Mr. Seamus Coffey:

I wish to make a brief point. It follows from the point just made. The emphasis of the graph depicting the labour share in figure 2.8 is not necessarily the historical pattern. It is more to do with the projections from 2016 to 2021, when we anticipate that the labour share will remain flat, perhaps with the additional wage pressures that might be in the economy. We would expect that to rise rather than remain flat.

There is an important point with regard to the labour share in these aggregate statistics for the Irish economy. It is important to make a distinction between the two Irish economies, in other words, the labour share in domestic companies as against the labour share in foreign-owned companies. Ireland's labour share in domestic companies for gross value-added is approximately 80%, the second highest in the European Union. Only French domestic companies allocate a greater share of value added to labour than Irish companies. However, Ireland's labour share for foreign companies is by far the lowest in the EU. Up to 2014, the figure was 25%. After what happened to the data in 2015, I imagine the figure is now far lower than 25%. Let us consider the graph again. There is a significant downward step in 2015. That does not necessarily represent a reduction in wages. It represents a massive step-change in the value of output created primarily in the foreign-owned sector.

The data on labour share in Ireland gives a differing picture of the domestic economy, where it seems reasonable, although I am unsure of the trend. The trend could be down. However, there is a singularly distorted picture because of the foreign-owned sector.