You never said that. You said wages had nothing to do with debt.
Is it time for wage increases?
- Thread starter TheBigShort
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You never said that. You said wages had nothing to do with debt.
And AMEN to that! Can you imagine where we would be otherwise. Even with the caps we have Benchmarking 2.0 with the bus drivers!!
What on earth are you talking about?
We are already one of the highest wage economies in the world.
World economic forum ranks us at 13th for labour market efficiency.
While it's improving since the claw back of some of the massive pay increases during the boom it's still not as good as it was in the late 1990's.
If people want pay increases they need to be more efficient; add more value.
Take the socialist cotton wool out of your ears and the pink tinted glasses off.
I'd love it if everyone was better off but we should not enact policies based on ideology which, in the medium to long term, will hurt the people we are looking to help.
Hasn't the question posed by the thread already been answered ?
IBEC has suggested that pay increases amongst large companies has averaged out at 2 % annually for the years 2014 & 2015 with increases for this year edging towards 3% .
The successful strike action by Luas employees , albeit a private sector company , has set the bar extremely high across the entire transport sector & I do believe that an increase in excess of the rejected Labour Court recommendation of 8.2% will be achieved by the current & putative industrial actions.
The ESB Unions have concluded a front loaded increase of 5.5% over 2 1/2 years with a lump sum of €2,750.
The FSU ( formerly IBOA ) has negotiated pay increases across the Banking Sector , 4.8 % in BOI over 2 years , 2.2 % over 1 year in AIB & between 1.75 % & 8% in Ulster Bank over 1 year plus a €600 bonus.
The " yellow pack " system across the nursing , consultants & teaching sectors is soon to be a thing of the past & I'm sure the Unions will ensure that this continues across the entirety of the Public Sector & of course the gradual restoration of pay cuts is currently progressing
It appears also that the MNC's are being forced to offer substantially increased salaries to attract qualified staff in order to offset the cost of renting/purchasing houses , taxation issues etc.
The minimum wage seems set to increase , albeit marginally.
So , my conclusion is that yes it is time for wage increases , a view seemingly shared by Private & Public sector employers , employees and Unions.
IBEC has suggested that pay increases amongst large companies has averaged out at 2 % annually for the years 2014 & 2015 with increases for this year edging towards 3% .
The successful strike action by Luas employees , albeit a private sector company , has set the bar extremely high across the entire transport sector & I do believe that an increase in excess of the rejected Labour Court recommendation of 8.2% will be achieved by the current & putative industrial actions.
The ESB Unions have concluded a front loaded increase of 5.5% over 2 1/2 years with a lump sum of €2,750.
The FSU ( formerly IBOA ) has negotiated pay increases across the Banking Sector , 4.8 % in BOI over 2 years , 2.2 % over 1 year in AIB & between 1.75 % & 8% in Ulster Bank over 1 year plus a €600 bonus.
The " yellow pack " system across the nursing , consultants & teaching sectors is soon to be a thing of the past & I'm sure the Unions will ensure that this continues across the entirety of the Public Sector & of course the gradual restoration of pay cuts is currently progressing
It appears also that the MNC's are being forced to offer substantially increased salaries to attract qualified staff in order to offset the cost of renting/purchasing houses , taxation issues etc.
The minimum wage seems set to increase , albeit marginally.
So , my conclusion is that yes it is time for wage increases , a view seemingly shared by Private & Public sector employers , employees and Unions.
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The question is "Is it time for wage increases" not are wage increases happening.
The OP suggested that wage increases would be good for the economy and so we should have them. A reasonable question.
That's different from Unions coercing pay rises by putting a gun to the head of the people of Ireland.
We've had quite enough of that from the various vested interest groups over the last couple of decades.
Hi Deise,
Wages are increasing in a lot of sectors and I will certainly be increasing my own rates soon. However, the question posed was "Is it time for wage increases" and I think this needs to be on a case by case basis. Any company losing money shouldn't even dream about raising wages for it's staff and ditto for public sector wages & pensions when we as a country are still borrowing to pay for day to day consumption.
Firefly.
We are not.
The public deficit is below the public cap exp.
So borrowing can be said to be purely for cap purposes.
Given productivity levels in Ireland, as a whole, wages are not high.
Here is 2015 labour cost data:
Our labour costs are 10th in the EU.
Employers PRSI is below average.
Note that average wages are fairly similar to Germany's, yet our price level is 20% higher.
So Irish businesses charge 20% more than Germany, on average, yet pay similar wages.
Why?
I suggest the following:
too high property costs, rents are criminally high, some commercial needs need to fall 90%, yes, I repeat 90%
too high energy costs
too high medical / legal / insurance costs
If the price level fell 10%, there would be less need for wage increases.
Employers PRSI is below average.
Note that average wages are fairly similar to Germany's, yet our price level is 20% higher.
So Irish businesses charge 20% more than Germany, on average, yet pay similar wages.
Why?
I suggest the following:
too high property costs, rents are criminally high, some commercial needs need to fall 90%, yes, I repeat 90%
too high energy costs
too high medical / legal / insurance costs
If the price level fell 10%, there would be less need for wage increases.
Firefly , that really doesn't reflect however the reality of the situation for Public Sector employees.
The Government & Unions entered into an Agreement to avoid IR difficulties whereby the pay cuts suffered by employees would be gradually restored and that is currently happening , it also began to dawn on them that it was becoming increasingly difficult to recruit much needed nurses , doctors & consultants on the reduced wages for new entrants & so pragmatically they are scrapping this two tiered system , the same is now going to apply across the teaching system - the ASTI remain outside the tent currently & the rest of the Public Sector will surely follow suit.
