Low paid should not mean low visibility in job plans

ONE of the biggest economic issues facing Ireland is the future of lower paid jobs. Ministers and trade unionists are fond of talking about a high wage/high skill economy as a national goal, which is clearly a laudable objective.

But this argument leaves unanswered the question of what will happen to the thousands of people in lower wage/lower skilled jobs, many of whom are now under threat due to intense competition from low cost producers.

It is an issue which finds its way into all the big economic debates about taxation, Government spending, industrial policy or Economic and Monetary Union. And the danger is that, with key decisions to be made in all these areas, the future of lower wage jobs will be ignored in favour of some far off vision of a high wage/high tech future.

Unfortunately, there are more Packard Electrics waiting to happen. In sectors such as consumer products, clothing and textiles and engineering, many companies are facing ever tougher competition from low cost producers. Even in the fast growth electronics sector, many producers are struggling, as shown by the problems of computer component manufacturers such as Key Tronic in Dundalk.

The debate which follows the loss of jobs in such companies is all too familiar. On one side, the Progressive Democrats lead the tax cutting brigade, arguing that high taxes on low paid jobs are the problem. The other side argues that we really cannot hope to compete with low cost producers and should instead be concentrating on developing higher technology companies.

It is an argument which finds echoes across Europe, where unemployment remains stubbornly high.

The usual contrast is the US, which has a less regulated labour market and much faster employment growth. Critics point, however, to the large number of lower wage "McJobs" in the services sector and a less developed social safety net for those with no work.

For Ireland the dilemma is particularly acute. This is because, on our doorstep, Britain is setting itself up as "the Hong Kong of Europe" with relatively low labour costs and an opt out from the Maastricht social chapter and the single currency. These days a lower cost competitor is as likely to come from the north of England as from the east of Europe.

The policy dilemmas are clear but are seldom addressed directly.

Put bluntly, further restructuring of industry is inevitable. Through a failure of management or the emergence of lower cost competitors, some companies will go to the wall.

This is nothing new, of course, although the pressure from lower cost producers is becoming ever more intense for a range of industries. But it does mean we need to concentrate entirely on developing new hi tech industries.

In between the higher wage jobs in fast growing sectors and the ones in companies which are heading for oblivion are thousands employed in companies whose future will depend on both the skills of management and the environment in which they operate.

Lower taxes on employment may not save the Packards of this world, but they could help to make a difference for others. So could government policy in a whole host of other areas - from the provision of services such as power and telecommunications to social insurance to the encouragement of competition and the training of workers.

Potentially the biggest decision of all will be that made about our participation in Economic and Monetary Union. Thousand of jobs in Irish owned industry in sector such as food, consumer products and clothing - many relatively lower paid - are affected by the movements of sterling. These jobs cannot simply be ignored when the Government is considering its options on EMU.