Dáil Éireann debate -
Thursday, 9 Apr 1992

Vol. 418 No. 6

Written Answers. - Compensation of Employees.

John Bruton

Question:

48 Mr. J. Bruton asked the Minister for Finance if he will outline the extent to which the growth of real compensation of employee per head in Ireland has exceeded the EC average in the period 1989 to 1991; and whether the rate of growth has any long term impact on employment levels in Ireland.

Minister for Finance (Mr. B. Ahern)

European Economy (Supplement A, No 11/12 1991) estimates that nominal per head compensation of employees rose 0.2 percentage points per annum more rapidly in Ireland than in the EC as a whole over the period 1989 to 1991 inclusive. Inflation as measured by the price deflator of private consumption, the measure used by the Commission, was 1.8 percentage points per annum higher in the EC than in Ireland over the same period. Because of this better inflation performance real compensation per employee here rose 2 percentage points per annum faster than in the EC as a whole in the period.

International cost competitiveness, in my view, is a crucial determinant of employment prospects. On the more normal measure of competitiveness — developments in hourly earnings in manufacturing industry expressed in a common currency — latest OECD data indicate that increases in Ireland over the period were almost one percentage point below the average for the EC as a whole. It is vital to our long term employment prospects that we maintain, and improve upon, these competitiveness gains which assisted the employment gains of recent years. The Commission estimates, however, underline the importance of moderation of incomes growth on an economy-wide basis.