Can we afford pay increases to match inflation?


Maybe because she (along with every other politician in the country) knows that the public sector is bigger and stronger than the government. The government cannot take then on because they will lose. It’s as simple as that.
 
Sherman said:
It seems a majority of the population felt that the competing 'products' on offer were not worth buying instead.
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Mary Harney's party is the Progressive Democrats. Nationwide they got 2.7% of the vote. That's hardly a majority.
 
Gautama said:
Mary Harney's party is the Progressive Democrats. Nationwide they got 2.7% of the vote. That's hardly a majority.
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You do know that they are the smallest party in a three party coalition, right?
 
Purple said:
You do know that they are the smallest party in a three party coalition, right?
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Yep, I know that.
But if you want to look at Mary Harney as...
a member of the Progressive Democrats: 2.7%, not a majority.
part of the government of the 29th Dail: 44.3%, not a majority.
part of the a three party coalition: 49%, not a majority.

Case closed and back to the original topic...

I remember hearing that back in Ireland of the 80ies people in good jobs used to get pay increases three or four times a year, to match inflation which was running at 17%, is this true?
The economy was a basket case back then, yet efforts were made to match inflation.
Surely it's vital that if a company is making profits, its pay increases should at least match inflation? Otherwise they are really insulting their employees.
Taking my own case, this was the first pay review where I actually spoke money in exact figures. The company had it's best year ever, but I didn't get the 11% I was looking for, and had to settle with 6.5%.
One sweetener though, when I "do the math" on the figures, they are actually giving me 7.5%, not the 6.% stated in the letter
 
Gautama said:
Yep, I know that.
But if you want to look at Mary Harney as...
a member of the Progressive Democrats: 2.7%, not a majority.
part of the government of the 29th Dail: 44.3%, not a majority.
part of the a three party coalition: 49%, not a majority.
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That’s why it’s called representative democracy. Our single transferrable vote is about as representative as any system can get.
Gautama said:
Case closed and back to the original topic...
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yea...

Yes, that’s a large part of the reason that the country was in that state in the first place.
Gautama said:
Surely it's vital that if a company is making profits, its pay increases should at least match inflation? Otherwise they are really insulting their employees.
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If those pay increases wipe out the profit and endanger the jobs of its employees is it still a god idea?
Well done. If you are worth (at least) 7.5% more than you were when you got your last raise then it is money well spent. If not it’s irresponsible and shows weak management.
 
Purple said:
If those pay increases wipe out the profit and endanger the jobs of its employees is it still a god idea?
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Nope, but if those pay increases do not wipe out the profit its pay increases should at least match inflation.

Purple said:
Well done. If you are worth (at least) 7.5% more than you were when you got your last raise then it is money well spent. If not it’s irresponsible and shows weak management.
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Thanks. Pension was upped by 1% as well so in the unlikely event that pay increases wipe out the profit and endanger our jobs it's reassuring that that aspect is closed off.

But going back to the topic, if for arguments sake that inflation is running at 5% per annum, an nobody in Ireland is getting any pay increase, and this goes on for, say five years, what's the advantage of this?
To pack off the foreign nationals to their home countries and elsewhere, and us with them? There's less merit in this. We can't afford this either.

That would be going from "talking ourselves into a recession" to looking forward to a depression.
 
Gautama said:
But going back to the topic, if for arguments sake that inflation is running at 5% per annum, an nobody in Ireland is getting any pay increase, and this goes on for, say five years, what's the advantage of this?
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If that happened then we would be 25% (plus compounding) more competitive than we would have been if we had taken pay increases in line with inflation. I don't know if it would be worth it as a society but if international inflation over the same period was say 2% then we could not afford the loss of competitiveness that 5% pay increases would cost us.
GM are trying to get rid of 74'000 employees in the USA because of high wages. In the end it is just not sustainable.
 
Makes sense I guess.

This whole pay/job market thing is doing me head in.
Spoke to a recruiter today (one of that few I've spoken to that really seemed to know her stuff), seems that I'm being over paid for what I do. Obviously, this sounds good, but leaves me a quandry. I want to leave, but a 15-20% pay cut would be financial suicide, given that I have a mortgage.
 

Get a hobby and try to keep the smile off your face
 
I read [broken link removed] this morning that Hibernian are considering moving 250 jobs to India in a cost-cutting drive. I consider this a major threat to our economy, if other employers follow suit.

Any ideas as to what we can do to nip this in the bud before it starts happening to ever-increasing employee numbers?
 
