Bruton warns across-the-board pay rises would not be appropriate

Across-the-board pay rises throughout the economy would not be appropriate at present, Minister for Jobs Richard Bruton has indicated.

In an answer to a parliamentary question prepared for delivery last night, the Minister said it was vital any wage increases negotiated were not excessive, did not hamper the emergence of job opportunities, increase costs locally or impact on competitiveness internationally. He said a return to wage bargaining was already visible in certain parts of the economy but warned that Ireland had to be careful that competitiveness gains secured over recent years were not eroded.

Mr Bruton also said it could be argued that further competitiveness improvements in some areas was needed. "According to the 2013 Forfás report on labour market competitiveness, labour costs in Ireland remain above OECD averages. The report found that Ireland has the 17th highest total labour cost level in the OECD-32 and the 11th highest net wage level in the OECD-32."

Some sectors of the economy were expanding at a faster pace than others, he added, while some were only beginning to stabilise and return to growth.

Mr Bruton said he noted the view of the employers group Ibec was that local bargaining based on company-level realities was the appropriate manner in which to deal with wage pressures at this stage. “It is my sense that firms and employers are taking stock of how the next 24 months will possibly pan out. Each assessment will be different and I do not believe there is a homogeneous model for Irish business at the moment.

“Rather, I think employers must make their own assessments based on their personal experience of how their own business and sector is performing. These assessments, in turn, will inform their view as to the level of wage increase, if any, they see themselves as being able to afford.”

Mr Bruton said sight must not be lost of the fact that Ireland’s economy had become critically uncompetitive in the five years up to 2008.

On Monday Jack O'Connor, the leader of the country's largest trade union Siptu, said it would continue its campaign for pay increases in profitable employments across the economy in order to improve living standards for members, grow the economy and create jobs.

He said Siptu was not involved in any talks with the Government on a deal for tax cuts in return for a pay freeze, as had been suggested in some media reports at the weekend.