Saturday 22 July 2017

Brendan Keenan: Restoring competitiveness means reducing costs too

Despite extensive research, no one can be certain of what maximises employment in an economy

GOVERNMENT ministers, on €3,000 a week, are beginning to tangle with €300-a-week low-paid workers, so guess who holds the high moral ground?

It did not help that Richard Bruton's proposals to amend the legally binding pay arrangements in some sectors, and the OECD suggestion that unemployment benefit should reduce over time, coincided with revelations that our diplomats get up to 10 weeks off to compensate for the hardships of serving in places like Singapore and Warsaw.

This tale of exhausted envoys, though, is more than just setting a bad example while sacrifices are demanded elsewhere. It looks like a clear case of "bargaining creep", which is an inevitable problem in the permanent public sector, and almost inevitable in regulated agreements such as those in hairdressing, hospitality and part of the building industry.

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