Why the Irish need to pay themselves less

realitykeeper

From an economic perspective, work is a commodity. Every economy has access to this resource but it varies in terms of cost and quality. Unskilled labour is available in in every country so the cost of employing an unskilled worker is a good way of comparing the cost of this particular commodity in any given country.

In Ireland for example, unskilled labour is a total rip off whereas you get much better value in Eastern Europe, Russia, and the Far East while in most of Africa it is very cheap. It makes sense for people to sell their labour cheaply because they know by doing so, their employer can invest in machinery to boost productivity thereby increasing payment for some workers and possibly helping a neighbouring factory that is investing in simple expansion by freeing up surplus labour.

From a workers point of view, work costs nothing but time and effort. Even getting to work need not cost anything as people in the third world will attest. One does not need a car or public transport or a bicycle. One can always find work within walking distance provided one is prepared to work for very little.

Working for extremely low pay is an investment in the future. The benefits accumulate in the form of revenue for the government to pay off its debt and invest in infrastructure. The availability of cheap labour enables manufacturing to thrive, so much so that it will be profitable to manufacture low cost goods and to export them to the real and sustainable economies in Asia and Africa. Exporting exclusively to the US and Europe is very shortsighted because when those economies fail (following the QE experiment) Ireland will be without an export market, which will lead to mass redundancies and company closures.

Because Irish politicians are not skilled in leadership, they need to be led. If unskilled workers were to demand the abolition of the minimum wage, that could trigger an all round low cost economy in this country. Skilled workers have just as much to gain by selling their labours for much less than they are presently paid. By doing so, they get to live in a country with a future and where everything costs less.

Irelands high labour costs are contributing to the fiscal deficit and making it impossible to pay down the national debt. The cost of servicing the debt can only reduce if the debt itself is reduced. Extending the debt is not always an option and it is sinful because it places the burden on future generations.

By working for less, the opportunities for both employees and employers increase dramatically. For example, sorting through rubbish by hand to recycle plastics and other materials makes economic sense when labour is cheap. It is also better for the environment, it eliminates the cost of paying the Dutch to incinerate it, it provides raw material which can be used by industry thereby reducing imports etc.

The implications of a high cost work force are the opposite to the benefits of a low cost labour force. It may take a while for the consequences to become apparent but they will become apparent and when they do it will take a long long time to undo the damage but only if a low cost economic model is adopted. Without a low cost/low wage economy, recovery will never happen.

During recessions when manufacturing companies close and redundancies happen, it is worth considering if these closures would be happening if the employees worked for little or nothing. It makes sense to keep a company that is in business operational even if it involves working there for free. Letting the company close is a big mistake. More to the point, that situation would not arise in the first place if Ireland had a low pay economy.

Skommando

What is this current obsession with wanting other people, particularly the lower paid, to be paid even less ?

Do people really think that's for the common good and will lead to a less divided society, and a better economy ?

In contrast to previous generations, most of them will now never afford their own house. Is that really progress and good for the economy and society ?

We need to a more equal, more balanced society, where everyone has a decent standard of living, and not this extreme right or left wing nonsense.

Mr McBoatface

So how are these low paid workers supposed to be able to afford to live in such a high cost society ?

Deal with the cost of living, housing and insurance being just 2 major issues and then the rates of workers pay can be put on the table.

realitykeeper

Skommando wrote: »

What is this current obsession with wanting other people, particularly the lower paid, to be paid even less ?

Irony abounds. Mefeinism and jealousy will be the ruination of Ireland. Everyone should demand lower pay because Irish politicians have to be led, they need to be shown the way by an enlightened public.

realitykeeper

Mr McBoatface wrote: »

So how are these low paid workers supposed to be able to afford to live in such a high cost society ?

Deal with the cost of living, housing and insurance being just 2 major issues and then the rates of workers pay can be put on the table.

By not affording things, people can force prices down. With no buyers, prices must fall.

Mr McBoatface

"Skommando wrote:

In contrast to previous generations, most of them will now never afford their own house. Is that really progress and good for the economy and society

Just to add to this, I grew up in a council estate in Dublin, most of my neighbours and friends parents worked low paid part time jobs, their jobs however contributed greatly to society. They could afford to live comfortably on low wages because they where council tenants.

