Average Irish salary of 38,000 is clearly not correct

jim

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Purple, just to clarify your question...

Are you asking if future pension entitlements are taken account of in determing todays avg salaries?
 

NoRegretsCoyote

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It would be great if the CSO (and the media) made the distinction between part-time and full-time earnings.


Average annual earnings for full-time employees in 2018 were €47,596 (up 2.6% on 2017) while the average for part-time employees were €17,651 (an increase of 3.5%). See figure 5 and table 5.

There are very few employees at or around the average of 32 hours a week. There will be a big cluster around 40, with part-time mainly bunched from 15 to 25.

I think the average for full-time earnings of €47.6k is the relevant benchmark for assessing mortgage affordability, etc. Pretty much every mortgage application contains at least one full-time applicant.
 

jim

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Surely the correct figure to take from this is the 37.6k ie the earnings figure? The 47.6k figure includes "other labour costs" and so is the wrong figure to take for this purpose.
 

NoRegretsCoyote

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Surely the correct figure to take from this is the 37.6k ie the earnings figure? The 47.6k figure includes "other labour costs" and so is the wrong figure to take for this purpose.
No it's not. It's the full-time earnings number (excluding other labour costs).
 

jim

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Apologies i was looking at wrong figure. That seems a lot higher thougg than the general public perception (or perhaps just my own previous perception) that the avg industrial salary was about 35k.
 

Purple

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Purple, just to clarify your question...

Are you asking if future pension entitlements are taken account of in determing todays avg salaries?
Employer contributions to pensions are a wage cost. If the pension is a DC type the cost is added in the figures quoted. Given that DB pensions are far more expensive the real cost of funding them should also be added when total wage costs are calculated. The most extreme example is people like Gardai where if the cost of their pension is added to their wages the value of their overall package is up to 180% of their calculated income.
In that context wages in Ireland are actually significantly higher than the figures quoted.
 

jim

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Employer contributions to pensions are a wage cost. If the pension is a DC type the cost is added in the figures quoted. Given that DB pensions are far more expensive the real cost of funding them should also be added when total wage costs are calculated. The most extreme example is people like Gardai where if the cost of their pension is added to their wages the value of their overall package is up to 180% of their calculated income.
In that context wages in Ireland are actually significantly higher than the figures quoted.
I understand what you mean. However, the cost to the employer of providing a future pension is not relevant in calculating ones earnings of today.

When someone asks what you earn you simply state your annual salary, you don't calculate what your employer contributes for your pension and add that on.
 

Purple

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I understand what you mean. However, the cost to the employer of providing a future pension is not relevant in calculating ones earnings of today.

When someone asks what you earn you simply state your annual salary, you don't calculate what your employer contributes for your pension and add that on.
If I was offered a job paying €80,000 plus 10% employer pension contribution then they would be paying me €88,000, €8,000 of which would be paid into my pension. If they paid my health insurance as well and provided me with a car allowance that would also be added onto my pay. My earnings would be salary + pension contribution + car allowance + health insurance cost. The same applies to those with DB pensions and other perks and flat rate, and often pensionable, allowances which they would otherwise have to pay for themselves. They are income.
 

NoRegretsCoyote

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If I was offered a job paying €80,000 plus 10% employer pension contribution then they would be paying me €88,000, €8,000 of which would be paid into my pension. If they paid my health insurance as well and provided me with a car allowance that would also be added onto my pay. My earnings would be salary + pension contribution + car allowance + health insurance cost. The same applies to those with DB pensions and other perks and flat rate, and often pensionable, allowances which they would otherwise have to pay for themselves. They are income.
The CSO data clearly list 'other labour costs' which include things like training, company cars and employer pension contributions.

I think they have a technique for calculating the implicit value of a DB pension.
 

Purple

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The CSO data clearly list 'other labour costs' which include things like training, company cars and employer pension contributions.

I think they have a technique for calculating the implicit value of a DB pension.
That's the point I'm making; "other labour costs" do not include the cost of DB pensions so the real average salary, as per the title of this thread, is much higher than €38,000. The real average salary of a nurse is over €70,000 when pension costs are taken into account. The real salary for a Garda is over €100,000. The average salary in the ESB is around €90,000 before the value of their gold plated pension is taken into account so their real salary must be well over €120,000 a year. ALl that needs to be added to the total before real incomes can be calculated. I don't know what that does to the total average but I would guess that it will increase it significantly.
 

