The pace of wage growth needs to be sustainable and affordable to protect Ireland's competitiveness, according to the Minister for Finance.
Paschal Donohoe was speaking at an ESRI conference today which was looking at the distribution of income growth in Ireland.
Average annual wages grew by 2% last year, compared to 1.3% in 2016.
As the country nears full employment, the minister has not ruled out what he described as, "careful wage growth" into 2019 and beyond.
However, he said, Ireland needs to be careful with this trend.
"Our challenge will be to ensure that these wage developments are commensurate with trends in productivity across the coming period," Minister Donohoe said.
"With regard to this, everyone, every employer - in the Government and in the private sector - has a shared responsibility to ensure that the pace of wage growth is sustainable and affordable, in order to protect our competitiveness," he added.
An ESRI study published today shows that income growth in Ireland is evenly distributed, and income inequality is broadly stable. This is in contrast to the international trend which sees a bigger divide between high and low incomes.
Ireland was at the high end of the inequality spectrum before, but now the country is close to the OECD average.
Professor Tim Callan, author of the study, said the welfare system and the tax system are playing a role in reducing income inequality here.
"Ireland, the US, and the UK are all quite high in what they call market income inequality, before taxes and welfare come into the story.
"But after tax and welfare play their role, Ireland ends up less unequal than those other countries," Professor Callan said.
"I think sometimes people feel that maybe tax and welfare can't do very much, but in fact, they can, and they have," he added.