• Independent commission essential to de-politicise issue. • Irish public sector pay still amongst highest in Europe. • Public-private sector pay differentials completely out of kilter. • Reversal of pay cuts should not be tolerated.
ISME, Thursday 26th February 2015.
At the release of the CSO figures on Earnings and Labour Costs for the 4th quarter of 2014, ISME, the Irish Small & Medium Enterprises Association, called for the establishment of an Independent Commission to examine public sector pay and recommend changes based on affordability and international comparisons. The Association also recommended an international chair for the commission to avoid any interference.
Today’s CSO figures, show that the average public sector wage is now 42% 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 €561 compared with €911 in the public sector, a massive 62% difference. The European Commission has also confirmed that the pay gap is bigger in Ireland than in any other country, even when different education levels are accounted for.
According to ISME CEO, Mark Fielding, “We now have a Low Pay Commission, so why not introduce a public sector commission to adjudicate on the massive anomalies vis a vis the private sector and international comparisons. If labour ministers are so excited about increasing the low pay, they should be equally enthused about eliminating higher pay inequalities. However, the flies in the ointment are, number one, their salaries would be affected and number two, there’s no votes in it”.
The one way to remove the public sector pay-setting from the politicians is to introduce a Pay Commission, similar to the Low Pay Commission, a transparent process, chaired by an international expert. Without this, the public sector bargaining will once again revert to the tail wagging the political dog, compounding inequality, imbalance and unfairness and eroding competitiveness.
Given the very challenging environment still facing all small businesses, the promise from Minister Brendan Howlin that he wants to sit down with public sector unions to begin the process of reversing the public sector pay cuts, is being greeted with incredulity by small business owners who are working all the hours, merely to survive.
“The public sector continues to be paid Tiger wages as a result of increments. Public sector unions deny this repeatedly, despite the evidence to the contrary from the CSO. Many people believe the denials because they have heard them repeated so frequently that they assume them to be true. But let's be clear: average Irish public sector wages are 42% above those in the private sector.”
The Association called for:
• A comprehensive international led commission to review public sector wages, conditions, perks and increments.
• Improved efficiencies within the public sector to bring it to world class status.
“A strong public sector is an important and essential component of any modern economy, but it has to be efficient, cost effective and focused on delivering value for money. Increasing public sector pay in an environment where Ireland is currently borrowing €8 billion to run the country, does not make sense and will just add to the tax burden for all”, concluded Fielding.