Dáil Éireann debate -
Wednesday, 10 Jun 1998

Vol. 492 No. 2

Written Answers. - Construction Industry Wages.

Richard Bruton

Question:

49 Mr. R. Bruton asked the Minister for Finance if his attention has been drawn to recent trends in wage levels in the construction industry which indicate a 20 per cent increase in wages in the past 12 months; whether there is evidence of similar trends in other sectors; whether this is consistent with the commitments under Partnership 2000; and if he will make a statement on the matter. [13498/98]

Minister for Finance (Mr. McCreevy)

Construction industry wages have been increasing at a much faster rate than those in other sectors. The increase of 19.1 per cent reported by the CSO for the year to December 1997 includes both an increase in the hourly rate of 14.1 per cent and an increase in hours worked of 4.5 per cent. The increase in hours worked can lead to increased overtime payments with a resultant impact on hourly rates. An increase in the rates of pay was agreed between the Construction Industry Federation and the unions, including special pay increases for electricians and apprentice electricians. Some of these were due earlier in the year, but were not implemented until the last quarter.

An increase in earnings in a sector above the percentage terms of Partnership 2000 does not of itself, mean that the terms of Partnership 2000 are not holding. For example, in a sector with strong output and employment growth, as has been the case in construction, and with high mobility of staff between firms and skills shortages, recruitment rates may be forced up to attract in new workers. Increases in the average rates paid as a result of this would not be the result of breaches of Partnership 2000. It is likely that some element of the increase in rates in the construction industry is due to this. While they may not be in breach of the terms of Partnership 2000, such increases would, however, have the potential to put pressure on rates in the industry and the economy generally and this would be of concern. There is no evidence of similar trends in other sectors for which CSO data is available: manufacturing-industrial, banking, insurance and building societies and the public sector. The latest CSO provisional published data for industrial weekly earnings indicates that the year on year increase to September 1997 was 4.1 per cent. Part of this increase may reflect changes in the structure of employment that would affect basic levels of earnings. Earnings in banking, insurance and building societies increased by 2.8 per cent in the year to September 1997. The year on year increase in public sector earnings, excluding health, was 4.3 per cent to June 1997. The increase in the public sector would include an element resulting from the settlement of certain PCW local bargaining negotiations, as well as the provisions of Partnership 2000.

While there is no evidence that the commitments under Partnership 2000 are not being maintained, there is obviously no cause for complacency. The increases in the construction sector in particular, are a cause of concern if they put pressure on rates elsewhere in the economy. All parties to Partnership 2000 must remain vigilant in ensuring that the commitments entered into continue to be observed.