For today's generation this just couldn't happen, many are trapped in the rent allowance poverty trap. The alternative HAP and RAS aren't fit for purpose

beauf

realitykeeper wrote: »

By not affording things, people can force prices down. With no buyers, prices must fall.

Or emigrate....

Harvey Normal

realitykeeper wrote: »

Irony abounds. Mefeinism and jealousy will be the ruination of Ireland. Everyone should demand lower pay because Irish politicians have to be led, they need to be shown the way by an enlightened public.

Yeh. We'all all take a pay cut to encourage the ruling classes to take a pay cut.

realitykeeper

Mr McBoatface wrote: »

Just to add to this, I grew up in a council estate in Dublin, most of my neighbours and friends parents worked low paid part time jobs, their jobs however contributed greatly to society. They could afford to live comfortably on low wages because they where council tenants.

For today's generation this just couldn't happen, many are trapped in the rent allowance poverty trap. The alternative HAP and RAS aren't fit for purpose

The whole point of accepting low pay is to help future generations and not just yourself. By not considering future generations, and only thinking of ourselves, debt tends to accumulate until it becomes an unmanageable burden.

realitykeeper

Harvey Normal wrote: »

Yeh. We'all all take a pay cut to encourage the ruling classes to take a pay cut.

Correct.

CramCycle

realitykeeper wrote: »

It makes sense for people to sell their labour cheaply because they know by doing so, their employer can invest in machinery to boost productivity thereby increasing payment for some workers and possibly helping a neighbouring factory that is investing in simple expansion by freeing up surplus labour.

I don't think you understand why they work for cheap at all. I can assure you if I set up a business in an area and offered twice the wage of neighbouring factories, no one would be declining a job for the betterment of the local community.

Peregrinus

realitykeeper wrote: »

The whole point of accepting low pay is to help future generations and not just yourself. By not considering future generations, and only thinking of ourselves, debt tends to accumulate until it becomes an unmanageable burden.

Well, how much of your earnings have you been voluntarily sending to th Dept of Finance to be applied to debt reduction? Because if you don't think that's a good idea with respect to your own earnings, why would you expect anyone else to think it's a good idea with respect to theirs?

Harvey Normal

realitykeeper wrote: »

The whole point of accepting low pay is to help future generations and not just yourself. By not considering future generations, and only thinking of ourselves, debt tends to accumulate until it becomes an unmanageable burden.

Future generations won't be able to pay back debt if they are poorer.

Harvey Normal

realitykeeper wrote: »

Correct.

I missed my sarcasm emoji

Mr McBoatface

realitykeeper wrote: »

By not affording things, people can force prices down. With no buyers, prices must fall.

Maybe we should go back to being a self sufficient country where the farmers worked the lands with horses and the labour of the locals, the fisherman and boating crews supplied the fish to feed the nation. No need for foreign luxuries for the masses like decent education or the hope of bettering yourself.

Sure if there's too many of us we can always send some abroad.

alastair

Peregrinus wrote: »

Well, how much of your earnings have you been voluntarily sending to th Dept of Finance to be applied to debt reduction? Because if you don't think that's a good idea with respect to your own earnings, why would you expect anyone else to think it's a good idea with respect to theirs?

The OP doesn't believe in volunteering. Which is ironic, since it's another (and more realistic) route to lowering the cost of living.

draiochtanois

This post has been deleted.

realitykeeper

CramCycle wrote: »

I don't think you understand why they work for cheap at all. I can assure you if I set up a business in an area and offered twice the wage of neighbouring factories, no one would be declining a job for the betterment of the local community.

The smart workers would stay in the low paid job rather that take a job in a factory on the brink of bankruptcy.

Mr McBoatface

realitykeeper wrote: »

The whole point of accepting low pay is to help future generations and not just yourself. By not considering future generations, and only thinking of ourselves, debt tends to accumulate until it becomes an unmanageable burden.

Spoken like a true elitist trying to guilt trip the masses to accepting less while creaming the rewards.

realitykeeper

Mr McBoatface wrote: »

Spoken like a true elitist trying to guilt trip the masses to accepting less while creaming the rewards.

I have often said politicians should be the first to take a massive pay cut but they won`t. That is why I am suggesting the people should lead the politicians.

Peregrinus

realitykeeper wrote: »

I have often said politicians should be the first to take a massive pay cut but they won`t. That is why I am suggesting the people should lead the politicians.

