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Central Bank call for wage cuts is misguided

5 October, 2012 - by Pearse Doherty TD

Speaking in response to today’s Central Bank quarterly bulletin, Sinn Féin Finance spokesperson, Pearse Doherty TD, said that calls for wage cuts are “misguided” and will “further depress consumer demand, economic growth and job creation”.

Deputy Doherty said:
“The Central Bank is wrong to suggest that further cuts to wages in the public and private sector will assist economic recovery. Their claim that wage cuts will boost competitiveness and in turn assist recovery is misguided. Any such move would further depress consumer demand, economic growth and job creation.

“The domestic economy is still in recession. Consumer spending continues to fall. The only thing that further wage cuts will achieve is to further damage the domestic economy. Such a move would lead to more unemployment and act as yet another obstacle to social and economic recovery.

“It is ironic that the Central Bank made this recommendation on the same day as they revised downwards their growth projections for 2012 from 0.7% to 0.5%. The primary reason for this decline is the policies of austerity being imposed by the Government.

“While clearly there is an argument for reductions for highly paid public sector workers and extra taxes for very high earners, there is simply no justification for across the board wage cuts. This would push more families into financial hardship and poverty and damage the economy.”

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