Monday 16 September 2019

Workers warned of pay freezes amid economic fallout

 

Workers face emergency pay freezes during the fallout from Brexit. Stock image
Workers face emergency pay freezes during the fallout from Brexit. Stock image

Anne-Marie Walsh

Workers face emergency pay freezes during the fallout from Brexit, a leading industrial relations expert has warned.

Former Ibec negotiator Brendan McGinty says that agreeing to halt wage hikes should be part of union and employment deals in sectors that are most at risk.

He said up to 20,000 jobs across agri-food manufacturing, construction and the wholesale and retail trade are at stake and a hard exit will hit unskilled workers on lower wages hardest.

They would suffer pay cuts of almost 9pc while skilled workers on higher wages would suffer reductions of more than 6pc by 2030.

However, in a softer Brexit with the UK remaining in the European Economic Area, wages would be around 3pc lower for high skilled workers and more than 3pc lower for those with fewer skills.

"The economic fallout from Brexit is negative in all scenarios and will likely see income levels drop and unemployment rise in Ireland," says Mr McGinty, managing partner at Stratis Consulting.

"For those sectors most at risk, the imposition of pay freezes as an emergency measure may have to be considered or allowed for in the framing of agreements, whilst the full implications of market adjustments for business cycles and jobs are working through."

He noted that around 15pc of Irish goods and services exports were destined for the UK.

Mr McGinty also warns that current pay trends are already unsustainable, and that public sector pay should not be leading the private sector.

Pay rises are growing faster than inflation, ranging from 2pc to 2.75pc this year, with a small number of 3pc hikes.

Irish Independent

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