Taoiseach Bertie Ahern has said he is not in favour of a 'race to the bottom' in terms of labour costs.
But in an address to the IMI annual conference in Killarney, he said that maintaining labour cost competitiveness today was as important to keeping jobs as it was to creating them in the first place.
He was speaking about the upcoming negotiations on the second phase of the national wage agreement Sustaining Progress.
Mr Ahern said the Government believed in the social partnership process, but warned that 'if we price ourselves out of the marketplace, we will lose jobs'. He said there could be no doubt or argument about this.
The Taoiseach said that far from maintaining labour cost competitiveness, we were losing it. He quoted recent ESRI figures showing that measurements of Irish productivity were distorted by the contribution of a limited number of high-value activities.
He said this was not to argue in favour of a 'race to the bottom' in terms of labour costs. Mr Ahern said competitiveness and social cohesion went hand in hand and it was essential to get the balance right. 'But if our labour costs continue to accelerate significantly ahead of our competitors, we risk losing the race to the top in the long run', the Taoiseach said.
A spokesperson for SIPTU has said that the union is studying very closely the comments made by the taoiseach at the IMI conference this morning. The union is also looking for clarification of issues in the current pay agreement being sought through congress.
