Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 95: To ask the Minister for Finance his view of whether wage flexibility is needed which will particularly allow the appropriate degree of wage differentiation across different types of workers and stimulate the hiring of young, female and older workers; and if he will make a statement on the matter. [26902/12]

Michael Noonan (Limerick City, Fine Gael)
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At an aggregate level, my view is that over the medium term wages should move in line with productivity trends. In fact, one of the key problems in the past decade was that wage growth was far in excess of productivity gains. This undermined Ireland's competitive position and resulted in a sharp moderation in export growth from 2000 onwards. Encouragingly, however, some of this competitiveness loss has been reversed and this is standing to us in terms of export growth and larger inflows of FDI.

At a disaggregate level, there must be a degree of wage differentiation in the economy to reflect the heterogeneous nature of employment and the specific demand and supply factors for certain jobs.

But what we cannot have is a situation in which the labour market is distorted through the introduction of an artificial wage gap for individuals performing the same work.