Rate of Irish wage increases among the slowest in the Eurozone
Published 25/09/2015 | 02:30
Wages in Ireland are increasing at one of the slowest rates in the Eurozone, according to new statistics.
New figures from European statistical agency Eurostat show that hourly labour costs rose by 1.6pc in the euro area in the second quarter of the year, compared with the same quarter of 2014.
Ireland saw one of the smallest increases in hourly labour costs among any Eurozone countries with an increase of just 0.9pc, almost half of the Eurozone average.
This increase is just a fraction of what was seen in the countries at the top end of the table. Latvia, Romania and Bulgaria saw significant increases in hourly labour costs of 7.9pc, 7.7pc and 6.8pc.
Conversely, the only three countries that saw a decline in labour costs were Greece, Cyprus and Italy.
Crisis-hit Greece saw by far the largest decline, of just under 3pc, while labour costs fell by 1.2pc and 0.4pc in Cyprus and Italy respectively.
The two main components of labour costs are wages and salaries and non-wage costs.
In the euro area, wages and salaries per hour worked grew by 1.9pc and the non-wage component by 0.4pc, in the second quarter of 2015 compared with the same quarter of the previous year.
Wages in Ireland rose by 0.9pc, again well behind countries such as Latvia and Romania and was almost three times less than the rate of growth seen in the UK, which saw wages increase by 2.6pc in the period.
Preliminary estimates from the Central Statistics Office released last month show that average weekly earnings were €697.52 in the second quarter of the year.
This was a rise of 1.8pc from €684.97 a year earlier. Revised weekly earnings were €699.45 in the first quarter of 2015 and showed an increase of 1pc over the same period in 2014.
It found that average hourly earnings were €21.85 in the second quarter compared with €21.53 in the same period in 2014, representing an increase of 1.5pc over the year.
Wage increases have become a key issue for workers since the start of the year in the wake of the economic upswing. This year was declared to be the "year of the pay rise" by business Minister Ged Nash, who also established a Low Pay Commission which in July recommended an increase in the minimum wage from €8.65 to €9.15 per hour.
If accepted the pay rise could see the lowest paid workers get a €1,014 rise over a year. An increase now looks likely to come into force in January, subject to discussions as part of the October Budget. The minimum wage was last increased in 2011.
However, several organisations, such as the Irish business and employers group Ibec, have come out strongly against the proposed increase. Ibec claims the wage increase will would put pressure on businesses that are already struggling.It expects the unemployment rate to fall below 9pc this year and said "a premature increase" in the minimum wage would "affect those low-skilled workers who are still seeking to return to employment".
An OECD report released in May found that Ireland has the fourth highest net minimum wage in the world, only behind Australia, Luxembourg and Belgium when employee social contributions and income tax are taken into account.