I suppose the first question is do we need to raise inflation in Ireland? Perhaps you could provide evidence of this requirement?
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The CSO data above shows that country is languishing very close to a deflationary trap. If deflation is not desirable at this time, then some inflation is.
Ever heard of overtime, bonuses, commission?
If you earn €30,000 pa to produce 30,000 cremeggs and then I ask you to change operations so that you now could produce 40,000 for the same money, you may or may not be agreeable to that. If I offer €5,000 extra in wages you may be more agreeable. As a consequence, wages rise followed by productivity increases.
So why state that higher wages reduce the debt burden?
Higher wages should reduce the debt burden but in practice rarely does (and human behaviour is to blame for this).
You can only get into debt if you borrow money. For sure, the more you earn the more confident you may be to borrow bigger sums. But thats why we are supposed to have financial regulation. So that borrowers and lenders dont get carried away with themselves.
How do you propose this should happen? Raising the minimum wage?
Raising the minimum wage would be a start. But I think the minimum wage in itself is inadequate. I do think there is a premium to be paid over and above the minimum wage for a worker who is reliable, punctual, good at their job, and who provides continuous service.
I'm not so sure about that - debt levels rose here due to availability of credit certainly, but this also happened at a time of wage increases. In fact, if wages have nothing to do with debt levels as you say, then would you foresee people borrowing more if they knew their wages were due to be cut?
Increasing wages for sure will give the earner confidence of taking on more debt, but it still should all be relative. If I earn €50000 I may think I can borrow €150,000 for a property. If I earn €150,000 I may think I can borrow €600,000. But its up to the bank (in their capacity as expert financiers) to tell me I would be out of my depth and at risk of negative equity.
Tell that the Dublin Bus and LUAS employees (soon to be followed by all other CIE company employees).
You should go to the Transdev Ireland website where they openly boast about all the productivity increases they achieved with the workers, during the period of pay freezes and increased revenue streams.
Dublin Bus is back in profit, what is there to be told?
Can you explain that please?
If im not mistaken, the offer of higher wages can act as a motivating force to produce more?
Different businesses have different cycles. The business I’m in thrived through the last few years but we are down by 40% on turnover from 18 months ago (hence the 45% pay cut I took). That is the opposite of what is happening generally for businesses selling into the Irish market.
Yes, we can all point to micro elements of the economy that work conversely to overall trends.
Yep, an FF government which was willing to make hard decisions; a rare thing. They got hammered though so they’ll be back to populism in future.
Targeting minimum wage workers for wage cuts could in no way be regarded as a 'hard' decision. Minimum wage workers were identified as an easy target.