15th October 2012
A Central Statistics Office (CSO) analysis of public and private sector earnings published last week shows that, regardless of how you measure it, any pay premium for public sector workers has reduced significantly since 2007.
As they are based on gross earnings, the CSO calculations overestimate the pay gap because they do not take account of the so-called ‘pension levy,’ which further reduces public service pay by 7% on average.
The CSO acknowledges that economists in Ireland and abroad disagree on how to measure pay differences across the two sectors. Unlike earlier controversial reports by the ESRI, the CSO publishes results from a variety of models and tests.
Its report shows a very broad range of estimates, all of which demonstrate a measurable reduction in the pay gap regardless of the methodology used.
It finds that the pre-pension levy pay gap for men ranges between 2% and 14%. The pay gap is wider for women at between 9% and 20%.
So, when the pension levy is applied the public service pay ‘premium’ ranges from minus-5% to plus-7% for men, and from 2% to 13% for women.
The larger gap in pay for women raises particular concerns about the prevalence of low paid and often precarious work for women in the private sector.
The study produces aggregate figures and does not attempt to compare the pay of specific jobs with similar skills and education requirements, experience or levels of responsibility.
The CSO results show that, on average, public service workers have higher educational attainment, longer service, are older, and are more likely to be in professional jobs than their counterparts in the private sector. These remain the most significant factors in explaining any premium in public sector pay.