Home » Latest Irish News » Emerald Isle’s Workforce Takes a Hit: Wages Drop by 3.9% in 2020, Failing to Keep Up with Inflation

Emerald Isle’s Workforce Takes a Hit: Wages Drop by 3.9% in 2020, Failing to Keep Up with Inflation

"Irish Workers Suffered a €5bn Loss as Wages Lagged Behind Inflation, Says Oxfam Analysis"

Irish workers experienced a 3.9% pay cut in 2019, according to new analysis conducted by Oxfam. The report found that wages in Ireland fell behind inflation by an average of €2,107, meaning that workers effectively worked 8.3 days for free. The total loss for workers amounted to over €5bn. The analysis, which was published by Oxfam to mark International Workers’ Day, revealed that Irish workers fared worse than the global average of 3.19%. Oxfam Ireland CEO Jim Clarken noted that the figures indicated a “very clear and alarming trend towards widening pay scales and resulting inequality across the globe”.

The calculations, which were based on data from Eurostat, the World Bank and the OECD, suggested that wages in some sectors may have risen in Ireland. However, the average increase was not as high as the rate of inflation. Oxfam argued that shareholder dividends reached a record $1.56tn globally in 2019, representing a 10% real-term growth compared to 2018. US corporations paid out $574bn (€518bn) to shareholders, over double the total real wage pay cut experienced by US workers. Meanwhile, Brazilian shareholders received $34bn, just shy of the amount that the country’s workers lost in real wages.

Clarken explained that the report’s findings were particularly concerning given that progress on reducing extreme poverty had halted, with extreme wealth and poverty both increasing simultaneously for the first time in 25 years. He stated that “poverty is once again on the increase”. Oxfam has therefore renewed its call for greater taxation, including windfall taxes on corporate profits. Clarken argued that such taxes could help to redress the balance between executive pay and ordinary workers. He also suggested that “meaningful windfall taxes on excessive corporate profits should be introduced without delay to stop out-of-control inflation and profiteering”.

Oxfam’s report comes as the COVID-19 pandemic has highlighted the precariousness of work and the vulnerability of low-paid and insecure workers. The crisis has also exposed the impact of inequality on access to healthcare and other social services. In Ireland, the government has introduced a range of measures to protect workers, including the Temporary Wage Subsidy Scheme, which aims to support employers in retaining their employees during the crisis. However, concerns remain about the long-term impact of the pandemic on the labour market and on inequality.

The Oxfam report is likely to add to calls for a fairer and more equitable society, with many arguing that the current crisis has exposed the inadequacies of the existing economic system. The report highlights the need for greater taxation on corporate profits and for measures to ensure that workers are not left behind as the economy recovers. As Clarken noted, “most people across the world find themselves working longer for less and struggling to keep up with the cost of living”. The challenge for governments and policymakers will be to ensure that the recovery from the pandemic is a just and equitable one.

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