Public sector average wage 51% higher than Private sector.
Bond market will not lend to fund profligate public costs.
Reacting to the latest CSO Earnings and Labour Costs report released today (November 26th), ISME, the Irish Small and Medium Enterprise Association, criticized the government for its derisory efforts to reduce the public sector pay bill and denounced the unsustainably high average public sector wage. The Association called on the Government to bring public sector wages into line so that the wealth creating sector can stop bearing the brunt of this burden in higher taxes and costs reducing competitiveness.
The figures show that the average public sector wage is now 51% higher than the average in the private sector. This differential is even more pronounced when you consider that the average wage in a small business is €539 compared with €916 in the public sector, a massive 71% difference.
According to ISME CEO, Mark Fielding, “This enormous gap between public and private sector pay is unique to Ireland. In most other OECD countries the pay differential is either much narrower or non-existent. Added to this is the fact that Irish public servants are paid, in some cases as much as 60% more than their counterparts is mind boggling”.
“The private-sector is no longer willing to pay for excessive public sector wages through high taxes and the loss of private sector jobs and businesses. The public sector has been largely sheltered from the wreckage of the recession and continues to be paid Celtic Tiger wages, despite Croke Park and Haddington Road. To add insult to injury, many of the pay cuts agreed to by public sector trade unions are scheduled to be reversed in three years' time.”
“The Government’s unwillingness to address the inflated public sector pay bill is a major issue as we exit the Troika bailout, with an ongoing need to borrow to pay our running expenses. The question is how long will the bond market be prepared to lend us money to fund the bloated public sector. The bottom line is that we cannot afford the cost and the Government must grasp the nettle or we will be back into bailout faster than you can say ‘benchmarking’.”
The Association called for:
A comprehensive review of public sector wages
Public Sector wages reductions to bring pay into line with the private sector