Taoiseach comments on wages are out of touch and bizarre

Labour Party Leader Brendan Howlin has said the suggestion by the Taoiseach that wage growth posed a threat to the Irish economy are bizarre and out of touch with reality.

Deputy Howlin said:

“Why it is for Fine Gael that economic growth and profits are ok but that growth in wages is not?

“The reality is that wage growth poses no threat to the Irish economy.  Rather stagnant wages globally are posing not just an economic threat but a political threat too.  Wage growth is an essential tool to ensure that the dividends of economic growth are shared with workers.

“While Ireland is performing better than other countries with earnings are at least going upwards again there is no threat here.  The Taoiseach is raising a red herring while the costs of living in particular housing continues to rapidly rise.

“Wage growth in Ireland over the last year is under 2%.  Since this minority Government took office average weekly earnings have hardly risen at all. 

“Yet all of a sudden a Fine Gael Taoiseach believes wage growth poses a fundamental threat to our economy. It is nonsense.

“I think we are seeing a concentrated campaign to use the last economic recession to talk up threats to the economy with a view to lowering expectations to facilitate the spinning of this Government’s performance.  

“For example, instead of having an environmental reserve fund to meet the challenges of the future we have a rainy day fund.   The recession we recently endured was a once in three generation event not the normal up and down of the economic cycle.

“The result is a Government focussed on avoiding the past and not planning for the future.

“As one economist put it recently there is no evidence of overheating in the Irish economy.

“The facts tell a different story. Inflation is low. The economy continues to grow. The debt ratios, personal and public, remain high but have declined enormously in recent years. The recent national accounts figures will drive those ratios down further.  Employment is growing but labour market participation remains below European averages to there is potential for future growth.

“Our investment spending requirements are driven by the need to play catch up on the recession years.  In the environmental arena in particular failure to invest will cost us money into the near future.  The Government is right to focus on capital spending, wrong to focus on tax cuts for the well-off which have driven competitiveness losses in the past, and must continue to invest in public services.

“Labour knows well the economic cost of the recession and we will support prudent economic planning as we have always done.  But we are determined too that workers and the low paid benefit from the economic recovery we created.”