Is it time for wage increases?

Firefly said:
Lidl is a case in point alright. It's clear from shopping there (and in Aldi) that their staff are engaged and deliver. A very efficient & profitable business so wages can be easily absorbed.
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Exactly; as long as people are adding more value then wage increases can happen without reducing productivity.
 
On BS's larger point about wage increases; as long as it happens on a global level I'm all for it but Ireland should follow, not lead, as we are already a very high wage economy.
 
Firefly said:
I agree with this and since 2008 that's exactly what we have done. Now we have increasing employment, falling unemployment, we're almost balancing our books and we have the fastest growing economy in Europe. If you believe in counter-cyclical fiscal policy then surely now is the time to slow down and be prudent? Afterall the EU has told us not to engage in the spending that it thinks most of the EU should..
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And despite the increasing employment, the falling unemployment, the balancing of books, the fastest growing economy in Europe, we still have near to 0% inflation. And long term 0% inflation is just as dangerous for an economy as inflation of 4-5%. I don't think most sensible people are calling for the money to be thrown around and the recent disputes in Luas and the public sector do smack of political grandstanding last seen with FF. But that doesn't mean that anyone suggesting that wages need to rise are talking through their hat....
 
Firefly said:
Lidl is a case in point alright. It's clear from shopping there (and in Aldi) that their staff are engaged and deliver. A very efficient & profitable business so wages can be easily absorbed.
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Its not just them though is it? There is a clear trend in the sentiment for wage increases, not just from unions and workers, but also at a political and business level also.
What is happening in Lidl and elsewhere is more to with economic forces, rather than a desire for employers to have to pay higher wages.
When your employees cannot afford the rent, childcare, mortgage etc, then its bad for business all round.
 
I expect We will have to increase tax on the top 20% who for the most part work in the high profit sectors/ Because the wage increase at the top will feed down and have to be absorbed by companies on lower margins who cannot pass on the higher cost .This will hold back wage increases in these sectors. Any company who can move out of Ireland in this position should already be gone or planning to go if they can. I would agree with TheBigShort Euro will break up.If companies think Like TheBigShort and expect Minimum Wages to Hit 18 Euro in Ireland by 2020 .Company now paying 14 to 17 Euro need to be planning to move out of Ireland as fast as the can.Ireland is no place for companies operating on low margins like you have in other EU Country's.
 
Sunny said:
And despite the increasing employment, the falling unemployment, the balancing of books, the fastest growing economy in Europe, we still have near to 0% inflation. And long term 0% inflation is just as dangerous for an economy as inflation of 4-5%. I don't think most sensible people are calling for the money to be thrown around and the recent disputes in Luas and the public sector do smack of political grandstanding last seen with FF. But that doesn't mean that anyone suggesting that wages need to rise are talking through their hat....
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Wages here can only grow if wages everywhere are growing. We cannot increase wages if they are not increasing faster in the countries we trade with.
 
It looks like Trump will stimulate the US economy with massive infrastructure investments and China may need to stimulate their economy as well. If they can avoid a trade war that will cause oil prices to rise which in turn will cause commodity prices to rise. This will lead to global inflation and knock-on growth and inflation here. If that happens we will have inflation which will eat away at real debt levels without hurting our competitiveness.
The Donald will give you what you want DB. How does that make you feel?
 
Very interesting article on average wage Hourly levels across EU in last mondays Irish independent. Ireland in 2nd place Behind Denmark .Ireland Over 20 Euro hour. Germany 15 Euro.UK 14 Euro per Hour.Ireland pays top 20 %higher wages than any other country .A must read for anyone posting on here .If Euro breaks up New Irish punt well need to be devalued by about 30%.
 
Eurostat data on median gross hourly earnings 2014

Median_gross_hourly_earnings%2C_EUR_and_PPS%2C_2014_V3.png
 
Note that although at 20.20 ph, our median gross hourly earnings were the second highest in 2014, we have a lot of low earners, so our labour costs are not second highest.

See table below.

Over 20% are defined as low earners in Ireland.
 
The next table is some interesting data on the distribution of earnings.

Disparities in gross hourly earnings within a country can be measured using deciles, and in particular the lowest and highest deciles, which correspond to the 10% of employees earning the least (D1) and to the 10% earning the most (D9). As a consequence, a high D9/D1 interdecile ratio indicates large disparities. D1 is the maximum gross hourly earnings received by the 10% of employees earnings least. D9 is the minimum gross hourly earnings received by the 10% of employees earning most.
 
The top earners in Ireland are very well-paid, compared to the rest of the EU.

Even though our median is 2nd highest, our 90th percentile is the highest, at 43.60 per hour.

So high-earners in Ireland are overpaid compared to the EU averages.

Irish workers earn more than their EU neighbours, but the premium for the top 10% in Ireland is even more.

This comes as no surprise, when you hear the legal/medical/accountancy/brokerage fees discussed in many threads.
 
Protocol said:
The top earners in Ireland are very well-paid, compared to the rest of the EU.

Even though our median is 2nd highest, our 90th percentile is the highest, at 43.60 per hour.

So high-earners in Ireland are overpaid compared to the EU averages.

Irish workers earn more than their EU neighbours, but the premium for the top 10% in Ireland is even more.

This comes as no surprise, when you hear the legal/medical/accountancy/brokerage fees discussed in many threads.
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That's all meaningless unless it's measured against productivity.
We have some very high earners because of the "professions" as well as some sectors which are open to real competition but are very productive. We have some very low earners because we have so many under educated and unskilled people in the workforce.

We also have the highest level of social transfer in the EU so net incomes (after tax take and welfare handouts) is very even here.
 
Is there any evidence that our solicitors/doctors/CEOs/accountants/landlords are more productive than in every other EU country?

Or is it that their high pay is as a result of restrictive practices and cartels? And too high commercial rents?
 
Protocol said:
Is there any evidence that our solicitors/doctors/CEOs/accountants/landlords are more productive than in every other EU country?

Or is it that their high pay is as a result of restrictive practices and cartels? And too high commercial rents?
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I'd say it's the latter but I only have personal experience to support that.
 
I suspect the data in the tables above are badly distorted - the note says it refers to enterprises with 10 employees and more. I believe that there are a particularly high number of very small enterprises here, and I'd be very surprised if discounting these wouldn't have a significant distorting effect.
 
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