Irish pay rates rose by more than double the EU average in gross terms last year and by almost seven times the EU average when adjusted for inflation.
The figures are contained in the latest annual review from the European Industrial Relations Observatory.
The large discrepancy between Irish pay increases and the EU average is partly accounted for by a fall in real wages in six EU member-states after inflation is taken into account.
Another factor is that the high Irish rate of inflation led to a special 2 per cent pay increase for Irish workers in addition to the 5.5 per cent already agreed in the Programme for Prosperity and Fairness.
However, the EIRO figures also show that rising inflation and wage drift are no longer uniquely Irish phenomena. The average EU pay increase was 3.5 per cent in 2001.
Nor do the figures take account of tax changes in EU states, which would boost the margin considerably in favour of Irish workers.
The latest EIRO review will reinforce the argument by the Irish Business and Employers' Confederation that wage drift here is making the economy uncompetitive.
However, unions will counter that wages are comparatively low, and increases have been offset by rising productivity, as demonstrated by the recent wage survey from the Federation of European Employers (Fedee), which listed Ireland 14th in a survey of 39 European states and 12th within the EU.
Three of the EU states which registered negative growth in real wages last year, the Netherlands at -0.7 per cent, Italy at -0.4 per cent and Germany at -0.3 per cent, still come well ahead of Ireland in the Fedee wages league, in sixth, eighth and 11th place respectively.
The EIRO figures, which are based on major collective bargaining agreements at national or sectoral level, show Irish wages increased by 7.5 per cent last year, compared with an EU average of 3.5 per cent.
After adjustment for inflation, the Irish wage increase was 3.5 per cent and the EU average was 0.6 per cent.
The EIRO includes Norway with the 15 EU member-states, and it had the second-highest nominal increase in pay after Ireland at 5 per cent (2.3 per cent inflation adjusted).
In Luxembourg the respective figures are 4.5 per cent (2.1 per cent), in Belgium 4.4 per cent (2.0 per cent), Netherlands 4.4 per cent (-0.7 per cent), Portugal 3.9 per cent (-0.5 per cent), Finland 3.3 per cent (0.6 per cent), Greece 3.3 per cent (-0.4 per cent), UK 3.2 per cent (2.0 per cent);
Sweden 2.8 per cent (0.1 per cent), France 2.6 per cent (0.8 per cent), Spain 2.5 per cent (-1.3 per cent), Austria 2.4 per cent (0.1 per cent), Denmark 2.4 per cent (0.1 per cent), Italy 2.3 per cent (-0.4 per cent), Germany 2.1 per cent (0.3 per cent).
In its commentary on Ireland, EIRO states that the increase in the national minimum wage from €4.40 to €4.70 an hour in July 2001 was important in raising income levels among the low-paid "and has facilitated a small, albeit important, reduction in the gender wage gap.
"It would appear, however, that it has had little impact on overall trends in income and wealth distribution. This is because relative income inequality, and the gap between rich and poor, has increased in Ireland."