Republic’s base for public sector pay and welfare cuts much higher than the north’s

Cuts in pay and welfare start in the Republic start from a much higher base than in Northern Ireland, according to headline comparisons made by Gerry Moriarty in the Irish Times. This is a reporting mission I’ve been urging for months. Well done Gerry.  The job is by no means complete and I hope it will prompt wider analysis and debate. Remember that Irish public sector pay and benefits was higher a year ago. The taoiseach’s salary was about 20% up on today. Public sector pay was cut by 5% up to €30,000 to 15% on those earning up to €200,000. Child benefit was reduced by € 15 a month. From the next budget in 7 December, this is hardly the end of the story. Extracts from the report..

Politicians 

The Taoiseach, Brian Cowen, earns €228,466 compared to €134,436 for First Minister Peter Robinson and Deputy First Minister Martin McGuinness.

Government Ministers earn €191,417 compared to €94,959 for their Stormont counterparts. TDs earn €92,672 compared to €50,595 for Assembly members.

 Perhaps the more relevant comparisons however would be with the British Prime Minister who is holding down his pay to  £142,000 (€167,800), UK Cabinet ministers, £134,565, (€159,062, including their MPs’ salary) and  MPs, £ 65,738 (€ 80.059). The US President’s salary ( minus the odd  jumbo airplane and chopper and White House and Camp David living allowances, mind you) is $400,000 (€298,950) – not a whole lot more than the Taoiseach.

Hospital consultants

Northern Ireland hospital consultants earn between €87,460 and €117,923,– less than half of pay for consultants south of the Border.

Rates for consultants in the South who do public hospital work only range from €184,455 as entrants to €241,539 at professor level.

Northern consultants can also earn bonus-type payments for public work, but even taking this into account there is still a huge gap in consultants’ pay between practitioners on both sides of the Border. Moreover, most Southern consultants earn substantial figures from private work – much more than their Northern counterparts, according to Northern consultants.

Nurses

Southern staff nurses earn between €30,234 and €42,469, compared to a pay scale of between €24,856 and €32,521 for Northern nurses, according to the two health departments and nursing union representatives

Education

The Department of Education in Northern Ireland was able to provide a clear statement of average payments for school principals (€65,867), vice-principals (€57,469) and teachers (€44,056), but the picture was less clear for the South.

Based on information provided by the Department of Education and teachers’ unions, the pay of teachers, on average, ranges between €55,000 and €60,000. Principals of 500-plus pupil secondary schools average between €95,000 and €105,000, while primary principals, who run smaller schools, on average earn about €67,000.

On the welfare side, Southern pensioners receive €230.30 per week compared to €114.65 for Northern counterparts.

Jobseekers over 25 in the South receive €196 per week compared to €76.82 for jobseekers over 25 years in the North.

Child benefit for the first child in the South is €150 per month compared to a Northern figure of €103.29 per month.

These headline figures really require more personal detail to be fully meaningful, like the impact of tax credits on families in the UK now subject to reform, and the costs of health insurance in the Republic, whereas health in the UK is of course free at the point of delivery.

 

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  • IJP

    Another good spot, Brian.

    Your last paragraph is important though. In addition to all that, we are also dealing with a false exchange rate. Go back to €1.40=£1 or even €1.30=£1 and the difference is less stark in the higher grades and disappears altogether in the lower grades.

    Thus the SDLP’s desire to attack the highly paid actually appears more relevant in the Republic than in NI.

  • Glencoppagagh

    “Rates for consultants in the South who do public hospital work only range from €184,455 as entrants..”

    If that’s true then it was only a matter of time before the Celtic Tiger was suffocated. The banks merely accelerated the process.

  • aquifer

    How many catlle, widgets, people must you export to pay for each 1000 extra Euros a year?

  • Hold on! Hold on! What’s the basis of assumptions here?

    Would anyone care to suggest a valid comparison point? The Big Mac Index? Whatever?

    All I know, for sure (as a London resident), is that Dublin living (and I tried it last weekend) is one heck of a deal more pricey than London or Brussels or New York or …

  • Brian Walker

    As stated, straight monetary comparisons Malcolm. Not enough but better than nothing…

  • IJP

    Correct, Brian, and a valid piece of research if only because it shows the higher-paid are higher paid south of the border than north of it – that much is indisputable, regardless of Big Mac indices and such like (which I hint at as necessary in my first post for a full comparison).

