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| Source: CSO
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Irish Economy: Earnings in the private sector fell by 3.1% compared with a rise of 1.3% in the public sector in the year to Q2 2009 -- before deduction of the public pension levy that was introduced in March 2009. In small firms (i.e. less than 50 employess) weekly earnings fell by 4.9%. In small firms (i.e. less than 50 employess) weekly earnings fell by 4.9% compared with rises in bigger firms.
The CSO survey on Earnings Hours and Employment Costs Survey (EHECS), published today and covering all sectors of the economy other than agriculture, forestry and fishing, shows that average weekly earnings fell overall by 1.1% from €706.03 in Q2 2008 to €698.43 in Q2 2009. This compares with a rise of just 0.3% in the year to Q1 2009.
Overall employment fell by 6.2%, or 109,500, between Q2 2008 and Q2 2009 while average paid hours per week were down by 2.7% from 32.8 to 31.9 over the period. Average hourly earnings increased by 1.8%, from €21.51 to €21.90, compared with a rise of 3.6% between Q1 2008 andQ1 2009.
A more detailed examination of the trend in weekly earnings reveals the following between Q2 2008 and Q2 2009:
Across the economic sectors the annual changes in weekly earnings ranged from a fall of 13.3% in Financial and real estate activities to a rise of 1.0% in Education. The fall in the former is due almost entirely to a fall of almost two thirds in irregular earnings payments.
Earnings in the private sector fell by 3.1% compared with a rise of 1.3% in the public sector. Earnings in the latter are, however, calculated before deduction of the pension levy that was introduced in March 2009.
The weekly earnings of managers, professionals & associated professionals fell by 2.8% compared with lower declines of 1.6% and 1.9% for Clerical, sales and services employees and Production, transport, craft and other manual workers respectively.
In small enterprises (i.e. less than 50 employess) weekly earnings fell by 4.9%, compared with a rise of 0.3% in enterprises employing 50 to 250 workers and a rise of 1.3% in large enterprises with greater than 250 engaged.
Hourly earnings up by 1.8% Q2 2009
Average hourly earnings including irregular bonuses rose from €21.51 per hour in Q2 2008 to €21.90 in Q2 2009, a rise of 1.8%. Hourly earnings rose by 4.4% in industry (to €21.21 per hour) and by 4.1% in education, from €33.80 in Q2 2008 to €35.20 per hour in Q2 2009. Earnings fell by 11.6% to €27.97 per hour in financial and real estate sector and also fell by 2.3% to €20.24 in the transport and storage sector in Q2 2009.
Hourly earnings increased slightly by 0.2% in the private sector, from €19.23 per hour in Q2 2008 to €19.27 in Q2 2009. In the public sector, earnings rose from €29.16 to €29.92 per hour in Q2 2009, an increase of 2.6%. While managers, professionals and associated professionals showed a decline of 1.3% in average hourly earnings (from €32.75 in Q2 2008 to €32.34 in Q2 2009), earnings for production, transport, craft and other manual workers rose by 3.1% to €16.27 per hour.
Irregular earnings per hour fell slightly in the year, from €1.15 per hour in Q2 2008 to €0.85 in Q2 2009. They were down by 66% (from €5.31 per hour in Q2 2008 to €1.82 in Q2 2009) in the financial and real estate sector and also fell in the public administration and defence sector by 37% to €1.58 in Q2 2009.
Davy chief economist, Rossa White, comments:
Irish labour costs fall less-than-expected in year to Q2
Weekly earnings down 1.1%; hourly earnings up 1.8%
- Weekly earnings across the economy fell 1.1% in the 12 months to Q2 2009, but hourly earnings rose 1.8%. The data come from Ireland's first contribution to the Eurostat earnings and labour cost survey for the whole economy. It is a welcome addition and will help us to better track the trend in labour costs and how Ireland is comparing with its peers across Europe.
- Earnings fell much more sharply in the private sector, sliding by 3.1% on a weekly basis. Hourly earnings inched up 0.2%. The public sector fared better: weekly earnings increased 1.3%, and hourly earnings were up 2.6%.
- The gap between the percentage change in weekly and hourly earnings is explained by lower hours worked.
Bonuses down and higher paid workers hit hardest
- Irregular earnings (bonuses) fell 26% year-on-year, but these make up only 5% of total hourly earnings. They are more important as a share of total pay in the financial, insurance and real estate sector (-66%), civil service, health sector and in information technology (IT).
- Higher paid workers were hit harder. Hourly earnings for managers and professionals slipped 1.3%, whereas manual workers saw hourly earnings rise 3.1%.
- Not every sector saw weekly earnings decline. In order of magnitude, financial, insurance and real estate, transportation/storage, professional scientific/technical, wholesale/retail, accommodation/food service, construction, administration and recreation/arts/entertainment all experienced reduced earnings.
- All of the public sector (+1.3%), industry (+0.6%) and IT (+0.1%) saw weekly earnings rise.
Irish labour costs rise 2.4% versus 4% in euro area
- Irish hourly labour costs rose 2.4% in the year to Q2 versus +4% for the euro area and +3.7% for the EU. That includes other labour costs, bar hourly earnings, that rose sharply –these encompass one-off redundancy payments. 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.
