Wage rises to meet property prices not the answer, Ibec warns

Danny McCoy to tell conference not to forget lessons learned from recession

‘A major and far-reaching new approach is needed to improve the supply and affordability of new housing, but wage hikes are not part of the solution.’  Ibec’s Danny McCoy. Photograph: Eric Luke/The Irish Times

‘A major and far-reaching new approach is needed to improve the supply and affordability of new housing, but wage hikes are not part of the solution.’ Ibec’s Danny McCoy. Photograph: Eric Luke/The Irish Times

 

Increasing wages to make property more affordable would see Ireland forget one of the major lessons learned in the aftermath of the recession, Ibec chief executive Danny McCoy will say at conference on Thursday.

Mr McCoy warned against any return to a bubble economy and spiralling pay claims, saying the answer to Ireland’s housing issues lie elsewhere.

“The suggestion that wages should increase to make property more affordable suggests one of the big lessons of the crisis has been forgotten,” he will tell the Ibec conference in Dublin’s RDS in his keynote speech.

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“A major and far-reaching new approach is needed to improve the supply and affordability of new housing, but wage hikes are not part of the solution. If labour costs spiral and we lose our competitive edge, we will pay for it in jobs.”

Industrial discord, he will say, risks undermining some of the positive economic progress experienced over recent years.

The conference is to be attended by about 300 delegates from the business community and will hear from Alastair Campbell, Financial Times commentator Gideon Rachman and economist David McWilliams.

Mr McCoy will urge a renewed focus on State investment.

“With the population rising and the pressures of recovery being felt on public services and our national infrastructure, now is the time to dramatically ramp up investment spending,” he will say.