Unions seek €30/week for lower paid, cost-of-living increases for everyone else

August 7th, 2008 | by Andrew Ó Baoill |

A follow-up to my recent posting on the break-down of national pay talks in Ireland. The unions have now developed guidelines for local bargaining platforms:

Under the guidelines, unions are to seek flat-rate increases of €30 per week for low-paid workers and rises that match inflation – about 5 per cent – for those above this threshold. Unions will look for further rises in profitable companies.

The guidelines cover private sector negotiations – it’s unclear, as of yet, what the strategy will be for public sector employees. The urgency and importance of the issue was underlined by union leaders:

According to the chair of the Private Sector Committee, Jerry Shanahan (Unite) unions would lodge claims where pay deals have expired and consult with members as to conditions in each sector.

“Some pay deals expired as far back as April and, in the absence of a national deal, it is incumbent on us negotiate new deals. Prices have not stopped rising and inflation has not slowed down. We need to protect people’s standard of living.”

He also confirmed that unions will be guided in their claims for improved pay and conditions by the needs of members – “they will set the agenda,” he said.

Interesting to see the stress on a flat-rate increase for the lower-paid. The government had, incidentally, proposed a purely flat-rate increase close to the end of talks, without evident support from unions or employers. Given the intransigence of employers (“pay freezes all around”) it may not have been in ICTU’s interests to respond positively to the government proposal at that stage – more useful, probably, to be able to craft a platform (or “guidelines”) on their own terms, rather than making a concession in the dying hours of the talks without a productive response from employers.

One item to close: in my last post I noted that wages, as a share of GDP, have decreased from 50% in 1988 to 35% now. This is undoubtedly a major source of discontent among employees – who may feel that they have not benefited proportionately from the boom. Other critical issues, however, include the following:

  • 42% of Irish workers today are female, with a participation rate (in the workforce) of 54.2%, against 72.9% for men. As recently as 1994 women were only 37% of workers – with a participation rate of 39% (as opposed to 68% for men). This represents increased gender equality, but has some unintended economic consequences. In particular, with most of the increase in female participation occurring in younger cohorts, many married couples with children now have both parties working (2/3 of married women between 25 and 54 are in the workforce), which has resulted in a boom in the childcare industry – and a similar increase in the cost to parents. In 2005, over 40% of families with pre-school aged children relied on paid childcare, at an average cost of €131 per week.
  • The housing boom/bubble associated with the broader economic boom has resulted in significantly increased housing costs. From 1999 to 2005 alone, “the proportion [of household expenditure] spent on Housing was up from 9.6% to 12.0%” up from €55.41 to €94.51, an increase of 70%. In 2005, weekly rent in private dwellings averages €181.49 while the cost to mortgage holders averages around €110 per week.
  • Despite huge rises in spending on healthcare (with non-capital public spending up 72% between 1997 and 2006), there is a sense that service has not improved to acceptable standards. Ireland’s spending still lags European averages, with total spending at 7.5% of GDP, below an EU-27 average of 8.8% (though as a percentage of GNI, Ireland matches that 8.8% level. Ireland’s 7.5% is lower than all other ‘EU-15’ members.
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