    So there is certainly relevant info there, even if we don’t have all of it.

  • Mack

    Not sure about that Malcolm. There are tourist hot spots where you will get fleeced, but everyone here says the same thing about London when they go there (very pricey etc).

    What in particular did you find expensive relative to London?

  • John Ó Néill

    I didn’t get around to doing this yesterday. Based on those figures, Gerry Moriarty would fail an economics GCSE. The headline numbers are correct but it is misleading to simply put the numbers beside each other (they are gross not net income figures). In some cases, they are clearly obscene in the Republic, but without recourse to Big Max indices, it is worth drilling down into these a bit if you want to have a real sense of what is going on and get a clear idea of the relative value of the salaries.
    To make any meaningful comparison you’d need to look at the income arising from those salary figures rather than the gross figures. I put some sample figures down below. I converted the sterling equivalent salaries back to euros to make comparison of take home pay easier (and quantified the net as a percentage of the gross). I assumed an exchange rate of about £1 to €1.20. I also included one set of direct comparisons that I know of (academic pay scales). To show where they would actually be equivalent as gross pay, I’ve worked out what the exchange rate would need to be.

    Based on a single person, employed in the private sector, under 65 with no additional tax credits:

    Income before tax €30,000; income after tax, PRSI etc €24,924.00 (83.08%).
    Income before tax £25,000; income after tax, PRSI etc £19,173.65 (76.7%), around €23,008.00.

    Income before tax €50,000; income after tax, PRSI etc €38,974.00 (77.95%).
    Income before tax £41,667; income after tax, PRSI etc £30,673.88 (73.6%), around €36,808.65

    Income before tax €80,000; income after tax, PRSI etc €50,801.00 (63.5%).
    Income before tax £66,667; income after tax, PRSI etc £45,644.68 (68.5%), around €54,773.62.

    Income before tax €120,000; income after tax, PRSI etc €70,719.00 (58.9%).
    Income before tax £100,000; income after tax, PRSI etc £65,311.15 (65.3%), around €78,373.38.

    Lecturer scales: (RoI) start at €45,000 and £33,000 (equivalent at exchange rate of €1.364)
    Senior lecturer scales: (RoI) start at €62,000 and £45,000 (equivalent at exchange rate of €1.378)
    Professorial scales: (RoI) start at €108,000 and £65,000 (equivalent at exchange rate of €1.66)

    The real headline figure should actually be the exchange rate. Border areas, and Belfast, will see a real shock in the retail trade if the euro continues to creep up against sterling (which you’d have to believe is very likely over the next while). People were throwing figures around of €400m for last year, if the rate starts to get closer to £1 to €1.30 over the next week, I wonder how attractive the North will be to southern shoppers.

  • Mack

    You’re tax figures are for single people, for married couples more high earners would pay less tax south of the border (although the inflection points are about to change again)..

  • John Ó Néill

    Mack, I just kept them the same so people could make some sort of like-for-like comparison of gross/net income tax regimes. If you want to re-do them for married people…?

    [I’d suggest people go find a tax calculator on the web if they are interested].

  • Neil

    The most stunning figure there is the unemployment benefit, assuming that the 196 euro figure is the net payment. It must suit plenty of folk out in the sticks not to work at all with that level of bru.

    In stark contrast to the payments received up here, more so if some people who can’t find a job within 12 months (must be workshy in that scenario as there are clearly plenty of jobs about – well, if you’re a Tory minister you’ll probably be ok) and have to make up a shortfall in their benefits to pay for housing executive rent. Food and fuel poverty will be another gift from the coalition of the damned.

  • Mack

    Not today – done it a few times already. Think I have a couple of comments to that effect on Progressive Economy.

    For married workers on 50k-75k or so they pay most tax in the UK, then Ireland and the least in Germany!

  • One who knows

    Which came first, the chicken or the egg. You could look at his as the high costs in Dublin are a response to high proporty costs, the high property costs are a result high wages (and caresless borrowing/lending). Therefore dropping wages should result in prices dropping?

    Just a thought!

  • Johnny Boy

    There are too many variables to take into account for thin information to be useful. Cost of living, exchange rate, minimum wage, taxation etc.

    For instance Taoiseach salary is 13.02 times ROI annual minimum wage. Prime Ministers is 11.96 times UK annual minimum wage, not a massive difference in those terms; but again probably useless information.