James Lawless (Kildare North, Fianna Fail)
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782. To ask the Minister for Jobs, Enterprise and Innovation the studies that have been carried out on the increased operating and salary costs to new and existing employers in the Leinster region; the steps she has taken to combat this; and if she will make a statement on the matter. [20467/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The National Competitiveness Council in its annual Costs of Doing Business in Ireland report shows that labour costs account for, on average, over 60 per cent of locally determined enterprise costs. For services companies, the proportion spent on salaries and wages in even higher, depending on the sector. Labour cost growth has remained low in recent quarters. Although labour cost growth has been positive between 2012 and 2015, the rates recorded have been consistently below EU and Euro area averages.

Earnings data is not published on a regional basis for Ireland. However, CSO data shows that, at a national level, average weekly earnings in the year to Q1 2016 increased by 1.1 per cent, reflecting modest increases in both hourly earnings and hours worked.

It is to be expected that as the labour market tightens further, upward pressures will increase. While demands for wage increases are understandable after a period of economic stagnation and wage cuts, our relative competitive position will be negatively affected if wage growth outpaces that in competitor countries.

Therefore, to ensure that wages are sustainable, wage growth should not outpace productivity growth but, at the same time, there must be a relentless focus on protecting real living standards by avoiding, as best as possible, significant increases in the costs of living. To maintain our competitiveness, we must continue to promote a virtuous circle encompassing the costs of living, wage expectations, productivity and cost competitiveness.

It is important to bear in mind that to the greatest extent possible the market should set wage levels in all parts of the country, and for the majority of workers, wages are determined through engagement between employers and employees. Outside of the public sector, the State’s interventions in the labour market are primarily concerned with those on low or average incomes. In this context, the Low Pay Commission is examining the appropriate level of the national minimum wage and related matters. The Commission will be making recommendations in relation to the minimum wage, ensuring that it is fair and sustainable, without creating significant adverse consequences for employment or competitiveness.