Labour costs remain a concern for employers against backdrop of inflationary environment

The theme of the Forum hosted by the Department of Finance together with the Department of Public Expenditure and Reform was Building Economic Resilience to deal with International Challenges.

Mr Gleeson's comments were made against the backdrop of most sectors facing a tight labour market. Surveys conducted by Ibec just before Christmas 2021 showed that most Ibec members were undertaking pay increases in 2022 – with a median increase of just under 3 per cent expected.

Ibec research conducted in recent months meanwhile indicates that the rollout of auto-enrolment, the living wage, statutory sick pay and other leave proposals already announced will add about 2.8 per cent to the total wage bill in the economy in the coming years. In the longer term, the addition of higher PRSI for employers and employees in line with the Commission on Pensions recommendations and rising auto-enrolment rates will increase this to 9 per cent. This is before any new proposals emerging from the Commission on Taxation and Social Welfare. While many of these additions to the so-called social wage have merit on their own terms, it is crucial that the Government intensifies work through the Labour Employer Economic Forum to ensure better co-ordination of tax, social welfare and other social wage policies that can address these inflationary pressures.