Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

Question 113: To ask the Minister for Enterprise, Trade and Employment if his Department has evidence of the lowering of average wage levels within certain sectors of the economy here due to an increase in labour supply from new European accession states; and the measures that are available to the Government to counter such a trend should it develop. [4405/06]

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

It is very difficult to provide evidence regarding the impact on wage levels of the increase in new European accession states' nationals working here. This is because it is not possible to conclusively isolate this impact from that of the various other factors that affect wage levels.

It is true that a significant number of EU-10 nationals have joined our labour force since accession in May 2004. We know that since May 2004 over 160,000 PPS numbers have been issued to them. Based on Revenue Commissioners data, it is estimated that about 70% of these people have employment details and therefore worked here at some stage, although many of them may have returned home in the meantime.

Preliminary indications regarding whether the participation of these EU-10 nationals has had a significant impact on overall wage levels, or on unemployment rates here, are that in overall terms it has not. Unemployment in Ireland remains at very low levels and has averaged 4.3% over the past year, the lowest in the European Union. In the year to the third quarter of 2005, employment grew by 5.1%, in other words, an additional 96,000 jobs were created, of which about 40,000 were taken up by non-nationals. In general, non-national workers appear to be filling jobs in those sectors which are experiencing strong jobs growth.

Most sectors of the economy in which a high proportion of EU-10 nationals are working are also showing fairly robust levels of earnings growth. For example, many EU nationals are working in the construction sector and the latest figures for that sector show fairly strong annual wage growth to the third quarter of 2005 of 6.8%.

I am fully committed to ensuring the employment rights of these workers are effectively enforced on the same basis as their Irish colleagues. As Deputies are aware, this issue is being discussed with the social partners at talks that began last Thursday. I assure Deputy Eamon Ryan that all efforts are being made to ensure that the State's employment legislation covers all employees and exploitation will not be tolerated.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

I take the point that the measures we have protect all workers but concerns exists that while we have certain protections in terms of, for example, the minimum wage, the real concern among trade unions and elsewhere is that this may become a standard wage and that we need more scientific evidence as to what exactly is going on. The figures the Minister gave for the construction industry are interesting and would dispel such concerns, given the percentage increase outlined by him. Does the Minister not agree that the real concern in this issue is a decrease in wage levels, rather than the issue of displacement, given our low unemployment rate and the research done by the Green Party?

The broad analysis of the CSO figures shows the percentage increase in job numbers. Given this has not been matched by a corresponding increase in tax revenue, is this a possible indication that while evidence shows wage levels in the construction industry are not decreasing, it may be occurring in other sectors? How does the Minister propose to be more scientific in analysing this area?

The Minister did not really address in his response what measures we could introduce or avail of if such a trend was to occur. In terms of a putative services directive, it appears the real concern is that we do not have legislative teeth in Ireland to protect wage levels, which does exist in other continental countries and that would be recognised within the framework of a services directive. We do not have the ability to avoid the minimum wage becoming, in a sense, the standard wage here. How can we get more scientific information and what can we do to hold up wage levels? Does the Minister believe we should be doing that?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We have fairly robust legislation, above and beyond the minimum wage, in terms of sectoral wage agreements.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

It is very limited.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

They exist and those areas are being explored in the context of the current talks. I am not saying what is our position on that but we are exploring the whole registered employment agreements, REAs, scenario. They are well developed in the construction sector and have been for quite some time. We have engaged in sectoral agreements. I have also asked FÁS to study the impact of economic migration on the issues of both displacement and earnings. Some preliminary work has been done but the study is still in progress. As soon as we have some data from FÁS, we will send it to the Deputy. I note that Mr. Beggs of AIB is publishing its analysis of the matter at some stage today and I hope to study those figures.

The difficulty is that in some areas of manufacturing, agriculture and construction there may be some indicators of wages not climbing as high as others but that could be due to a number of factors. In manufacturing, for example, it could be due to some indigenous companies not participating in some aspects of it or to people deciding not to go overseas with their companies. I noticed in the past year that we have received more applications for work permits in agriculture than was the case in previous years. The argument being made is that it is increasingly difficult to get young people to seek careers in agriculture, particularly in manual work on farms. There can be a variety of factors leading to change in some sectors of the economy.

As other political representatives have mooted, one could look at whether one wants to stem the tide of migration into the country. I did not anticipate that was what Deputy Eamon Ryan was envisaging and that is why I did not go down that road. In fairness to him, he never has taken that position. That is an obvious instrument if one wanted to restrict the numbers coming in but that could create other pressures within the economy if there was not sufficient supply. Currently our migration policy very much tracks the labour market trends.

In the context of social partnership there is some exploration of the idea of some sectoral agreements, although flexibility is important on the other side of the equation, in terms of the overall cost base of the economy etc.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

The Minister is correct in that my party is not of the view that restricting European Union accession state citizens to the labour market is the way to proceed.

Regarding sectoral agreements some of which he mentioned existed here in a certain capacity, would the Minister agree with my understanding, which is derived from discussions with people who are examining it, particularly the development of the services directive, that under European rules and regulations such agreements here have no teeth and no binding force, and that the concern is that if we go down the route of this continued development in terms of globalisation or of opening our markets, as we do not have such support structures we may well see a widespread lowering of wage rates? Has his Department examined how those sectoral agreements could have real force? When he gets that information from FÁS, would he send it to the representatives of the other parties here so we can have a broad, open and honest debate on the issue?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I certainly will do that. Overall, the evidence is not that there is a wholesale dramatic decline in wage levels.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

He should look at the income tax take from last year.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Yes, but wage levels generally have increased across the economy.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The income tax take, with 90,000 extra people working——

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I just made the point in the context of the construction industry, that they went up approximately 6.8%. Likewise the AIB analysis, published today, states the case remains to be proven or is not proven in terms of the issue.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

It depends on which newspaper one reads.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

That does not mean of course that we do not have to be vigilant about this. We must be vigilant because the Government's position is not to undermine living standards or drive down the earnings of people because we worked too hard to build the economy and to build the living standards and quality of life for all concerned.

There are approximately 300 amendments tabled for the services directive, which is in draft form. It has a long journey to go. I am particularly keen that we ensure our basic laws, in terms of pay, rates and conditions, are protected from anything the services directive has to bring forward.

I listened to the debate in the House on the services directive and despite all the polemic commentary, everyone in the House stated by the way that they believed there should be some liberalisation and believed in the idea of access to markets.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Absolutely.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Much Irish employment is dependent on access to European markets.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

That is not the argument. They are not mutually exclusive.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Only last week I was with a company announcing an extra 50 jobs. It employs 250 already. It is in the services side of the economy and is looking for markets overseas. It is looking to break down barriers and regulations to get into other markets. We cannot have it both ways but our agenda is to achieve liberalisation of the market whilst protecting our basic standards.