The current policy of wage restraint is unsustainable, according to Mr David Hughes, Deputy General Secretary of the Irish Nurses and Midwives Organisation. Writing in the Organisation’s current magazine, as nurses and midwives assemble for their Annual Delegate Conference in Killarney this week, Mr Hughes said that the current housing crisis is the mere tip of the iceberg of homelessness in this country unless wages significantly increase.
As house prices creep back to the levels they were prior to the recession, Mr Hughes said nurses and midwives, and all other public servants, are now earning over 12% less than they did in 2008. Many other workers, throughout the economy, have had pay cuts, or pay freezes, and this has led to a situation, where Mr Hughes said the figures simply do not add up.
The two key equation’s in determining the ability of workers to provide a roof over their head are the amount of a loan they can borrow in relation to their income, which is now set at a minimum of 3.5 times the annual gross salary and the maximum loan against the value of the property to be purchased, which is now capped as 90% on properties up to €220,000 and 80% on house valued more than that. The simple reality is that workers on the average industrial wage will not be in a positon to purchase a home even based on current property values.
Mr Hughes argues that the average house price across Leinster is now €220,000 for a basic three bedroomed home. He said an individual nurse, after serving seven years, reaches a salary just above the average industrial wage which, based on the current loan to income ratio, would leave them €90,000 short of the purchase price of that average house. He said: “Even a couple trying to buy a house will be required to have deposits of between €20 – €40,000 for an average house on top of the maximum loan they can avail of. “
Mr Hughes concluded: “Public servants must have a much accelerated restoration to 2008 pay levels across the economy. If there is no significant change in housing policy, control of rents and price control on houses, wages will have to increase significantly.”