Irish average wages rise at fastest pace since crisis began

By Padraic Halpin

DUBLIN, Feb 26 (Reuters) - Average earnings in Ireland (Other OTC: IRLD - news) rose by 2.3 percent in the final quarter of 2014, the fastest annual rate of growth since the financial crisis began, in a sign that the improving economy is translating into higher incomes.

Weekly earnings had fallen year-on-year for five successive quarters even as the unemployment rate dropped from a high of 15.1 percent in early 2012, when Ireland was in an EU/IMF bailout, to 10.4 percent at the end of 2014.

After Irish price inflation followed most of the euro zone in turning negative at the of last year, the rise in earnings will provide a strong boost to real incomes as the government seeks to grow the economy by almost four percent this year.

"What we're seeing now chimes with what we've been hearing from business for some time that there are some employers in some sectors in the economy that are in a position to award pay increases," Irish Business and Employers Confederation (IBEC) chief economist Fergal O'Brien said.

"Over half of our members will deliver pay rises in 2015 and on average we'd expect to see around 1 percent pay growth. When added to the reduction in income taxes, little or no cost of living increases, there will be real spending power this year."

Earnings rose by almost 10 percent in finance, real estate and insurance with the information and communications sector the next fastest growing at over 4 percent, the data from the Central Statistics Office showed.

The positive earnings data was released as Ireland's new Low Pay Commission met for the first time on Thursday, tasked with making annual recommendations to the government about the appropriate level of the minimum wage, currently 8.65 euros.

The government has raised the prospect of increasing the minimum wage ahead of elections next year and Prime Minister Enda Kenny said on Thursday that any adjustments would be incremental and that government is looking at ways to mitigate the impact any changes could have on small employers. (Editing by Robin Pomeroy)