Social Partnership fails workers
LE DOMHNALL COBHTHAIGH
I was recently on the Internet doing some research when I
discovered a paper written in July 1991; entitled "On the causes
of Irish Unemployment" (Frank Barry UCD and John Bradley ESRI).
What use could such a document be to us now, some might ask, now
that we live in the era of the Celtic Tiger? Yet this document
contains pearls of information regarding the underlying nature of
the 26-County economy, something which will become more
transparent with the onset of more difficult economic
circumstances in the near future.
The document studied Irish economic history from 1961 to 1987,
a period when the Irish economy was stagnant by today's
standards. Many of our population were forced to seek employment
outside the state and those who stayed had to endure poor
conditions and rates of pay. In particular, one statistic took my
attention, that over this time (calculated over short-term
periods) a 1% rise in labour productivity generated a 0.61% rise
in average wage rates. This in itself is confirmation of a form
of economic analysis now abandoned by many on the left. By
definition, a rise in productivity will generate a proportionate
increase in GDP, and by extension GDP per capita. Our overall
wealth increases by 1%, yet how much is passed on to the worker?
Only just over half! The beauty of this statistic is that it is
immune from distracting arguments over the need for capital to
recover interest and neatly avoids rates of expenditure on
overheads. It represents the fundamental inequality at the base
of the existing dominant mode of production: that workers receive
only a proportion of the wealth they create, the rest serves as
interest on the capital invested (this profit itself becoming, in
turn, capital for further reinvestment).
The question then arose as to whether this circumstance has
changed over the past ten years. In order to answer this, a visit
to the Central Statistics Office website was necessary. Figures
produced by the annual Census of Production indicated that over
the six-year period (1994-99) and taken across all industrial
enterprises, gross value added (a measure of value created by
economic activity) increased from 14.679 million to 30,059
million (or 104.8%), yet wages paid to workers only increased by
43% (from 5.310 million to 7,593 million). Based on these
figures, an increase of 1% in productivity would generate only a
0.41% increase in wage rates. Clearly, according to these
statistics, workers in Ireland are being exploited at higher
rates than in earlier periods when we were experiencing
stagnation.
The reasoning for such a decrease is manifold. It certainly
includes the ever greater demands for return on capital invested
(or else the risk of capital flight outside the state), the
greater proportion of fixed capital investment on equipment and
machineries and the wholesale repatriation of profits outside the
state. Such figures totally undermine the credibility of 'trickle
down' theories in which overall growth is said to reach those at
the bottom of society.
Indeed, this increase in the rate of labour force exploitation
has occurred at precisely that time when social partnership was
being fted as the genesis of all success in the Irish economy.
Perhaps this is the most important factor at play, that social
partnership has merely bound organised labour to 'Thatcherite'
neo-liberal economic policy - one attuned to the needs of
capital, not of workers. These figures clearly demonstrate the
bankruptcy of the 'consensus' policy in terms of benefiting those
at the base of Irish society - those who produce the wealth.