Wages and Ireland’s International Competitiveness

Rory O'Farrell

The Economic and Social Review, 2015, vol. 46, issue 3, 429-458

Abstract: At the beginning of the crisis in 2008 it was a widely reported view that Ireland had become uncompetitive, leading to calls for wage cuts. Since then wage rates in the private sector have been largely stable. However, Ireland has shown a strong improvement in exports despite a difficult international trading situation. This presents a puzzle. If wages in Ireland were uncompetitive, how could Ireland improve its export position so rapidly, without a general fall in wages? Ireland can best be described as having moved from a position of “super-competitiveness” to “competitiveness”. During the construction boom, exports remained an important driver of growth. Since 2008, the fall in nominal unit labour costs is entirely due to a move away from the labour intensive construction sector. However, while labour costs have been stagnant in Ireland, they have increased amongst our trading partners.

Keywords: wages; competitiveness; Ireland (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eso:journl:v:46:y:2015:i:3:p:429-458

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