Pay Rises Before 2013 'Unrealistic' – IBEC

An influential Irish employers group has said any expectation of a pay rise by employees is "unrealistic".

The employers' body IBEC made the claim after publishing the results of its survey showing the majority of companies could still not afford pay increases over the next two years.

The survey claimed that the total pay bill of 467 companies surveyed had fallen by just under 3% this year and that around seven out of ten firms had imposed pay freezes.

However, the survey also found that around 13% went further, cutting basic pay rates by an average of 11%. 6% expect to cut basic pay further by on average 9.5%.

Jack O'Connor, President of SIPTU and the Irish Congress of Trade Unions has challenged IBEC's assertion, saying "a blanket pay freeze is not the right way to go".

Mr O'Connor said a much more subtle approach was required as exports are booming despite domestic consumption, which accounts for 60 per cent of the economy, still in decline.

"Persuading people to spend again is the key to jobs. A pay freeze across the economy would serve only to further depress consumption, especially at a time when the Government is insisting on continuing with its absurd policy of taking another enormous amount out of the economy in Budget 2011."

"IBEC's call for a pay freeze to 2013 is completely counterproductive because, apart from anything else, it fuels the fear and apprehension which is preventing people from spending," he said.

Mr O'Connor said Ireland was at the top of the league in the EU on labour productivity and that according to the recent CSO Measuring Ireland's Progress Survey we were 33% ahead of the average for Europe.

"In fact we are among the top seven performers, coming in ahead of the UK and Germany. Moreover our position on pay and productivity improves by 22 places in the ranking in the recent World Competitiveness Report."

Mr O'Connor described IBEC's call for a blanket pay freeze as "both opportunistic and irresponsible. He called on the employers organisation to adopt "a more subtle and progressive approach to pay bargaining".

(DW)