It does appear that the majority of private sector companies who are in a position to do so are increasing salaries , a statement backed up by IBEC research.
Given the above & the expected increase in the minimum wage it does appear that both private & public sectors ( this sector for more pragmatic reasons ) have concluded that it is time for wage increases.
The Government & Unions entered into an Agreement to avoid IR difficulties whereby the pay cuts suffered by employees would be gradually restored and that is currently happening , it also began to dawn on them that it was becoming increasingly difficult to recruit much needed nurses , doctors & consultants on the reduced wages for new entrants & so pragmatically they are scrapping this two tiered system , the same is now going to apply across the teaching system - the ASTI remain outside the tent currently & the rest of the Public Sector will surely follow suit.
It does appear that the majority of private sector companies who are in a position to do so are increasing salaries , a statement backed up by IBEC research.
Given the above & the expected increase in the minimum wage it does appear that both private & public sectors ( this sector for more pragmatic reasons ) have concluded that it is time for wage increases.
One of the major reasons we find it hard to employ highly skilled people is because income taxes are so high.
Someone on €100k per year pays €12k more in income taxes than the same person in the UK. That's right folks, the person in the UK on the same salary takes home €230 a week more. That means the same person has to earn far more to take home the same wage in Ireland. So; same skills, same job, same productivity and same take home pay = much lower productivity per € paid because the state takes a larger slice of the gross income and so gross incomes have to be higher.
Someone on €100k per year pays €12k more in income taxes than the same person in the UK. That's right folks, the person in the UK on the same salary takes home €230 a week more. That means the same person has to earn far more to take home the same wage in Ireland. So; same skills, same job, same productivity and same take home pay = much lower productivity per € paid because the state takes a larger slice of the gross income and so gross incomes have to be higher.
TheBigShort
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Thats true, I never said that. But that was my intention when talking about levels of debt. My fault for not making that clear.
TheBigShort
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That is to miss the point. Fine if we impose those restrictions on our economic policy, but it isnt worth the effort if the ECB hits the printing presses and starts injecting new debt into selected areas of the economy that have no productive value.
The point of the fiscal deficit limits is to ensure governments dont lose the run of themselves in managing the economy. Which sounds sensible, but instead, we allow the ECB to do 'whatever it takes' (Draghi) to inject stimulus into the economy. The ECBs answer is an asset, or more appropriately a liability, purchasing program that is only creating stock market, bond market, property market bubbles that have no intrinsic value and that only a small percentage of people benefit from.
On the other hand, the millions upon millions of ordinary working citizens across Europe are going to have to live with the consequences of this lunacy.
My view, would be to begin programs of capital infrastructure, creating real jobs, real income. This will return increases in wages to millions of Europeans and in turn, create an inflationary effect, which is the stated aim of the ECB.
Do you agree?
TheBigShort
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This is where you get it all muddled up. On the one hand you state that we are one of the highest wage economies in the world and you point that we are 13th most competitive country (and improving) in the world. Yet you disagree with wages rising, you claim that to be a bad thing, even though, with one of the highest wage economies we are improving on competitiveness!
On the otherhand, in another thread, you identify high income earners (your friend in US) as the type of person we need to attract into the economy. So you would like a high wage economy, but on the otherhand, you think increasing wages are a bad thing.
So the only thing I can conclude is that you think it is desirable to pay top dollar for highly productive expertise (i have no issue there), but that the millions who work through manufacturing, production, distribution, servicing, etc this expertise into anything worthwhile, should keep their heads down and just be grateful to have a job and stop making sounds about pay increases - sounds like China to me.
China is losing jobs to lower cost economies such as Vietnam. I would think those on this thread who favour not raising wages take this stance to avoid the same happening in Ireland.
I have no problem with pay increases which are market led. If a business can’t get the people they need at the wages they are offering then they will have to offer more.
If a business has more than enough applicants for the jobs they are offering at the wages they are currently paying then there should be no pay increases.
By the way, I’m a tradesman working in a manufacturing company. I spent years working on machines getting my hands dirty. I’m the sort of person Billy Bragg sings about. I, like the people I work with, have no time for Unions or socialism and see no reason for anything other than market forces to determine wages.
We fell down the competitiveness rankings as our pay increased faster than our productivity. We have gone back up to a large extent due to the fact that we have not had pay increases of any substantial value over the last few years. If we did as Dieseblue suggests and just give pay increases to everyone then we’d just lose more jobs. No offense intended; I am not comparing the two of you.
[broken link removed] is a good graph on just how crazy it got, driven by massive pay increases in construction and the public sector. Neither of these sectors create net wealth, i.e. bring money into the country, but increasing wages in those sectors creates wage pressures in the internationally traded goods and services sector. That in turns costs jobs in those areas and reduces our national wealth.
I do find your points about quantitative easing interesting though.
I agree with that - I'm not sold on printing money (or whatever they call it) as it hurts savers and rewards borrowers.
I do agree. Bonds and interest rates are very low so now would be a good time, except for the fact that we currently owe 180bn and not only that, we are continuing to borrow to consume. If and when we see our national debt falling due to being able to run a current account surplus and start paying down our national debt, then I would be all for what you have outlined.
As bad as QE is it's not adding to our national debt!