It's way too late. All we can do now is sit back and watch them go. The unions may dictate to the government that they want to speed things up a bit by giving those who have almost total job security even more pay increases but stopping the trend would require the government to actually run the country and the vested interest groups would never let that happen.
 
A large company close to me "moved operations" in recent times.

An employee (active in the union) of this same company was complaining about paying people a pittance to do jobs in 3rd world countries and showing no loyalty to Irish workers etc etc.

I might have some sympathy if the same employee hadn't previously gleefully informed me that they all "didn't do a tap" in his former company.

If the company isn't productive, but can be, what do people think is going to happen? I'm not saying this is always the case but certainly seems to have been here.
 
Liam, my company followed all the "wisdom" , move from being a black box factory to more added value, R&D, European Distribution and European Finance, higher value products, move up the value chain etc; We worked and achieved all these things. We only lasted 5 years longer. 2002 -2207. We have the markets, the customers and the profits. Alas, due to the fact that MORE profit can be made in Hungary and Mexico we are just completing a year long shut down. So it was a pure cost driven decision for more profits in the future. I am not sure how to "nip it in the bud". I just took a couple of minutes over my 11's break to consider if I had any ideas and no I don't I feel I have being trying for 25 years to "nip it in the bud". Maybe it is a question of trying, as we did, and get another 5 years out of every place. I do think that every worker (at all levels) up to and including the MD needs to do way more in protecting the jobs we have by doing a great days work every day, not just "clockwatching" every day. How many people go home saying I earned my crust today, If everyone was 100% honest I believe we could improve productivity by 30% p.a. by everyone working togerther. Do I believe it will happen NO, people are not interested in working that smart and hard. I know there are 20% of people who are worked to the bone however I really do challange the 80% to have a hard look at the daily work output. ... When I visit Eastern Europe, Mexico, and China I see work rate that is scary for the money they get paid. The world or the government does not owe us a living..
We have to add value ourselves, every day.
 
LDFerguson said:
Fan of our current Government then?
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Nope, but what's the alternative?

Martinslan, good post, all very true.
What we tend to forget is that before those jobs came here they were (mostly) in the USA. The people who worked there did all the things you did and their parent company still closed them down to relocate to a lower cost economy; Ireland.
At some stage in the early 90's we forgot this and started to believe the line of bull that the IDA sell about our highly educated workforce etc. We forgot that businesses are in business to maximise profits in the medium term and that's all they are in business for. The day our high wages, high cost of doing business and infrastructural deficit outweigh our low corporation tax is the day that these companies up sticks. We have to remember that's now we got them here so we can't moan about it when they leave by the same door.
We had a golden opportunity to create a sustainable economy and build the quality of life that depth of wealth gives a country and we blew it.
 
Interesting.

I agree with Martinslan's comments re productivity, but I fear that trying to get the percentage of under-performing workers to raise their game would be akin to trying to convince the thousands of road-fools that driving dangerously kills innocent people.

Part of me thinks "wage freeze" for a few years. I know it would be unpopular but I suspect that being out of work with poor prospects would be less popular again. But then a wage freeze would give an unfair advantage to self-employed folk (like myself) who don't have set "wages" per se. Is there precedent from other countries as to how a wage freeze might work in practice?
 
The unions would slap the government back into its box if it tried to freeze wages.
 

Thats the problem with discussions like this. Talk about wage freezes and wage increases less than inflation usually impact on certain parts of the economy more than others. I earn a good six figure salary. If my company turned around and said I wouldn't be getting a pay rise or one of 1-2%, I wouldn't be happy but I would survive. Would people on lower salaries be able to say the same thing?

One other problem I have is that if you are looking at the people doing the bleating on about productivity and the need of wage restraint, they don't exactly practice what they preach. Look at politicians and how much their wages have risen despite the publicity move of deferring their latest one for a year. Look at senior management and executive pay levels to see how the gulf between the higher paid and the rest is just getting larger and larger (I include myself in that). I have no problem with people earning vast amounts of money but I do feel uncomfortable that parts of our society didn't get their fair share of the economic success and now that it is turning, they are being asked to take the majority of the pain. By all means discuss wage freezes and lower increases but the example needs to be set at the top by the Government and IBEC.
 
Sunny said:
By all means discuss wage freezes and lower increases but the example needs to be set at the top by the Government and IBEC.
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I agree. I took a 30% pay cut last year rather than sack anybody or ask them to cut their wages.
But having said that if a person builds up a business they deserve to reap the rewards. Those who take the less risky option of working for someone else cannot expect to get paid the same. In order to have a successful economy we have to reward risk takers.
 

No argument there.
 
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