per cent in October.

The number of people working in the public sector, meanwhile, grew by 6,700 to 345,000 over the course of 2004, according to the CSO's figures.

The 2004 growth came after a rise in public-sector numbers of 2,300 in 2003, bringing the total increase over the two years to 9,000.

These extra staff are costing the State about €380 million a year, thus adding significantly to the projected cost of benchmarking.

The increase in public servant numbers came at a time when the Government planned to reduce by 5,000 the numbers in the public sector, before the end of 2005 to help save money.

Based on the new CSO numbers, achieving this goal would require 14,000 public-sector jobs to be cut over the next eight months.

The Department of Finance last night said that by its own measure, the public-sector workforce has not grown by 9,000, but by 330. The difference comes, a spokeswoman said, because the department accounts differently for part-time workers.

By its own measure, there were 281,581 public servants at the end of December last year, or 1,410 over their target for reductions. The Departments of Education and Health were responsible for the overshoot.

In response to a Dáil question on the matter earlier this week, Minister for Finance Brian Cowen said he was "in consultations" with the relevant Ministers on the matter.

Meanwhile, the new CSO numbers also show that public- sector wages now substantially outpace those in many other parts of the economy.

The average public servant was paid €42,302 at the end of December, compared to €38,731 for financial staff and the average industrial wage of €30,000.

These differentials prompted an angry response from banking workers' union, the Irish Bank Officials' Association ( IBOA).

IBOA general secretary Larry Broderick said the numbers illustrated the need for a "total overhaul" of Government and trade union strategy on national wage agreements.