And are you not one of the people?

nhunter100

realitykeeper wrote:

I have often said politicians should be the first to take a massive pay cut but they won`t. That is why I am suggesting the people should lead the politicians.

As this is your suggestion I assume you will lead by example, how much of a voluntary cut have you imposed upon yourself? Maybe provide proof that you have done so.
I often find those are requiring others to accept lower living standards are reluctant to embrace those standards themselves. Maybe you're an exception.

Mr McBoatface

realitykeeper wrote: »

I have often said politicians should be the first to take a massive pay cut but they won`t. That is why I am suggesting the people should lead the politicians.

So what exactly are you as one of those people doing ? Have you offered your services for half your wage to your employer ?

_Brian

So the crux of the argument is that the lowest paid in society should fight so they can be paid less, for a time (decades or a generation) this will cause them and their families extreme hardships, but we ask them to do this so hopefully a low cost economy will magically follow and everyone might benifet from this new low cost economy.

But what would really happen is that big business would just make more profit on the backs of these individuals who's families and subsequent generations would be damned to poverty and subservient living to the rest of society.

Perhaps if your pipe dream had started with those at the top reducing pay to the minimum wage and see where that brings us, but the idea that we make the lowest in society take even further burdens is shocking.

CramCycle

realitykeeper wrote: »

The smart workers would stay in the low paid job rather that take a job in a factory on the brink of bankruptcy.

Trying not to get into the nitty gritty of an example but I am referring to a factory that looks like it has a rocksteady plan. They aim to pay workers better as they feel they are already at peak efficiency for that moment in time and better paid, presumably happier workers, will, be more efficient as a result.

The other factory which is in the same state it just paying low wages because someone on an internet forum said they could convince the workers it was for the good of the people. Claiming the government would make alot more money from it. Rather than the fact that they would have less to spend in the local economy (huge reduction in VAT and similar) and that the only person truly doing better would be the owner.

Now if the original factory owner drove that profit into healthcare, dental, pensions, subsidised food, maybe membership cards for discounts in local shops, maybe you would have something as that forces the money into the local economy.

I do agree with the point on politicians, I get increases in my wage due to an evolving skills and knowledge base. I cannot say the same for my local politicians, and find it hard to see how a pay increase is justified there.

storker

Mr McBoatface wrote: »

So how are these low paid workers supposed to be able to afford to live in such a high cost society ?

Deal with the cost of living, housing and insurance being just 2 major issues and then the rates of workers pay can be put on the table.

But that couldn't work, because then the right people...the important ones...those who must be protected...would, shock, horror, might have to pay themselves less too.

Remember the golden rule, the lower you are down the pay scale, the more important it is for you to be paid less...

storker

realitykeeper wrote: »

The smart workers would stay in the low paid job rather that take a job in a factory on the brink of bankruptcy.

And how are they supposed to know? Businesses generally don't keep their workforce, and certainly not their potential workforce, up to date with the company's financial realities.

screamer

realitykeeper wrote: »

I have often said politicians should be the first to take a massive pay cut but they won`t. That is why I am suggesting the people should lead the politicians.

I think someone needs a reality check. Do you really think the politicians give a flying fiddlers? Sure there are people sleeping rough on the streets but that doesn't encourage the politicians to sell their mansions......
they are bench mark protected elite. Like the rest of the public sector.
To reduce labour costs we have to look at root cause- why is the cost of living so high...... yes wages are part of it but even if people worked for less their employers would just pocket the difference not pass it on to the end consumer. Ever heard of outsourcing........ its happened manufacturers moving to low cost countries but there was no downward movement in their prices.

topmanamillion

realitykeeper wrote: »

Irony abounds. Mefeinism and jealousy will be the ruination of Ireland. Everyone should demand lower pay because Irish politicians have to be led, they need to be shown the way by an enlightened public.

You're not on minimum wage are you?
One of the most mental threads I've read in a long time.

Peregrinus

There certainly is downward movement in the price. Clothing and electrical goods, to name but two things, are much, much cheaper in real terms than they were a generation ago. For electrical goods, this can to some extent be attributed to technological advances, but for clothing it's down to transfer of production to low wage economies, made possible by reduced trade barriers and low transport costs.

