Congress General Secretary David Begg told delegates at the Mandate trade union conference in Killarney that "Ireland needs a pay rise, if we are to see genuine recovery take hold."
Addressing the conference, Mr Begg said: "Let me clearly state that growth and genuine recovery cannot happen unless and until we start seeing pay rises across all sectors of the economy.
"Growth requires increased demand in our domestic economy and that can only happen when working people have more money in their pockets to spend. It's not rocket science, just a statement of the obvious," Mr Begg said.
"When people are trying to pay off enormous burdens of personal debt they have no money to spend on goods and services. While policy makers speak of an export led recovery, the reality is that the vast majority of jobs are influenced by domestic demand.
"Between 1994 and 2001 more than 450,000 new jobs were created, with 82 percent of that number created in the domestic economy.
'that tells us we have to get the domestic economy moving again. It tells us we need people spending money in shops. It tells us some way has to be found to ease the crippling burden of debt affecting so many families.
"It tells us that Ireland needs a pay rise," Mr Begg said.
The Congress General Secretary warned that policy across Europe required a dramatic change of course, "if we are to avoid the spectre of deflation, which could spell disaster for heavily-indebted countries like Ireland.
'six years ago we warned of deflation and stagnation if the austerity agenda was implemented and today we hear people like George Soros warn that Europe – including Ireland – could face 25 years of a slump, as a result of these flawed policies.
"What a mess they have made of our world - these austerity hawks, champions of small Government, believers in self-regulating markets, theorists of the efficient market hypothesis and new classical macroeconomics.
'they have made austerity a chronic condition and created a Europe in which trust is low, the economics are flawed and the politics are toxic."
He said it was crucial that trade unions focused on their primary mission of protecting and improving the pay and conditions of members.
