Some good news for a change - on Unit Labour Cost side. You can map data for yourself on OECD page here. But here are some snapshots:
Showing posts with label Irish cost competitiveness. Show all posts
Showing posts with label Irish cost competitiveness. Show all posts
Sunday, January 13, 2013
13/1/2013: Some good 'news' for Irish Unit Labor Costs
Some good news for a change - on Unit Labour Cost side. You can map data for yourself on OECD page here. But here are some snapshots:
Saturday, November 10, 2012
10/11/2012: 'Special' case redux?
Just in case Angela Merkel reads EU Commission research... here's a chart summarizing the 'structural' adjustments to-date courtesy of JMP Research:
- Delivered second largest drop in unit labour costs in the periphery (much of that, as in Greece's case and Spain due to massive spikes in unemployment)
- Produced 4th largest (or second lowest) improvement in current account dynamics and had 3rd highest increase in unemployment.
In other words, as with fiscal adjustments, our 'structural' gains are far from being 'special' or exemplary, but rather represent below average levels of achievement compared to other 'peripheral' economies.
And in case you need more, here's a bit on wages 'moderation' in Ireland:
The chart above shows pretty clearly that while Ireland claims to have achieved tremendous gains in labour costs competitiveness, in reality our gains are only spectacular if we forget the rapid inflation experienced in 2000-2009. Let's run some maths: between 2000 and 2012:
- Greek nominal labour costs relative to EU average fell 0.37%
- Irish rose 7.69%
- Portuguese fell 4.21%
- Spanish rose 6.4%
- Dutch rose 8.9%
- Italian rose 1.97%
- French rose 1% and
- German fell 16.36%
In other words, Ireland's labour costs still are up more than for any other peripheral state and, in fact, are only lower relative to the EU average against the Netherlands. Spot anything 'special' here?
Friday, July 15, 2011
15/07/2011: Irish electricity prices and subsidies
Some interesting data on electricity prices within the EU - the latest is now available from the Eurostat, covering H2 2010. Keep in mind, between 2008 and 2010 we have experienced the largest deflation of overall consumer prices in the Euro area.
In terms of household prices for electricity, 2010 H2 price in Ireland was €0.1875/kWh up on €0.1855/kWh in H2 2009 and down from €0.2033/kWh in H2 2008. Back in H2 2008, Ireland ranked as the 6th most expensive electricity market for households in EU27, plus Norway, Turkey, and Bosnia & Herzegovina (let's call these EU27+3 for brevity hereinafter). The ranking improved to 7th most expensive in H2 2009 and to 9th in H2 2010. Chart below (arranged in order of increasing cost for H2 2010) illustrates.
Small, but progress: over 2 years overall decline was 7.8% in average prices.
Next, the cost of electricity for industrial users: In H2 2010 Irish electricity prices for industrial users averaged €0.1131/kWh down from €0.1419/kWh in H2 2008 and down on €0.1175/kWh in H2 2009. So the decline in the industrial electricity prices over the same period of time was almost 3times larger than for households - 20.3%.
Why? One reason - taxes. Our Government, incapable of creating a level playing field for investment and entrepreneurship has made a conscious choice to shift tax burden from the shoulders of producers/employers onto the shoulders of employees/households. Hence, as with income tax and other taxes, business taxes are kept lower for electricity than for households.
Before taxes are added, Irish household electricity cost was 0.1629 in H2 2010, which was 44.9% above the comparable pre-tax price for industrial users. Now, suppose this premium was justified by higher transmission costs to the households. And do note that Ireland and France are the only two countries that do not report break down of final prices by generation and transmission. For all other countries, network transmission costs account for about 42.15% on average of the total pre-tax price of household electricity in H2 2010. But here comes a tricky thing. After taxes are factored in, final price premium for electricity paid by households over and above industrial users rises to 65.8%.
What's the 20.85% tax wedge on the premium about? Most likely - a subsidy from the households to industrial users, cause, you know, to be competitive we have to charge someone to subsidise someone else... Although the subsidy is a sort of Pyrrhic victory, you see, since even with this transfer, Irish industrial users face the 6th highest electricity tariff in the EU27+3 in H2 2010, same as in H2 2009, but an improvement on the 4th highest in H2 2008.
Let us say thank you to the Social Partners and CER who work this hard protecting our consumers' interests.
In terms of household prices for electricity, 2010 H2 price in Ireland was €0.1875/kWh up on €0.1855/kWh in H2 2009 and down from €0.2033/kWh in H2 2008. Back in H2 2008, Ireland ranked as the 6th most expensive electricity market for households in EU27, plus Norway, Turkey, and Bosnia & Herzegovina (let's call these EU27+3 for brevity hereinafter). The ranking improved to 7th most expensive in H2 2009 and to 9th in H2 2010. Chart below (arranged in order of increasing cost for H2 2010) illustrates.
Small, but progress: over 2 years overall decline was 7.8% in average prices.Next, the cost of electricity for industrial users: In H2 2010 Irish electricity prices for industrial users averaged €0.1131/kWh down from €0.1419/kWh in H2 2008 and down on €0.1175/kWh in H2 2009. So the decline in the industrial electricity prices over the same period of time was almost 3times larger than for households - 20.3%.
Why? One reason - taxes. Our Government, incapable of creating a level playing field for investment and entrepreneurship has made a conscious choice to shift tax burden from the shoulders of producers/employers onto the shoulders of employees/households. Hence, as with income tax and other taxes, business taxes are kept lower for electricity than for households.Before taxes are added, Irish household electricity cost was 0.1629 in H2 2010, which was 44.9% above the comparable pre-tax price for industrial users. Now, suppose this premium was justified by higher transmission costs to the households. And do note that Ireland and France are the only two countries that do not report break down of final prices by generation and transmission. For all other countries, network transmission costs account for about 42.15% on average of the total pre-tax price of household electricity in H2 2010. But here comes a tricky thing. After taxes are factored in, final price premium for electricity paid by households over and above industrial users rises to 65.8%.
What's the 20.85% tax wedge on the premium about? Most likely - a subsidy from the households to industrial users, cause, you know, to be competitive we have to charge someone to subsidise someone else... Although the subsidy is a sort of Pyrrhic victory, you see, since even with this transfer, Irish industrial users face the 6th highest electricity tariff in the EU27+3 in H2 2010, same as in H2 2009, but an improvement on the 4th highest in H2 2008.
Let us say thank you to the Social Partners and CER who work this hard protecting our consumers' interests.
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