'Nonsense' to link wage cuts with national competitiveness

THE ASSISTANT general secretary of the Irish Congress of Trade Unions (Ictu), Sally Anne Kinahan, has criticised as “utter nonsense”, suggestions by the head of the IDA that wage cuts were required in order to restore Ireland’s competitiveness.

Speaking at the Ictu’s biennial delegate conference in Tralee, she said that “even far-right economists concede that competitiveness is far more complex, complicated and about much more than wage levels”.

On Wednesday the chief executive of IDA Ireland, Barry O’Leary, said the pay of thousands of workers in companies backed by the inward investment agency would have to be cut by up to 15 per cent if their Irish operations were to survive the recession.

“In some cases, salaries will have to come down by up to 15 per cent. If you are 20 per cent more expensive than two sister plants, unless you do something about that, you are going to be in trouble,” Mr O’Leary said.

Ms Kinahan said Mr O’Leary had clearly adopted a simplistic ideological position and not one that was informed by the facts.

“Cutting wages will not get us out of this recession, instead you will simply depress demand and kill consumption, a dangerous step in an economy where domestic demand comprises almost 50 percent of all activity.

“The best way to address competitiveness and end the recession is through serious investment in upskilling and learning, starting at preschool and continuing through all levels and all ages,” Ms Kinahan said.

Meanwhile, the Teachers’ Union of Ireland (TUI) said that “vicious and foolhardy” decisions taken by the Government over the last year had cut the legs from underneath an already creaking education system.

TUI president Don Ryan said the Government had overstepped the threshold of decency “when they used our children as scapegoats” to resolve problems of their own mismanagement.

Peter McLoone, leader of the country’s largest public sector union Impact, said the proposals alleged to be contained in the report of An Bord Snip had nothing to do with reform but were simply about cuts on public services and the people who provided them.

It is time to shift the focus away from bureaucratic diktats from the centre, and start empowering local managers and workers to agree and implement reforms that will work for service users in the hospitals, local authorities, schools, communities and social welfare offices, he said.