A Coordinated Societal Response to Avoid Competitiveness Loss from a Wage-Price Spiral
Yesterday, Ibec attended the latest Labour Employer Economic Forum (LEEF) plenary group meeting, chaired by the Taoiseach, Micheál Martin along with Tánaiste Leo Varadkar, Minister Paschal Donohoe, Minister Eamon Ryan and Minister Michael McGrath and the leaders of the Congress of Trade Unions.
For several weeks, Ibec has been engaging with political stakeholders and been in national media outlining the importance for Government to address the inflationary pressures facing the economy in a coordinated manner. As such, the platform afforded by LEEF has never been more important. Through LEEF, business and its stakeholders can be at the core in steering the national agenda on labour market issues emerging from the most pressing inflationary pressures the economy has faced in decades.
At LEEF, Ibec reiterated that it will continue to work closely with Government and other key stakeholders to help achieve coordination of tax, social welfare and other social wage policies that can address inflationary pressures. This will have cost implications for the economy but if done effectively and in a coordinated manner, the approach can avoid growing wage-price spiral risks.
We outlined that business does not currently see rationale for a return to a ‘one-size-fits-all’ approach of centralised wage bargaining but rather a model that can be best described as coordinated social wage bargaining. The work of the Commission on Taxation and Welfare will also be instrumental in achieving this much needed coordination.
Businesses are facing a plethora of increased costs in the coming months and years as a result of additional statutory leave, sick pay, remote working, universal pensions and living wage proposals. Enacting policies that protect our competitiveness will be the key to weathering the exceptionally volatile economic environment that we are currently facing.
The LEEF plenary group meeting will reconvene in the coming weeks. I will keep you updated on these developments.
Wishing you a very Happy Easter from all at Ibec and I hope you enjoy the long weekend.