Wage restraint is all the more important now, when price levels have been falling, with the result that nominal wage rates that might have been viable a couple of years ago, no longer make commercial sense. The problem is even worse because of the unsustainable upward drift in wages that occurred in the mid 2000s.
I am sorry to bang on about this, but Central Banks aim at overall price stability to help ensure that wage and price planning can be carried out in a manner that ensures stable growth. When, as in Ireland today, inflation undershoots the target and goes negative, it is incumbent on me as a central banker to alert workers and unions to the consequences.