Average weekly earnings in Irish economy rose 4.2% last year

Average weekly earnings in the Irish economy rose by 4.2 per cent to €900.26 last year, according to the Central Statistics Office (CSO).

The headline finding suggests that while wage growth is ticking up, it is not rising at an alarming rate on the back of wider inflationary pressures. Economists had feared that if workers started demanding higher and higher wages to compensate for inflation, a corrosive wage-price spiral could develop.

The 4.2 per cent rise also incorporated the new public sector wage agreement, implemented in October, that gave public servants a 3 per cent salary hike, backdated to February 2022.

The CSO noted that payments to public servants in the fourth quarter of last year may have included backdated pay in relation to this agreement, which impacts the annual percentage change. The figures show public sector wages rose 10 per cent in 2022 compared with 2 per cent for the private sector. Much of the disparity is likely to reflect the once-off impact of backdated pay increases flowing from the new agreement.

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Average hourly earnings across the economy rose 5.5 per cent to €27.72, the CSO data indicates. The agency also noted that, in the five years to the fourth quarter of 2022, average weekly earnings have risen 23 per cent.

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The best paid workers in the State were once again those in the information and communication sector, with average weekly earnings last year of €1,512, up nearly 10 per cent on an annual basis, and more than two-thirds ahead of the national average.

Workers in the accommodation and food services sector were the worst paid, with average weekly earnings of €408.63, but the sector includes many part-time staff.

The largest annual percentage increase in average weekly earnings was 10.5 per cent in the public administration and defence sector, but again this reflected backdated pay from the new public sector wage agreement.

The average hourly rate of other labour costs increased 38.4 per cent across all economic sectors to €4.54 from €3.28 in the final quarter of last year. A significant factor in this growth was the ending of the Government’s employment wage subsidy scheme (EWSS) in May, the CSO noted.

EWSS payments were recorded as subsidies, and refunds received and were deducted from other labour costs from the first quarter of 2020 to the second quarter of 2022.

The CSO figures also indicated that the job vacancy rate, which measures job vacancies on the last working day of the quarter, was 1.3 per cent, down from 1.6 per cent at the end of the third quarter but up from 0.9 per cent at the end of the fourth quarter of 2019, ahead of the pandemic.