Incomes fell €8.5k during recession

Average disposable household income – the amount families have to spend after paying taxes and receiving benefits – fell by just over €8,500 between 2008 and 2012. The stark figures, from the Central Statistics Office, are among the data in a paper called Living on Less: Changes in earnings, incomes and employment during the recession,which will set the background for a major debate on income restoration at IMPACT’s biennial delegate conference next week.

Conference delegates representing members from across the union will debate a motion calling on IMPACT to develop a strategy for income recovery for members in the public, private and voluntary sectors. It says this should include a public service pay claim when “the state’s finances improve to a degree that would lead us to believe that the exchequer could cope.”

Drawing on official figures, the paper reports that average public sector weekly earnings decreased by 5.1% – and average hourly earnings by 5.4% – in the five years to December 2013. These figures do not include the so-called pension levy, which has further reduced public service incomes by 7% on average. In the same period, average weekly private sector earnings fell by 3.4%, while average private sector hourly earnings were stagnant.

Although the average effective direct tax rate – the amount households actually pay in tax as a proportion of income – increased from 12.8% to 13.5% between 2007 and 2010, Ireland’s tax-to-GDP ratio is the second lowest in the euro area.

Updates on the pay debate and other conference news will be posted on our special conference microsite next week.