Not enough migrants are arriving to have a 'wage-dampening effect' say bank officials
Saturday 03 August - The Irish central bank is roughly equivalent to the Bank of England in the United Kingdom or the Federal Reserve in the United States, but less independent insofar as it is subject to the European System of Central Banks, under the broad purview of the European Central Bank (ECB)
Bank officials have insisted that the country is 'is likely to require significant inflows of workers from abroad over the coming years, provided the economy remains on a favourable growth trajectory'.
Reports published by the Bank recall that mass immigration 'was a major feature of the Irish labour market during the period from 2004 to 2007' — before the financial crash — but that while net migration 'increased to 34,000 in 2018, the third consecutive year of strong gains', the inflow now skews towards more highly-skilled migrants, allowing wages to rise.
'As the supply of labour is scarce relative to demand, workers’ bargaining power increases and the price of labour increases,' the report notes, claiming that that 'sustained increases in net inward migration will be needed in the coming years to ensure that growth will be not impeded by labour supply constraints.'
The Central Bank of Ireland believes that 'not enough migrants are arriving to have a "wage-dampening effect", and "if wages are not downwardly flexible” it could become a concern'.
The Bank’s reports do acknowledge that mass immigration does tend to increase 'both rents and prices' and that increased numbers of migrants will create overheating pressure in other areas of the economy, and particularly in the already congested housing market' — but appears indicate that policymakers should ultimately come down on the side of employers who insist they must retain access to large pools of foreign labour, in the name of sustaining 'growth'.
The report suggests that the Bank’s preferred way to alleviate the inevitable pressure on housing would be to simply build more of it, as 'continued focus on addressing housing supply shortages can help ensure that Ireland remains an attractive location for the migrants who will be needed to fill vacancies in the labour market'.
Author's comment: The officials at the Central Bank of Ireland are like turkeys voting for Christmas. There has been no consideration of the enormous impact this will have on the Irish countryside, infrastructure congestion and social cohesion.
We have seen what happens with this sort of exponential expansion of the foreign-origin population and housing stock on this side of the Irish Sea, and it's not pretty. Someone in the Irish government needs to have a word with these profit-hungry vultures before it's too late.