Sir, – John O’Hagan is correct in pointing to employment as a crucial challenge for the Irish economy, now and in the past (Opinion, August 31st). As he points out, competitiveness is at the core of the issue. But tinkering in the labour market by way of Government schemes and work programmes will do next to nothing. It is the smoke and mirrors game of politics.
If Ireland wants competitiveness, it must do everything in its power to control the domestic cost base, a large part of which is tied up in property. Rents and house prices must come down further in order that the necessary wage reductions be as painless as possible for the working population.
The good news is the market is pushing in this direction already. The bad news is every economic policy Ireland has pursued, before and after the crisis, has been aimed at propping up artificially high rents and land prices. Talk of mortgage debt forgiveness is just the latest example of bad economics which will hurt competitiveness and employment growth. – Yours, etc,