So, yes, consumers do benefit. But the OP's fond notion that the producers put their profits into productivity improvement or debt reduction or whatever is a pipe dream.

nhunter100

realitykeeper wrote:

Irelands high labour costs are contributing to the fiscal deficit and making it impossible to pay down the national debt. The cost of servicing the debt can only reduce if the debt itself is reduced. Extending the debt is not always an option and it is sinful because it places the burden on future generations.

realitykeeper wrote:

By working for less, the opportunities for both employees and employers increase dramatically. For example, sorting through rubbish by hand to recycle plastics and other materials makes economic sense when labour is cheap. It is also better for the environment, it eliminates the cost of paying the Dutch to incinerate it, it provides raw material which can be used by industry thereby reducing imports etc.

Isn't it amazing how the collapse in our economy was caused by the greed of a select few with access to politicians of the largest parties but you wish to see those on the bottom of the ladder struggle even further in some neo liberal wet dream.
This thread belongs in AH as it's an insult to anyone with a reasoned intellect, it's nothing more than a p*ss take.

GreenFolder2

People should be paid the highest amount they can get in this market.

This isn't a command economy and everyone tries to maximise their earning potential to get to a work - life balance.

Ireland's doing pretty OK at the moment and we don't need to be going around trying to bottom feed for wages.

Nor is some kind of situation where we all work like little elves in Santa's Sweatshop a particularly good idea. We should be aiming for maximum output with least slog - high productivity.

If you want to look at improving costs here; things like compensation culture and massive insurance overheads, astronomical legal fees that are caused by what amounts to a rigged market; the banking oligopoly; making more use of the single European market for goods and not just buying absolutely everything from UK distributors, improving energy systems, etc etc etc

Driving wages down just drives everyone's quality of life down, damages spending power and destroys the economy.

I would much rather see Ireland continuing to be a place where people can work smart and earn decent money rather than being a place where most people are working hand to mouth which is what happens when you drive down wages.

_Brian

I read through some of OP post there again and TBH it's quite shocking.

It reads like a KKK research paper on why we should reintroduce slavery and how it would help service the national debt and so slavery is actually a form of public service where the slaves should be proud of their contribution to society.

It truly is a disturbing read that the notion is somehow comprehendable that we should further reduce the living standards of the low paid in society and ask them to model their lives on those trapped within third world economic systems.

It's sickening stuff.

Mark Hamill

GreenFolder2 wrote: »

making more use of the single European market for goods and not just buying absolutely everything from UK distributors,

This may not always be by choice. The company I work for (locks and safes industry) always tries to buy our wares direct from the manufacturers themselves, but we have had many manufacturers (even European based manufacturers) direct us to their UK affiliates for purchases, as the UK affiliate has selling rights for UK and Ireland. Hopefully this will die when Brexit is finally fulfilled and the UK fully leaves the EU, but I wouldn't be surprised if it doesn't. Most international companies in our industry don't give a crap about the Irish market.

GreenFolder2

Those rights will have to be torn up after Brexit even if it's by EU directive.

They'll give a crap if they're facing a massive fine for attempting to distort the market.

It might be one area where we should be getting that commissioner on the case. If she can take on Apple for €13 billion she can deal with a few of those exclusive distributor deals that are distorting the market here.

Mark Hamill

realitykeeper wrote: »

Working for extremely low pay is an investment in the future. The benefits accumulate in the form of revenue for the government

How?
If you make a significant proportion of the poorest workers even poorer then they will spend even less (thereby given less to revenue in terms of VAT on purchases) and require more social supports to survive (thereby taking more out of government funds).
Domestic companies will have to lower prices to match the lower disposable income workers will have, thus killing any potentially re-investable profit made from paying them less, whereas International companies will simply take advantage of our low corporation tax rates to pocket the money saved on wages whilst selling their wares for the same costs to the higher earners in foreign markets.
And in order to sell competitively in markets like Africa and Asia against their local producers, we would have to operate even cheaper than their producers do, to combat the cost of transportation our goods to them.

You whole argument seems like really badly thought up justifications for trickle-down economics - the poor should work poorer to let the rich get richer so they can help the poor, because the rich just aren't quite rich enough to help now.

realitykeeper wrote: »

Everyone should demand lower pay because Irish politicians have to be led, they need to be shown the way by an enlightened public.

Why not just use our votes to show them the way?

Letree

realitykeeper wrote: »

Working for extremely low pay is an investment in the future.
.

