Tuesday, 28 July 2009

Brendan Keenan on wages and competitiveness: A late link

Brendan Keenan had an interesting opinion piece in the Sunday Independent, following on from the decision by Shannon-based Element Six to relocate jobs abroad - a decision blamed on high wage costs.

Keenan notes that:

We do know that workers in Element Six (formerly de Beers) earn €12 an hour more than those in South Africa. We also know there's no way to match that. So why doesn't everyone de-camp to South Africa? Actually, why don't they go to neighbouring Zimbabwe, where wages are even lower than in South Africa?

That extreme example answers the question. There is more to competitiveness than wages. There is more to it, even, than costs. Trouble is, it is all very hard to measure. Especially, wouldn't you know, in Ireland.

Read the full story here.

Any comments?

1 comment:

Niall said...

I am surprised at the reaction to the move by Element Six. First of all it is a South African company and there is a natural movement to bring jobs home. The economics also made the decision very clear. Secondly Ireland is not a natural part of this industry. When you think of diamonds, it is South Africa, Belgium, Israel or Russia which comes to mind. There is no cluster of companies in this industry in Ireland. Thirdly, it makes political sense to move back to South Africa and finally this factory came to Ireland in a previous political time. The majority community in South Africa are now large shareholders in the parent company of Element Six.