Finian McGrath
Question:243. Deputy Finian McGrath asked the Minister for Jobs, Enterprise and Innovation his views on the principle that higher pay increases productivity; and if he will make a statement on the matter. [10057/15]
View answerTuesday, 10 March 2015
Questions (243)
Written answers
Productivity levels are an important determinant of what constitute sustainable pay levels in enterprises and productivity growth can support higher pay and allow the benefits of enhanced competitiveness to be shared, and support recovery in the broader domestic economy. For internationally trading enterprises that are price takers productivity and wage relativities with those in competing countries will impact the pay levels that can be sustained. Where productivity gains support higher pay there is evidence that a virtuous circle may result whereby employees are motivated to work harder, more capable and productive workers are attracted, fewer leave thereby reducing the costs of hiring and training new workers, quality and customer service may be enhanced, disciplinary problems and absenteeism may reduce as higher pay is associated with better health.
As the National Competitiveness Council have pointed out, the skills of the workforce are a primary driver of productivity and long-term competitiveness as is investment in innovation.