Friday 21 July 2017

'No return to boomtime public sector pay rises'

Economist says pay restoration will cost jobs

'Trinity College Professor John FitzGerald said that ultimately jobs could be lost if public sector pay goes back to pre-crisis levels, as taxes would have to be increased'
'Trinity College Professor John FitzGerald said that ultimately jobs could be lost if public sector pay goes back to pre-crisis levels, as taxes would have to be increased'

Anne-Marie Walsh

A senior economist has warned the Government against fully restoring public sector wages to the rates enjoyed before the crash in 2008.

Trinity College Professor John FitzGerald said that ultimately jobs could be lost if public sector pay goes back to pre-crisis levels, as taxes would have to be increased.

At one point, salaries for public sector jobs were 20pc higher than those for private sector workers with the same qualifications and experience.

Mr Fitzgerald said wages were "unsustainable" before the crash.

"We can't go back to a situation where a public servant is paid much more than for the same job in the private sector," said Mr Fitzgerald.

"If you raise public sector pay and taxes, the rest of the economy loses.

"A higher tax level means higher wages elsewhere in the economy, and we would lose jobs," he said.

He said wages in the private sector would be pushed up because employers would be forced to do so to retain staff.

The former research professor at the Economic and Social Research Institute (ESRI) predicted there will be strikes in the public sector by unions with "unrealistic expectations" who are likely "to try it on" after rejecting whatever pay deal is brokered at talks.

His comments come as public sector unions prepare to demand further pay rises at talks on a successor to the Lansdowne Road Agreement.

He added there is scope for a further public sector pay rise on top of increases due under the Lansdowne Road Agreement.

On pensions, he said it was not reasonable to have the public sector much better provided for than the private sector.

Irish Independent

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