Earnings Analysis using Administrative Data Sources 2020

Impact of COVID-19 on earnings statistics

The COVID-19 pandemic and the restrictions applied in response to it had a significant impact on the Labour Market in 2020. Earnings statistics for 2020 and comparisons with earlier years are impacted by changes in the composition of the labour market across 2020 and when compared to 2019 and earlier years. The level of earnings has also been impacted by COVID-19 income support schemes introduced in 2020.

These factors should be taken into account when considering the results presented in this publication.

Wage Subsidy Schemes 

Earnings of certain employments impacted by the COVID-19 pandemic were supported by the Temporary Wage Subsidy Scheme (TWSS) which operated in two phases, a transitional phase from 26 March to 3 May and an operational phase from 4 May to 31 August 2020, and the Employment Wage Subsidy Scheme (EWSS) which replaced the TWSS and became operational from 1 September 2020.

The COVID-19 Pandemic Unemployment Payment (PUP) scheme, which is administered by the Department of Social Protection (DSP), provides a social welfare payment to those who lost their employment because of the COVID-19 crisis. Any payments related to the PUP scheme are not included in this analysis. Such payments are paid by DSP to a person who has lost income from employment and where no attachment in the form of an employment contract is maintained between the employer and employee.

At some point in 2020, the Wage Subsidy Schemes (WSS: TWSS or EWSS) directly supported 29.9% of employments which were active in October 2020. The proportion of employments supported varied significantly across the different sectors of the economy. The  sectors with the highest proportion of employments supported were Accommodation & food services (81.9%), Arts, entertainment, recreation & other service activities (55.9%), Transportation & storage (51.0%) and Construction (50.2%). See Table 2.1 and Figure 2.1.

WSS payments accounted for 4.3% of total earnings across all employments. Again this varied across economic sectors. The  sectors where WSS payments represented the highest proportion of earnings were Accommodation & food services (31.8%), Arts, entertainment, recreation & other service activities (14.6%), Transportation & storage (9.3%) and Construction (8.5%). See Table 2.1 and Figure 2.1.

Impact of WSS on change in earnings 

With WSS supports included in earnings for 2020, where applicable, median weekly earnings increased by 5.2% between 2019 and 2020. When WSS supports are excluded from employee earnings in 2020 median weekly earnings decreased by 1.1%.

The difference in the change in earnings with WSS payments included or excluded varies significantly across sectors. With WSS payments included in earnings only one sector, Transportation & storage (-1.9%), showed a decrease in median weekly earnings. When WSS payments are excluded median weekly earnings decreased in eight of the 13 sectors.

In the Accommodation & food services sector median weekly earnings increased by 4.8% when WSS payments are included in earnings, compared to a decrease of 35.8% when WSS payments are excluded. The sector with the second largest difference is Arts, entertainment, recreation & other service activities where median weekly earnings increased by 5.8% when WSS payments are included in earnings, compared to a decrease of 25.1% when WSS payments are excluded. See Tables 2.2 and 2.3 and Figure 2.2.

Similarly, with WSS supports included in earnings for 2020, where applicable, mean weekly earnings increased by 6.3% between 2019 and 2020. When WSS supports are excluded from employee earnings in 2020 mean weekly earnings increased by 1.2%. See Tables 2.4 and 2.5.

Change in employment and earnings, 2019 - 2020

When considering the change in earnings between 2019 and 2020, it should be noted that there may be a compositional effect due to the significant changes in the number of active employments in certain sectors between the two years. The composition of the labour market in 2020 was very different to the composition of the labour market in previous years. The changes in average weekly earnings in any sector may be impacted to some degree by those employments that have left/joined the sector having lower/higher average earnings than those employments that remained in the sector in the years being analysed.

Comparing 2019 and 2020, the number of active employments decreased by 4.4%. The number of active employments decreased in six of the 13 economic sectors between 2019 and 2020. The largest decreases were recorded in the Accommodation & food service sector (28.9%) and the Arts, entertainment, recreation & other service activities sector (15.6%). See Table 2.6.

Between 2019 and 2020, median weekly earnings increased by 5.2% across all employments. Median weekly earnings increased in 12 of the 13 economic sectors between 2019 and 2020. The largest rate of increase was recorded in the Financial, insurance & real estate sector (6.2%). Transportation & storage (-1.9%) was the only sector with a decrease in median weekly earnings between 2019 and 2020. See Table 2.6.

Note: An active employment is one that was active in October of the reference year. Earnings included in this analysis are gross earnings, before deductions such as income tax, and include any taxable benefit in kind. Unless otherwise stated earnings included in this analysis are inclusive of WSS where applicable.

Analysis of employments that were active in both 2019 and 2020

To provide further context, and taking into consideration the compositional effect mentioned above, an analysis of earnings for employments that were active in both 2019 and 2020 was prepared and is presented below. For each year, a matched dataset was created of all employments that were active in both years.

For employments that were active in 2019, 72.9% were also active in 2020. The proportion of employments active in both years varied by sector. The sector with the highest proportion of employments active in both years was Public administration & defence (90.8%), while the sector with the lowest proportion was the Accommodation & food service sector (47.5%).

For employments that were active in both 2019 and 2020, median weekly earnings increased by 2.2%. Median weekly earnings increased in 10 of the 13 economic sectors between 2019 and 2020. The largest rates of increase were recorded in the Education sector (5.9%) and the Information & communication sector (5.5%). The largest decrease was recorded in the Transporation & storage sector (-4.0%). See Table 2.7.

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