Employers: Expect no pay rises until 2013

IRISH workers struggling to cope with savage cutbacks, pay freezes and rising taxes have been told there is no opportunity of any salary increases until at least 2013.

A survey by the Irish Business and Employers Confederation (IBEC) has claimed any expectations by staff that their loyalty during the downturn will be rewarded in the medium term are “unrealistic”.

According to the high-profile pressure group Irish wage levels “remain significantly out of line” with international markets, meaning companies should “not entertain” any pay rise requests over the next two years.

The group’s pay survey of member firms has found half of the 467 companies involved in the research believe they will not be in a position to increase their salary bill next year.

Of all those surveyed, 62% said they will freeze basic pay levels, while a further 6% are predicting average worker salary cuts of up to 9.5%. None of the respondents said they were planning to increase pay rates in either 2011 or 2012.

And coming at a time when seven out of every 10 IBEC companies have already imposed pay freezes, with 13% reducing salary rates by an average of 11%, the claims by the business pressure group mean more bad news for workers.

“Ireland is under unprecedented international scrutiny. Now more than ever we need to demonstrate that we can take the resolute action required to get our labour costs back into line,” said IBEC director Brendan McGinty.

“Our priority must be to keep companies in business and improve competitiveness; this is the only way to protect jobs.

“An extended period of pay restraint in the economy is required. The lack of jobs is the single biggest issue facing our economy, but only competitive businesses can sustain and create employment,” he added.

The IBEC prediction is supported by the fact that ongoing pay restrictions will help to keep businesses in operation, and therefore help prevent further dole queue rises in a country which has lost 270,000 jobs in the past two years and whose unemployment rate has hit 13.7%.

However, the figures – which are due to be announced later today at the IBEC leadership summit at the Aviva Stadium in Dublin – are set to anger critics who believe it will further damage consumer spending levels in Ireland, potentially deepening the crisis.

In recent days a number of politicians in Britain, including senior Labour party members at the party’s annual conference in Manchester, have noted Ireland is failing to overcome the economic crisis partially because of the deep cuts to the public’s personal income.


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