Are you willing to work for much less? Or let me guess its only other people you want to do it.

nhunter100

Letree wrote:

Are you willing to work for much less? Or let me guess its only other people you want to do it.

This question was posed to the OP by several posters, the fact he has refused to answer is telling.

realitykeeper

The benefits of a low cost economy are self evident when you compare house building in Ireland with that of a third world country:
https://www.youtube.com/watch?v=w-2ckJ81igQ

nhunter100

realitykeeper wrote:

The benefits of a low cost economy are self evident when you compare house building in Ireland with that of a third world country:

So any chance will you enlighten people here, have you taken a cut in your wages you know for the good of future generations or is it just everyone else that should do it?

realitykeeper

nhunter100 wrote: »

As this is your suggestion I assume you will lead by example, how much of a voluntary cut have you imposed upon yourself? Maybe provide proof that you have done so.
I often find those are requiring others to accept lower living standards are reluctant to embrace those standards themselves. Maybe you're an exception.

I am not a martyr but the ICTU could and should lobby its members to in turn lobby their members to take a massive and collective pay cut. Then demand the politicians follow their lead.

_Brian

realitykeeper wrote: »

The benefits of a low cost economy are self evident when you compare house building in Ireland with that of a third world country:
https://www.youtube.com/watch?v=w-2ckJ81igQ

Why the constant need to model ourselves on third world country economics.. I've visited third world countries and I saw nothing there I'd like to see replicated in Ireland.

nhunter100

realitykeeper wrote:

I am not a martyr but the ICTU could and should lobby its members to in turn lobby their members to take a massive and collective pay cut. Then demand the politicians follow their lead.

So you're not prepared to do what you advocate for others to do. Thought so. Fair play though I thought you were serious seems this was a trolling thread.

realitykeeper

nhunter100 wrote: »

So you're not prepared to do what you advocate for others to do. Thought so. Fair play though I thought you were serious seems this was a trolling thread.

I am prepared to take a big pay cut along with everyone else, and then demand the politicians do the same. If it were only me, nothing would change.

nhunter100

realitykeeper wrote:

I am prepared to take a big pay cut along with everyone else, and then demand the politicians do the same. If it were only me, nothing would change.

Off with you, starts with the individual. :-) BTW you might want to revisit your user name comes across as somewhat of an oxymoron. Bye bye.

realitykeeper

GreenFolder2 wrote: »

Ireland's doing pretty OK at the moment and we don't need to be going around trying to bottom feed for wages.

Driving wages down just drives everyone's quality of life down, damages spending power and destroys the economy.

I would much rather see Ireland continuing to be a place where people can work smart and earn decent money rather than being a place where most people are working hand to mouth which is what happens when you drive down wages.

Ireland is not doing ok. It is a third world country, it just doesn`t know it yet. I was laughing at Michael Noonan during his budget speech for saying Ireland will end deficit spending in 2018. That is the year deficit spending will explode following the debasement of the Euro and the next super round of QE.

Using borrowed money to buy foreign goods may help GDP in the short term but it makes matters worse in the longer term.

The Irish do not "work smart". Buying equipment, to boost productivity is fine if it is not financed with money that is both borrowed and in an economy that uses a currency that is setting itself up for a major devaluation. The number one rule of investing is not to get into debt in order to do it. That is gambling and in a high cost economy, the odds are stacked against you.

Stoogie

In effect this is what Britain has done by the huge drop in the value of sterling. The repercussions are already starting of course, there is no marmite in tesco.

nhunter100

Stoogie wrote:

In effect this is what Britain has done by the huge drop in the value of sterling. The repercussions are already starting of course, there is no marmite in tesco.

Not true, Unilever have reached a deal with Tesco's that delicious/disgusting treat is back on the shelves.

Stoogie

nhunter100 wrote: »

Not true, Unilever have reached a deal with Tesco's that delicious/disgusting treat is back on the shelves.

Ok, well that's ok I'll ask my boss for a 25%pay cut on Monday so.

Letree

Unilever are acting the goat they have no reason to be looking for 19% increases of the Irish consumer. They are currently trying to bully super valu. I think i'll stop buying their stuff either way.

chahop

Feck that realitykeeper, I have been hounding my boss for pay rises for the last year to try and get prepped for the Hyperinflation you keep warning about.