In this blog, NERI economist Ciarán Nugent discusses the Structure of Earnings Survey and the new data that was published this week for the year 2022.
The Structure of Earnings Survey is a large-scale enterprise sample survey conducted every four years across EU members and several other European countries. New data was published this week for 2022, with breakdowns by broad age group, gender, sectors, occupations and education level. The dataset also allows comparison considering country specific living costs and by full and part time employment. In an Irish context, the survey covers just under 2 million employees.
The data shows hourly earnings in Ireland to be the 4th most unequally distributed out of a sample of 32 European countries (2022) behind Cyprus, Bulgaria and Latvia and that in the context of high-income European economies, Ireland continues to be an outlier in earnings inequality. The gap between top earners and bottom earners has widened significantly since the last round of data in 2018 and is higher than in any of the other rounds of the survey dating back to 2006.
In Ireland, the earner at the 90th percentile (this worker earns more than 90% of workers, or in the Irish case more than 1.8 out of 2 million employees) has a gross hourly rate of €49.23 (up 19% on 2018 in nominal terms), the third highest of any European country in the sample behind Luxembourg (€53.78) and Switzerland (€68.82). Top earners in Ireland earn 30% more than top earners in Germany (€36.92). In Sweden, the employee at the 90th percentile earns about 60% of their Irish counterpart (€30.71 an hour). Earnings at the 10th percentile (this employee earns less than 9 in 10 workers) saw just 14% nominal growth during the same period to €11.82 an hour.
In 2018, the worker at the ‘top’ (p90) earned 4.0 times the worker at the bottom. In 2022, this had increased to 4.2. For comparison, the next most unequal high-income labour market is Luxembourg where the ratio between top and bottom is 3.7. In Sweden it’s 2.2, Finland 2.4, Austria 3.0 and the Netherlands 3.1.
As the Living Wage based on the cost of a minimum essential standard of living was €12.90 an hour in 2022, at least 10% of Irish workers earn less. By Eurostat’s definition about 20% of Irish workers in 2022 were in low paid employment, 17.6% of male workers and 22% of female workers. Approximately 400,000 altogether.
Average and median hourly rates (excluding micro enterprises) are €27.31 and €20.11, up 19.3% and 13.0%. The average third level graduate earns €34.47 an hour. On average, Irish Finance and IT workers are among the highest paid of any sector in any EU country at €43.12 and €40.07 respectively. Both of these groups in Denmark are similarly compensated as are Finance workers in Luxembourg.
The median hourly rate for under 30’s was €15.56 in 2022, up 12% in 4 years, the 8th highest of 32 and for full-time workers under 30 it was €16.27, also 8th highest in the EU. In 2006 younger Irish workers were the third highest paid in the sample. Out of 32 countries, workers in Ireland under the age of 30 also have the 6th lowest wages relative to the country wide average despite a particularly stark difference in education profiles of younger and older workers in Ireland. The average full-time worker under 30 earns €20.28 an hour, 69.4% of the overall average, up from 65% in 2018, but still lower than in 2006 (72%). In Sweden and Finland, the ratio is around 78%, while in many Central and Eastern members younger workers earn between 85 and 99% of the average.
The median hourly rate for Managers under 30 was €16.05, for Professionals under 30 €23.66 and for Technicians and Associated Professionals under 30 €18.38.
The average hourly unadjusted gender pay gap, at 91% puts Ireland around mid-table. Irish female Managers earn on average 79% of male Managers, among Professionals it’s 92%, and among Technicians and Associate Professionals 87%. The gap is particularly pronounced is Service and Sales occupations, the second largest group of 9 occupational categories for women, where women make 71% of the hourly rate of their male counterparts. No country in Europe comes close to this disparity. Latvia is next at 84%.
While average gross earnings for all workers in Ireland were €26.29 in 2022 (including micro enterprises), the average hourly rate for those whose wages are subject to a national collective pay agreement was 32% higher, at €34.67.