ICTU: Industrial Earnings Fall For First Time Since 1980s

national | worker & community struggles and protests | news report

Monday April 10, 2006 20:54

by D_D

Congress highlights ‘falling wages in a booming economy’ (ICTU press release)

New figures show that real industrial earnings fell last year, for the first time since the high unemployment era of the 1980s. Figures released by the Central Statistics’ Office (CSO) reveal that hourly earnings only rose by 2.1 percent in 2005, while inflation rose to 2.5 percent (it is now 3.3 percent). Under the terms of Sustaining Progress, earnings should have risen by 4 percent in 2005.

Thus the rise was just half of what was negotiated for workers by Congress, according to Paul Sweeney, Economic Advisor.Mr Sweeney described the fall as a matter of “grave concern to Congress and one which provides further evidence of the downward pressure on pay rates caused by high immigration, exploitation and poor regulation of the labour market.”The 2005 fall is the first since the days of high unemployment during the 1980s. In the current buoyant economy with net job creation of some 90,000 new jobs there should be upward pressure on wages.

Instead, the opposite is occurring. Male industrial workers saw an increase of only 1.6 percent in 2005, compared to the 4 percent negotiated under Sustaining Progress, while female industrial workers matched the agreement.Congress, said Mr Sweeney, is seriously concerned at the impact of immigration in Ireland’s poorly protected labour market and by the rise in exploitation. Migrant workers now comprise some 8 percent of the Irish workforce, a figure that is comparable with Germany. However, it took 30 years to reach this level in Germany, while in it has taken just three to four years in Ireland. The figure for 2001 was just 3 percent.

It has been repeatedly asserted that there is no evidence of displacement of Irish workers by non-nationals. That is untrue, said Mr Sweeney. “There was a decline in manufacturing of 19,400 Irish nationals against an increase of 8,500 non-nationals (with an overall decline of 10,900) in the year to Q3 of 2005. There was a similar trend of displacement in the hotel and restaurant sector. Daily, trade unions are highlighting cases of exploitation of migrant workers and these are probably only the tip of the iceberg.“In general terms, immigration is good for a country, as it increases Gross National Product over time and brings many other benefits,” Mr Sweeney said. “But when labour markets are poorly regulated and enforcement of proper conditions is almost absent, it will lead to a drop in incomes for indigenous workers and a general worsening of conditions for all. “This fall in earnings has been highlighted in other countries.

The ESRI recently estimated that skilled immigration will push down wages by ‘6 per cent in the long run.’ At the other end of the scale, unskilled workers in the US are estimated to have seen their wages drop by 8 percent due to immigration.“Congress welcomes inward migration, but insists that migrant workers should not be exploited by unscrupulous employers determined to drive wage rates down. “Falling wages in a booming economy are not a sign of success,” Mr Sweeney concluded.

10th April 2006 Further Information: Macdara Doyle, Communications Officer ICTU Phone: 01 889 7799 or 087 9174171 Email: macdara.doyle@ictu.ie