Sunday 26 October 2014

Central Bank: Stronger jobs market 'could mean pay rises'

Colm Kelpie and Sarah McCabe

Published 30/01/2014 | 02:30

Euro currencies
Euro notes

WAGES could rise this year on the back of healthier employment conditions, the Central Bank has said in a positive outlook on the labour market.

Officials in Dame Street pointed out that take-home pay had fallen in the first nine months of last year compared with the same period in 2012.

Recruitment experts said people were working shorter hours and new recruits were beginning on lower wages than they would have had they started during the boom.

But at the launch of its first quarterly assessment of the economy for 2014, the Central Bank said rising employment and improving labour market conditions should help drive up pay in the private sector this year.

Thousands of workers have endured pay cuts and pay freezes since the recession hit.

But the Central Bank said that the overall decline in private sector wages in the third quarter of last year was only the second such annual fall since the first three months of 2011. Overall, hourly earnings in the private sector have been broadly flat since the economy went into decline in 2008, it said.

By contrast, the Bank said public sector hourly earnings fell during 2010 due to Budget measures and again in the third quarter of last year, reflecting the impact of the Haddington Road deal.

The latest quarterly bulletin looked at trends during 2013 and outlined the decline in hours and wages. "Despite the strong growth in employment recorded during the course of 2013, there is little evidence of any significant upward pay pressures in the economy," it said.

"On the contrary, reductions in hourly pay, which were rare even when employment losses were greatest during 2010 and 2011, have recently become a feature of the data."

Average weekly earnings totalled €675.53 between July and September last year, according to the latest data from the Central Statistics Office. This was down 2.4pc from a year earlier.

TIGHTER

On top of this reduction, the data also showed that the number of hours being worked per week had fallen fractionally.

Lisa Holt of recruitment group CPL said employers looking for staff could be on a tighter budget and were looking for people with less experience, and who therefore cost less.

She also said there was a huge push towards shorter working weeks.

Ms Holt said: "The facts that are at play at the moment are that people are being paid a little less than they were in the heyday. People are much more cognisant now of the fact that they need to get in and prove themselves, and when they prove themselves, then they can put their hand out."

Unions are expected to look for pay rises across the private sector this year and are devising a strategy to increase the wages of lower-paid workers in particular, which they see as the key to growing the economy.

Irish Independent

Read More

Editor's Choice

Also in Irish News