Business leaders have seized on a 41 per cent increase in redundancies last month to warn that the jobs market faces catastrophe unless urgent steps are taken to reduce costs and confront a debilitating "high wage culture".
Bemoaning the Republic's business environment as "structurally flawed", the Small Firms Association (SFA) lobby group pointed to 2,138 notified redundances last month as evidence that the economy could be headed for a cycle of terminal decline unless radical surgery is carried out.
The fact that redundancies for 2003 are running below last year's figure, at 16,884 from 17,680, does not diminish the gravity of the predicament facing Government, industry and workers, said the association's director, Mr Pat Delaney.
He said: "Put simply, these figures confirm that employers are having to make efficiency gains by reducing the number of people they employ and the number of hours they work.
"The average number of hours being worked is declining and new job creation is at a 10-year low.
"Our business model is structurally flawed and we will continue to read business obituaries every day of the week until we realise that fundamental changes are now required to our cost base," he added.
The slowdown in the economy cannot simply be measured in terms of jobs shed, according to the association.
Employees are working shorter hours and earning less overtime - with the Government suffering a consequent loss in tax revenues. Average hours worked fell to 37.2 this year from 42 in 1999.
The remarkable resilience in the labour market, as revealed by last week's quarterly national household survey, concealed a shift towards part-time work and substantial cuts in overtime, said Mr Delaney.
Tackling insurance inflation and reducing overheads were important, but trimming wage inflation was just as essential, said the association.
A survey by the SFA shows that 18 per cent of small companies have had to let workers go in the past 12 months and that 9 per cent plan further redundancies.
Mr Delaney said: "Many small companies have had to engage in drastic cost-cutting measures in an effort to survive the economic downturn.
