Republican News · Thursday 03 February 2000

[An Phoblacht]

Is a 15% wage rise the best deal possible?

5 an hour minimum wage delayed until October 2002


The price of a house increased by 17.9% last year. This week, the Irish Congress of Trade Unions (ICTU) negotiated wage increases of 15% for 26-County workers over the next 33 months. A further 10% wage increase will be delivered through income tax cuts. It still doesn't add up to workers or their families being anywhere closer to purchasing a family home.

If the real aim of the talks was to combat social exclusion and distribute the economic benefits of wealth fairly, there has been a failure to make the employers' organisations face up their responsibilities
ICTU General Secretary Peter Cassells described the agreement as aiming to ``get the balance right between two important needs: distributing the benefits of economic growth fairly and maintaining the competitiveness of Irish industry''.

How this squares with the fact that thousands of new of workers entering the labour force are effectively being told that owning a family home will be beyond their means throughout their working lives is unclear.

The new 26-County wage agreement also proposes a national minimum wage of 4.40 an hour, which will rise to 4.70 in 2001 and 5 in October 2002.

The ICTU have been campaigning for a minimum hourly wage of 5 for over a year. The reasoning behind negotiating an agreement which delays the delivery of the 5 rate for a further two and a half years is unclear. Again, how failing to deliver on a realistic minimum wage is ``distributing the benefits of economic growth fairly'' is mystifying.

The agreement negotiated by the ICTU has been referred to their membership without a recommendation for acceptance. MANDATE, the second largest union in the 26 Counties has said it has ``severe misgivings'' about the failure of employers to offer a better deal for low paid workers. Peter McLoone, general secretary of IMPACT, the public service union, is looking for his members to support the deal. He believes that ``no other process could throw up better terms''.

The clear division within the ICTU over the terms of the new wage agreement shows that the negotiating process of the last months has been a failure for the trade union movement. Yes, they have delivered the highest wage increases of any of the previous four agreements. However the economy has never been producing as much wealth as it is today, so the 15% wage rise is not that impressive.

The ICTU's failure on the minimum wage is not the only other drawback. Why did they not attempt to secure an agreement from the employers on profit sharing? The profitability of Irish companies has increased massively since the first wage agreement in 1987. Profits and professional earnings amounted to just over 6 billion in 1988. In 1998, this had increased to over 22 billion, up nearly 267%.

Wages and salaries were just over 10.5 billion in 1998. In 1998, this had increased to 23 billion, a 117% increase. The best way for workers to truly share in the benefits of economic growth is for a state profit sharing scheme to be set up. Public sector workers also need to be rewarded for the social contribution their work makes to society. The state's employers could be asked to contribute to this.

This highlights another drawback in the details of the agreement that have been published so far. The role and the responsibilities of the employers' organisations seem fairly light. Again, if the real aim of the talks was to combat social exclusion and distribute the economic benefits of wealth fairly, there has been a failure to make the employers organisations face up their responsibilities. Other details, like an agreement on union recognition, are strangely absent from the published details.

Workers will now get a chance to debate and vote on this agreement. It seems less likely that the agreement will be endorsed by a majority of union members. Individual unions have to look beyond their own self interest and ask if they can really support a deal that fails to deliver for the low paid.

Inflation double standards


Inflation is back. Just when workers were realising higher wage increases from employers, the real benefits of those increases are being diluted by higher inflation figures. Inflation in the 26 Counties has jumped to 3.4%, its highest level for seven years.

After 12 years of unparalleled wage restraint, it is clear that workers are not the cause of rising inflation rates
26-County inflation is now the highest within the Euro Zone. Now the euro currency, of which the punt is part, has fallen to a new low against the dollar and it is only a matter of time before the European Central Bank's (ECB) governing council raises interest rates, which could over time increase inflation even more.

Inflation is growing in the 26 Counties because of the rise of cigarette levies in the budget, increasing oil prices and factory gate prices. The oil price increases have increased fuel, light and transport costs In the previous period of long-term inflation, workers were often blamed for rising inflation as they sought cost of living wage increases. After 12 years of unparalleled wage restraint, it is clear that workers are not the cause of rising inflation rates, which are set to average 3.9% in 2000.

The problems of inflation in the Irish economy have been created by either Dublin Government policies or by external factors such as the euro rate and international oil prices. Yet in Ireland there are still calls for workers to moderate their wage demands because of the rising inflation figures.

The other side of the inflation coin is that the rises show the lack of control the Dublin Government has over the economy. They cannot control the value of the euro, the level of interest rates or the price of oil. They can though, blame workers for events and circumstances which are totally out of their control.

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