NoRegretsCoyote

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@Purple

I looked up the CSO methodology. They don't in fact seem to take account of the implicit value of a DB pension.

Public service workers do actually make pension contributions (just not into a fund) and these are counted as 'other labour costs' by the CSO. The PRSI they pay is also counted.

Whether these contributions actuarially pay for the DB pensions in full is another matter (almost certainly not) but it's not fair to say that nothing is counted.

Other CSO data suggest only a quarter of the workforce has a DB pension from current employment.
 

Protocol

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Official data released today in an article in the independent says that Irish average salary is now 38,600 euros. However this cannot be correct as it is also the case that only 22 percent of taxpayers pay tax at the higher rate of circa 36,000 euros. The 22 percent must correct as it is hard data from revenue of actual tax paid. It cannot be the case that 38,600 is the average salary in Ireland when almost 80 percent of taxpayers earn less than this. Either the official statisticians cannot do basic maths or they are excluding many people from their data set in order to make the average salary appear much larger than the reality.
The CSO does not report "average salaries" - it reports average earnings.

Somebody could be on 40k basic salary, but earn 48kk when overtime, bonuses, are included.

Also note that income tax payers includes many people who do not work.

There may be 2.2m people at work, but there may be 3m people in the income tax system.
 

Protocol

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an article in the journal about cso statistic showing average irish salary of 39,000 per year met with almost universal ridicule in the comments section. Most people do not see it as correct from their own experience, many are asking why are the CSO not publishing the median salary . I think its another case of leprauchan economics
Eurostat do publish median earnings for Ireland.

The CSO publish median incomes.

NB: income is not the same as earnings.
 

Protocol

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an article in the journal about cso statistic showing average irish salary of 39,000 per year met with almost universal ridicule in the comments section. Most people do not see it as correct from their own experience, many are asking why are the CSO not publishing the median salary . I think its another case of leprauchan economics
Again, to be clear, the CSO data does NOT show average salaries of 39k, it shows average earnings.
 

Protocol

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Protocol, I had a less than comprehensive read through of the data you posted and I have one question; Is the value of DB pensions added to the earnings, as they are for DC schemes? If not then real earnings for many in areas such as the Public Sector, Semi-State's and Banks are underestimated so the real figures will be considerably higher.


Wages and Salaries
All wages and salaries payments are gross (i.e. before deduction of income tax and employees' PRSI contributions and levies such as the public sector pension levy). In the analysis, the total wages and salaries are divided into:
- Regular earnings: payments made regularly at each pay period during the year, excluding all irregular and overtime earnings.
- Overtime earnings: payment for hours worked in excess of normal hours.
- Total earnings excluding irregular earnings: regular earnings + overtime earnings.

- Irregular earnings: bonuses which are not paid regularly at each pay period. For example: end of quarter or year productivity bonus.
- Apprentice/Trainees earnings: total of apprentices & trainees' regular wages and salaries, overtime and irregular bonuses and allowances.
- Total earnings: total of regular earnings, overtime earnings and irregular earnings.
Other Labour Costs
Other labour costs are costs to the employer, in addition to wages and salaries, of employing labour. They include the below categories:
- Statutory social contributions: statutory employers’ PRSI including the social security contributions for apprentices/trainees.
- Non-statutory social contributions: payments made by enterprises on behalf of their employees which include pension fund contributions, life assurance premiums, income continuance insurance, redundancy payments as well as other employee related payments.
- Other expenses: other employee related payments e.g. study grants, etc.
– Benefits in kind (BIK); net cost of all goods and services made available to employees by the employer. For example, payments for private use of company cars, stock options & share purchase schemes, voluntary sickness insurance, staff housing and other free or subsidised benefits (e.g. canteen facilities, childcare provision, health costs). BIK is included as earnings by Eurostat for the Labour Costs Survey and the Labour Costs Index.
- Subsidies and refunds: amounts received by enterprises intended to refund part or all of the cost of wages and salaries and training costs. These may include training subsidies from SOLAS or Job Bridge as well as refunds from the Department of Social Protection (DSP) for sick and maternity leave. These are deducted from the firms’ labour costs in the analysis.
 

Protocol

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It reports gross earnings, and labour costs.

Labour costs = gross earnings + er PRSI + other labour costs

It does not report "salaries".
 

Purple

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It reports gross earnings, and labour costs.

Labour costs = gross earnings + er PRSI + other labour costs

It does not report "salaries".
The cost of a DB pension may be deferred but it is very real. Therefore it should be included.
 
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