Eamon Ryan
Ceist:19 Mr. Eamon Ryan asked the Minister for Finance the level of wage increases that can at present be sustained without adding to inflationary pressures. [12963/04]
Amharc ar fhreagraThursday, 6 May 2004
Ceisteanna (25)
Freagraí scríofa
All wage increases add inflationary pressures unless they are fully compensated by increases in productivity. Over the five years to 2003, economy-wide employee earnings rose by 37% in Ireland, compared to about 14% in the euro area. The impact on our international competitiveness of relatively higher pay increases in Ireland was cushioned to a large extent by the weakness of the euro. However, we are now faced with a much stronger euro. If we are to take advantage of international recovery then we must ensure that our competitive position is not harmed by any decisions we make in the current pay talks. We must ensure that we do not price ourselves out of the market. We must address our loss of competitiveness and face the challenges for investment and jobs that are, and will continue to be, posed by other countries with lower cost bases. Pay increases which are out of step with our trading partners will result in job losses. The lower inflation rates of recent times need to be reflected in the next pay agreement in a moderate level of increases.