Thursday, 26 September 2019

Ceisteanna (49)

Joan Burton

Ceist:

49. Deputy Joan Burton asked the Minister for Finance if he has undertaken an economic evaluation of wage levels here; and if he will make a statement on the matter. [39048/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Minister for Housing, Planning and Local Government has agreed to take the part of the question pertaining to rents.  I will address the remaining part on the economic analysis of wage levels.

My Department monitors developments across all aspects of Ireland’s economy on an ongoing basis.  With regard to the labour market, my Department conducts regular analysis on wages and related matters, using official data from multiple sources.  

Ireland’s robust economic growth has seen consistent year-on-year growth in average wages since the beginning of 2016, with the pace of growth picking up through 2017 and 2018. The most recent data available show the average weekly wage grew by 3.5 per cent year-on-year in the second quarter of 2019.  In the earlier stages of economic recovery, growth in weekly earnings was primarily as a result of growth in hours worked per week, but recent data have shown much stronger growth in average hourly pay.  For instance, in 2018 average weekly earnings grew by 3.3 per cent, with average hourly earnings growing by 2.9 per cent.

Below the headline figure, the data show variation across sectors of the economy.  For example, recent quarters have seen strong growth in weekly earnings for workers in the ‘administrative and support services’, ‘information and communication technology’ and ‘transport and storage’ sectors.  Over the last 12 months, both weekly and hourly earnings are growing across all economic sectors reported by the CSO, showing the broad-based strength of Ireland’s current economic performance.

The latest macroeconomic forecasts published by my Department as part of the Stability Programme Update in April this year projected continued growth in average wages of 3 per cent for 2019, with further wage growth expected in the medium-term.  This is consistent with the other labour market elements of the forecast, such as continued growth in employment and a further decline in the unemployment rate.  This also indicates the existence of a ‘Phillips curve’ in the Irish economy - with the labour market closing in on full employment and the supply of labour becoming scarce, wages are increasing in order to attract or retain employees.  A new set of labour market projections and commentary will be published with Budget 2020.

Finally, I am fully alert to the possible risk of an overheating economy.  Indeed the Government’s Future Jobs Ireland strategy aims to maximise the supply of suitably skilled labour in our economy, boosting productivity and protecting our international competitiveness.