Finance sector enjoyed pay hikes in crisis years as others took a hit
UNEMPLOYMENT rates soared and wages were slashed as Ireland’s economic crisis took hold, but new figures have revealed more than six out of 10 workers in Ireland’s financial services sector enjoyed a pay rise during the recession.
Another 60pc of public sector employees saw their salaries rise between 2010 and 2011, along with colleagues in the information and communications sector.
The wage hikes have been uncovered by academics from NUI Maynooth, who examined new data compiled by the Central Statistics Office from P35s during 2006 to 2011.
It showed more than 75pc of people who stayed in the one job enjoyed a rise in earnings for the three years before the crash.
However, this pattern changed dramatically with the onset of the crisis as the proportion of workers experiencing annual pay cuts increased to more than 50pc in both 2008/2009 and 2009/2010.
Professor Donal O’ Neill said figures for the finance sector “jumped out” with workers still experiencing some of the largest earnings growth during the crisis period.
“You would have expected it to have rowed back during the crisis, but our evidence is that didn’t happen,” said NUI Maynooth’s professor of economics.
Some 83pc of those in finance got a pay rise before the economy collapsed, with almost 60pc having their pay cut in 2008/2009. However, another 40pc still saw their wage increase and that number jumped to 61pc by 2010/2011.
“If you think of the groups most intimately associated with the crisis, construction and finance, you saw cuts in construction, but not finance,” Prof O’Neill said.
“We do not have an explanation for that at the moment.”
The data is proof that while thousands lost their job in the construction industry, those who remained also saw their incomes slashed, he said.
Almost 75pc of those had salary increases in 2005-2006, but that number plummeted to less than 30pc getting a rise by 2008/2009. At the same time 65pc suffered further pay cuts. More than half still faced another round of pay cuts in 2011.
The data examined pay freezes, cuts and rises across 16 areas, and highlights extensive pay cuts – up to 80pc – in public administration, education and health from 2008 to 2010 due to the pension levy and Croke Park pay agreement, before workers started to see an increase in rates in 2011.