The Republic is one of the few countries where the gap between higher and lower paid workers is not widening, the Organisation for Economic Co-operation and Development (OECD) says.
In a report on jobs policies, the body says globalisation is good, but people are earning less of the wealth generated by economic growth and integration as the decades go by. The study warns that it is time for a reality check on globalisation's darker side.
The report says the divide between high-earners and those at the bottom end of the scale has widened, and feelings of job insecurity are more acute, which partly explains low wage growth.
Out of the 20 OECD countries for which data exists, the Republic and Spain are the only two countries where wage inequality was found not to be rising.
The Republic is also identified as having the highest rate of growth in "multi-factor productivity" in the report, with labour productivity growing by more than 4 per cent per annum.
The report says that more parental leave seems to increase productivity because it allows people with family responsibilities to stay in the workforce.
"Millions are benefiting from globalisation but at the same time there's a feeling something's wrong with the process," OECD Secretary General Angel Gurria told reporters yesterday.
Governments must address public concern over jobs and pay in a world being transformed at unprecedented speed by technology, cheap transport and communications, and the rise of countries with vast pools of cheap labour.
"It's still a win-win process for all countries," said Raymond Torres, the report's main author. "But just because markets are good for growth, not wanting to see these vulnerabilities would be counter-productive."
The share of wages in national income fell in most OECD countries in the past few decades, says the report from the Paris-based organisation, whose 30 members are mostly wealthy, industrialised economies.
Japanese wages fell by about 25 per cent as a share of GDP in the past 30 years, while they dropped by about 13 per cent in the 15 wealthier EU member countries, and by 7 per cent in the US, the OECD report shows.
Offshoring, where companies reallocate various parts of the production process or services to cheaper places, was not as big a job-killer in OECD countries as believed, but the impression was enough to fuel insecurity, Torres and Gurria said.
The pool of cheap labour has surged since China opened its doors to the world and workers compete on an increasingly global basis because cheaper technology, transport and telecoms make it easier for firms to organise internationally.
China, India, Brazil and Russia account for 45 per cent of the world labour supply today, compared with 19 per cent for the whole OECD, which spans the US, Japan and much of Europe.
The OECD urged governments to resist protectionist responses and adapt employment policies to help people change job with greater ease and sense of security. (Reuters, additional reporting by Laura Slattery)
