In the post What’s Behind the Central Bank’s Destructive Agenda to Drive Down Wages? commenter Laura Farrell made a point on incomes and wage competitiveness which I think is worth addressing.
“What neither the Central Bank nor this article accounts for is the inequality in Irish wages. One of the reasons that our “average” looks so high is because of the distortion caused by a small number of very high earners, particularly in public sector funded roles. Lower end roles, even in skilled industries, have been falling lower for years while wages at the upper end take off.”
It’s quite common to get comments like this, which make statements about high and low earners without making any reference to data that is easy enough to access and link to. For example, you could look at the CSO Statistical Yearbook 2011 Earnings which show Irish earnings for last year, or you could look at how earnings in Ireland for several sectors compare to other EU countries.
However, rather than wading through that you could read this article by Dr Micheál Collins of the Nevin Economic Research Institute (NERI) which provides a great deal of clarity on the issue of income distribution using the CSO data. It’s so clear in fact that I thought it worth including in full here:
“Each year, since 2004, the Central Statistics Office (CSO) has collected detailed information on the income and living conditions of a representative sample of households across the Republic of Ireland. In general, the survey covers more than 5,000 households and 12,000 individuals. The information provided by this survey is useful for understanding the spread of income across households and it highlights the current and persisting gaps in the distribution of that income between rich, poor and middle income families. The latest data, published in March 2012, is for the year 2010; a year when the recession continued to bite and the wage reductions, welfare cuts and tax increases of various budgets were continuing to have notable impacts on Irish families and the challenges many face to make ends meet.