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Dáil
‹ Ceisteanna—Questions. Oral Answers. - Wage Drift.

Wage drift estimates and carry-over

Summary

The Minister estimated wage drift might account for 3–4 percentage points of an overall earnings increase of 16% or more, while noting the figures were tentative. He said the previous agreement’s carry-over was perhaps 5–6 points and described carry-over, the new agreement and wage drift as components of annual earnings growth.

Jim Mitchell Mr. Mitchell Fine Gael

asked the Minister for Economic Planning and Development the estimated percentage wage drift over and above the first phase of the current national wage agreement; if he will outline the Government's attitude to wage drift; and if he will make a statement on the matter.

Comment on this
Martin O'Donoghue Professor O'Donoghue Fianna Fáil

It is not possible to give a precise figure for wage drift as official earnings data are not available for the period since the national agreement came into force. Besides, full details of the various individual wage settlements which have been negotiated above the first-phase increase of the agreement are not available. The indications are, however, that the overall increase in average earnings this year could be 16 per cent or more, and that wage drift could make up as much as 3 to 4 per cent of this increase. These estimates are, of course, still very tentative.

The estimated increase in earnings arising from wage drift is unacceptably high, having regard in particular to the substantial standard increases provided for in the 1978 national agreement.

Comment on this
Jim Mitchell Mr. Mitchell Fine Gael

Could the Minister say how much of the estimated 16 per cent is as a result of the carry over effect of the 1977 agreement?

Comment on this
Martin O'Donoghue Professor O'Donoghue Fianna Fáil

I have not that figure with me, but a substantial proportion of it, perhaps 5 to 6 per cent.

Comment on this
Jim Mitchell Mr. Mitchell Fine Gael

In that case we are talking about a 10 per cent average increase from the current national agreement?

Comment on this
Martin O'Donoghue Professor O'Donoghue Fianna Fáil

If we are talking about average earnings, yes. In any one year the actual increase in earnings is typically made up of these three components, the carry-over from the previous year's agreement, the contribution from the new agreement in that year plus this third element of wage drift, which is not a new phenomenon. What is new is the extent of it.

Comment on this
Jim Mitchell Mr. Mitchell Fine Gael

Could the Minister estimate at this stage the effect of the carry-over of the first phase of this agreement into next year?

Comment on this
Martin O'Donoghue Professor O'Donoghue Fianna Fáil

I have an estimate somewhere but it does not relate to this question. I would suggest that the Deputy either table a separate question or that I may come to it later on as there are some questions which touch on that.

Comment on this