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The lower paid

Posted on May 03, 2014 by Tom Healy

Tom Healy, Director NERI
Tom Healy, Director NERI

Eurostat – the official Statistical Agency of the European Union measures low pay as ‘those employees earning two thirds or less of the national median earning’. In 2010, at 20.7% Ireland (Republic) had the 10th highest rate of low pay as measured by Eurostat. By contrast, Sweden had a rate of 2.5% while Latvia had 27.8%. The EU27 average was 16.9%.  Who are the low paid and where are they in Ireland?  In our most recent Quarterly Economic Observer (Spring 2014) we have shown how low pay, in Northern Ireland, is concentrated in particular sectors (Hotels, Restaurants and Retail) and among particular groups (young, female, part-time). In the case of the Republic of Ireland the most recently available data on the distribution of hourly pay relates to the year 2009 as measured in the National Employment Survey.  Arising from a special request to the CSO special tabulations have been prepared. These indicate the following:

10% of all employees earned less than €10 an hour in 2009. 20% earned €11.85. The median (or average below which 50% of employees were paid) was €17.82 (Chart 1).  So, the low-pay threshold in 2009 was €11.88 per hour.

There were 320,000 low-paid workers (employees) in 2009.

 

 Three broad sectors stand in particular:

  • Accommodation and Food (104,000 employees in all in 2009 of which approximately 54,000 were low paid)
  • Wholesale and Retail (229,000 of which around 80,000 were low paid)
  • Industry (221,000 employees of which around 33,000 were low paid)

Taking the Accommodation and Food broad sector (this includes hotels and restaurants), the median average was €11.51 (Chart 2). One in ten employees in this sector were paid less than €8.71 an hour in 2009.

 

  Looking within Accommodation and Food and taking just one occupation, Sales staff, the extent of low pay is even more stark (Chart 3). In this case, the median was €10 per hour while 20% of such staff were paid less than €8.72 per hour – barely above the National Minimum Wage of €8.65 per hour.

 

In the wholesale and retail sector where low pay is also concentrated, the picture is not as acute as in Accommodation and Food. The median is higher, at €13.46. However, 20% of staff were paid less than €10 per hour.  It should be noted that Sales staff in this sector earned, on average, €12.05 per hour while 20% earned below €9.51.

 

It is not known how hourly rates of pay have evolved since 2009. In some cases, rates of pay may have fallen especially for those who are young, part-time (and more likely to be female).  More timely and detailed information would be helpful. It is hoped that the CSO will be in a position to publish more timely information on the distribution of earnings in the future.

In summary, out of an estimated 320,000 employees earning below the Eurostat ‘low-pay’ threshold in 2009 it is likely that close to one half of these work in the retail, accommodation and food sectors. However, it should be borne in mind that low pay is a feature of all sectors to a greater or lesser extent and is likely to have increased since 2009 especially in areas governed by zero-hour contracts, precarious work patterns and even in many sectors of the economy where new entrants are carrying out the same work as others for lower pay.

Posted in: JobsWages

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