Overpaid? Spin or reality?

NipNip

For the umpteenth time, I have heard a claim during the week about such and such a business closing down - 'they moved to Kentucky/India/Outer Mongolia/China/Poland/Turkmenisthan/<insert random country here> and they only have to pay half the wages'.

Now, while I accept that other countries may pay smaller wages, I am not utterly convinced that this is the sole reason?

I've a suspicion that this is a sort of spin, to put pressure on the government to lower minimum wages or something.
Ireland has huge advantages; low corporate tax, entry to EU market, skilled labour force, stability (in the grand scheme of things), temperate climate, English speaking etc.

Are we really losing all these multinationals as a result of our wages, or is there another reason(s)?

kippy

NipNip wrote: »

For the umpteenth time, I have heard a claim during the week about such and such a business closing down - 'they moved to Kentucky/India/Outer Mongolia/China/Poland/Turkmenisthan/<insert random country here> and they only have to pay half the wages'.

Now, while I accept that other countries may pay smaller wages, I am not utterly convinced that this is the sole reason?

I've a suspicion that this is a sort of spin, to put pressure on the government to lower minimum wages or something.
Ireland has huge advantages; low corporate tax, entry to EU market, skilled labour force, stability (in the grand scheme of things), temperate climate, English speaking etc.

Are we really losing all these multinationals as a result of our wages, or is there another reason(s)?

Its not just wages Id argue but they are a big part of it.
We have high rates,high energy costs, shed loads of red tape etc.
Then theres the general reason of that company having fallen behind themselves hence turning over less money and needing to tighten the margins to appease the shareholders.
I would suspect that the prolifertion of ever more affordable laser eye surgery has had a major impact on B and L for example.

MarkR

They'll mention higher wages, but not the lower taxes.

blindsider

Large companies with office and plants around the world are the usual suspects here.

What usually happens is that a new product is ready for production and Head Office issue an 'internal tender' or similar.

Basically, it asks who can manufacture the product the cheapest, fastest and with best quality.

Local offices come back with their bids and a decision is made in the Head Office. In order to look good, the winner then tries to come in under budget and before the deadline.

The losing plants in the other countries often have to let staff go.

I've heard many senior employees say that their biggest competition is internal - i.e. the plants in Mexico, Singapore, China and Vietnam.

Ireland tends to win on quality and speed, but loses badly on cost.

It's not much fun - but that's the reality.