A barrier has been breached. Average weekly earnings have topped €1,000 in Ireland for the first time, according to the latest estimates from the Central Statistics Office (CSO) for the first quarter of the year.
That is up from just over €700 at the start of the CSO series in the first quarter of 2008 – earnings in cash terms actually fell in some quarters after the financial crash, then largely stagnated before an upward trend began in 2016 as the economy finally started to lift.
The figures offer some key messages about where the economy is and how households are doing.
1. Earnings are rising ahead of inflation: There is a clear gap between the rate at which average earnings have grown and prices have risen over the year, with earnings up 5.6 per cent and prices up by around 2 per cent. So real earnings are on the rise – by around 3.5 per cent on average over the year. Looking back over the past five years, average weekly earnings have risen by 28.3 per cent, while consumer prices are up by 21.5 per cent.
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With a small fall in the average number of hours worked each week, average hourly earnings across the economy are up by 5.9 per cent over the year to €31.72
2. The longer term: The standard of living of Irish households is always a contentious topic. Comparing earnings to the rate of inflation is instructive as it gives a broad picture of the changes over the years. Sitting behind this, of course, is the longer-term issue of how earnings and costs in the economy balance out for various families.
Looking at the longer-term change, average weekly earnings as measured by CSO data, have risen by slightly over 40 per cent since the series started in 2008. As the graphic shows, there was a difficult period after the financial crash when earnings were under pressure, then a period of a few years when not a lot happened – either upwards or downwards. And then there was a recovery after 2016 as the economy – and the jobs market – started to pick up.
On average, earnings have risen by slightly over 40 per cent since 2008, while prices are up by around 27 per cent. The key factor pushing up earnings over the longer term has been the strength of the jobs market and in particular the coming on stream of more well-paid, full-time jobs.
Separate research has shown that over the period since the crash, households that have done best are those that have benefited by having members working more hours through the week – for example by having a partner return to work, or a child leave education and take up employment. Over the past year or two, however, there also appears to have been a lift in earnings across the board as the jobs market tightened, growth was strong and employers had the cash to attract and retain staff.
3. Averages hide a lot: Both the level of pay and the rates of increase vary significantly from sector to sector – and within sectors. Over the past five years, for example, earnings in the information, communication and technology sector – including the big tech multinationals – are up by a striking 39 per cent while big domestic sectors such as wholesale and retail, construction and accommodation and food are all up by around 20 per cent. In one case the average well outpaces inflation, in the others it barely keeps pace.
When comparing sectors, it is useful to look at average hourly earnings, as this filters out the fact that in areas including hospitality and retail there is a lot of part-time work. The ICT sector is the top hourly earner – at €49.40 – while in accommodation and food the hourly figure is €17.50.
Also, of course, within sectors themselves there are big variations and it is worth noting that the averages can be skewed upwards in each sector by a relatively small number of high earners. (The data is collected from firms and for technical reasons the averages are means, rather than medians which would filter out this high earner impact).
4. Your individual rate of inflation: While the consumer price index measures the average rate of inflation of a “typical” basket of goods, we all have our “own” rate of inflation based on our spending patterns. Someone who took out a new rental lease in the last year, for example, will be facing a much higher increase in monthly bills than someone with their mortgage paid and less fluctuation in spending patterns. The inflation surge of 2022 hit less well-off households more as they spend a higher proportion of their income on food.
That said, the big hit to living standards from the surge in inflation during 2022 and early 2023, eased in part by Government supports, is now behind us. Consumers will note that in many areas prices remain high, or are even still rising in some, even if the rate of inflation generally has fallen, and that house prices and new rental costs continue to rise more sharply, hampering many younger people in particular. The hope is that a period when earnings exceed inflation will gradually help households. But for the housing situation to ease, a period when house prices and rents are static, or ideally falling a bit, is needed.
5. The wider picture: The CSO data measures gross earnings – in other words the cash paid out by firms before tax. Employees have also received some additional benefits with some reductions in the tax burden and also significant additional payments to families from the 2025 budget package in once-off supports, notably energy credits and two double weeks of child benefit payment. Previously these once-off payments were used to compensate for the surge in prices and continuing them protected people’s incomes in 2024. However now the Government has a dilemma: if it discontinues the payments, many households – particularly those with children – may well notice the difference at the end of this year. Their real or inflation-adjusted earnings from work are rising but they would no longer be getting the other income boosts.
So far Government Ministers have said that they intend not to repeat a “cost of living” package this year. This is based on the argument that the inflation surge has now passed. And that it is simply not affordable to continue with these payments – particularly the more expensive, universal ones – year after year.
However, this is likely to remain a contentious topic within Government and between the Government and Opposition parties in the run up to the budget in October. An indication of thinking may well be given in the Summer Economic Statement, due in early July, which outlines budget priorities.
6. The outlook: The jobs market is still strong and skills shortages remain in many areas – but it does appear to be cooling a bit due to the uncertainty caused by Trump’s tariff threats and the impact on economic growth.
In its latest economic outlook, AIB points out that the number of people at work has grown by 19 per cent over the past five years to 2.8 million people, close to 1 million higher than the low point of 1.87 million in 2012.
The bank’s economists now expect jobs growth to continue, albeit at a slower pace and point out that the latest jobs data from website Indeed suggests “waning employer demand, with new job postings falling 18 per cent year-on-year in May 2025, reflecting a broad-based slowdown in hiring activity across sectors.”
This suggests wages will continue to rise, though possibly a bit more slowly. If the Trump effect is more significant then of course the jobs market and thus earnings growth could be hit more seriously.
