There is now general agreement that on average wages in the public sector in Ireland are higher than in the private sector. Part of the reason for this is the fall in wages in the private sector due to the recession and part of it is due to the benchmarking process that was carried out in Ireland over the last 9 years. What is also becoming clear is that wages in the Irish public sector are high by international comparison.

In 2000 the Government set up a Public Service Benchmarking Body to compare wages in the public service with those in the private sector. This body was set up because many groups in the public sector were complaining that they were falling behind the private sector in terms of earnings

In 1999 and 2000 the Irish economy was growing rapidly with particularly rapid growth in building and construction and computing. There was a scarcity of workers in these industries and this led to very high wages for computing programmers and building workers in particular.

Young people in these industries were earning more than public service workers so groups such as teachers, gardai and nurses starting shouting loudly for wage increases. These increases could be justified to some extent because prices were rising at 6% each year and house prices were increasing at between 20% to 30% each year.

The report of the Benchmarking Body recommended that public service workers be given an average increase of 9%. This recommendation was a sham as it could not justify these increases with facts. Jim O'Leary, the economist on body resigned in protest.

However, In 2000 the economy was booming and tax revenues were flooding in to the Government. The Government bought off public service workers by giving this 9% increase.

Within a short period the earnings of workers in both computing and building started to fall. In March 2001 the boom in the computing industry came to an end with the crash in the share prices of all the major computing companies in the World.

The share price for Amazon fell by over 90% and a famous Irish computing company called Baltimore went bankrupt. This collapse in the computing industry brought sanity back into wages for computer programmers.

In 2004 six new countries joined the EU. This allowed East European workers to get jobs in the building industry. The inflow of workers from Eastern Europe meant that the acute shortage of building workers ended so even though the building boom continued until the spring of 2007, wages did not rise substantially.

The ESRI carried out a study comparing wages in the public sector in Ireland with those in the private sector and found that in 2006 workers in the public sector were paid on average between 20 and 30% more.

This did not prevent the Government giving even more to higher public servants. In 2007 the report on "Higher Remuneration in the Public Service" was published. This report was appropriately named as remuneration in the higher end of the public service is higher than it should be.

This report compared incomes of higher public servants with incomes in the then booming private sectors including financial services where by 2007 incomes had reached a grossly inflated level.

We now have the highest paid higher public servants in the world. John Hurley, for example, head of the Central Bank, is the highest paid central banker in the World.

John Hurley gets €368,703 per year. The head of the European Central bank is paid €345,252 per year, the head of the Bank of England gets €283,564 and the head of the US Federal Reserve Bank gets €186,600. How about that?

Irish Government ministers are also among the highest paid members of government in the World but I do not have exact comparisons for them.

We are in the Eurozone and Ireland has to be competitive with the rest of the Eurozone. This means that we should benchmark public sector incomes against those of public sector workers in Europe. The Public Sector Trade Unions know that Irish public sector incomes are much higher than in Europe so they will resist this type of benchmarking.

The first step in this new approach to setting public sector incomes should be for the Government to gather and publish detailed comparisons of Irish public sector incomes and those of public sector workers in the rest of the EU. When this information is widely available we then can make an objective assessment of how much wages in the public sector, including mine, should be cut.

- FELIM O'ROURKE