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Tag Archives: low wage economies

Here is Tom Lyons, Senior Business Correspondent at the Irish Times, reporting on a new league table on “competitiveness”:
http://www.irishtimes.com/business/economy/ireland-moves-up-to-15th-in-competitiveness-rankings-1.1804264

The headline reads, “Ireland moves up to 15th in competitiveness rankings”

He tells us about his source: “The World Competitiveness Yearbook is compiled annually by Swiss-based business school IMD and measures how countries manage economic and human resources to increase prosperity based on statistical criteria and a survey of 4,300 international executives.”

Here’s the problem. For citizens the debate about competitiveness has been about keeping wages low so that Ireland can compete with low wage economies. Tom’s report, however, tells us that Ireland is ranked at 15th, while China, India and Brazil are ranked 23rd, 44th and 54th respectively.

He also notes that Japan has moved up to 21st place and quotes the W.C. Yearbook: “helped by a weaker currency that has improved its competitiveness abroad”.

Clearly competitiveness is not primarily to do with low wages. Indeed it may have little to do with wages.

It might be argued that it is unreasonable to expect Tom Lyons writing for specialists in the Business and Technology supplement to explore or even mention this but “competitiveness is not primarily to do with wages” is a mere eight words. Moreover, an article could be written in the main newspaper itself advising citizens not to confuse professional measurements of competitiveness with data for use in debates about the minimum wage and other low earnings.

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There are three components to the Irish financial mess. 1. The decline of the export economy. 2. The international banking nonsense. 3. The Irish government policy that created and sustained a property bubble.

In last Saturday’s Irish Times Garrett Fitzgerald argued for a public enquiry into number 1, the true death of the “Celtic Tiger”. He’s right: In the long run this is the most important issue. Employers organisations and both Garret and John Fitzgerald argue that wages at the lower end will have to compete with low wage economies. Essentially what they are saying is that Ireland must WIN a race to the bottom.

Socialists should join Garrett’s call for an enquiry as it would open a debate on different conceptions of or routes to economic development.