Cowen urges pay restraint
Workers were tonight warned against pricing the Irish economy out of international markets by seeking pay rises higher than their competitors.
Minister for Finance Brian Cowen said that Irish pay rates had increased by two and a half times the European Union average in the past three years.
“If we reduce the growth potential of the economy by giving ourselves more wages than our competitors are earning, we put at risk the jobs we have created and the progress that we are making,” he said.
“We need to be sure that we don’t decide on something for the moment which might make people happier in the short term but in fact not be in their long-term interest in terms of cost competitiveness being eroded.”
Mr Cowen referred to pay rates, which in Germany have risen by 1.8%, compared to Ireland where an increase of 13.5% was recorded over the last three years.
“We are in a single-currency area with the euro and therefore if we do erode our competitiveness, the only way we can get back into a competitive position would be to give ourselves, in the future, lower wage rises than the average in the European Union,” he continued.
He told workers to hold on to the benefits they have and be mindful of all the considerations, rather than just look at the pay talks as a chance to increase wage rates.
Mr Cowen added: “We want to keep as many people as possible in work, we want to maintain the personal taxation system that we have, which is benefiting workers now in a way that they have never benefited in the past.”
