One of Ireland’s leading unions has warned of “catastrophic” consequences following the collapse of economic recovery talks in Dublin at the weekend.
Amid the global recession, it is estimated that 1,500 people are losing their jobs every day in the 26 Counties as the pump-primed, high-cost, over-leveraged southern economy fails.
After months of talks, the 26-County Taoiseach moved unilaterally last week to impose a range of measures in order to raise 2 billion Euro for the public exchequer.
The latest package of measures hinged on a salary-based pensions levy for workers in the public sector. The move was demanded by Irish business leaders, alarmed at the perceived advantages enjoyed by public employees over their private sector counterparts.
Union leaders have warned of major confrontations with employers over pay cuts and redundancies.
The general president of the Siptu union, Jack O’Connor said the measures imposed by the government “were designed to bring about a reduction in pay across the economy as an alternative to devaluation”.
“Clearly the strategy is to establish the pay cut in the public service so that it can be driven right across the economy.”
The new pensions levy will be calculated on gross pay and will range from a 3 per cent contribution for public service workers earning O15,000 up to 9.6 per cent for staff earning O300,000.
The Cabinet’s package of spending cuts announced yesterday is also looking for O600 million by cutting funding to overseas development aid, an early childcare supplement and advertising and PR contracts.
Mr O’Connor said the task of convincing the authorities and the employers to adopt a better and fairer approach “will require the most determined, united and sustained campaign the trade union movement has embarked upon in its entire history,” warning no one union would succeed on its own.
The week saw a blizzard of job loss announcements in all areas of the economy and country, with thousands of jobs being cut or moving to cheaper economies.
High-profile multi-national firms such as Bombardier Aerospace in the north and Ericsson in the south announced major cutbacks, with some workers claiming the recession was being used as an “excuse” for redundancies.
But the rising unemployment figures appear to be vaulting upwards. January showed the greatest jump in job losses on record in the 26 Counties, with 36,500 joining the dole queues last month.
The Taoiseach Brian Cowen is coming under pressure for a change of strategy after admitting that the numbers of people receiving unemployment benefit is expected to exceed 400,000 by the end of the year. He also warned that Ireland’s recession could last for years and that the 26 Counties could see a 10-12% drop in living standards.
Responding to repeated calls by the public for “leadership”, Mr Cowen told the Dublin Chamber of Commerce last night that the Irish people “had the qualities required to meet the challenge posed in these difficult times”.
“The one thing that characterises their success is their self-belief. If we decide to wallow in the sea of doubt do not be surprised if we remain in the turbulent waters that we are in today.”
At one point, some economic reports showed Ireland to be among the very wealthiest nations, surpassing even Switzerland and Monaco.
Mr Cowen said many people were finding it difficult to understand how Ireland had suddenly gone from a position of “unknown prosperity” to “survival stakes”.
“The profound changes that are happening in the global economy mean that we won’t revert to the high rates of growth but we can revert to growth more quickly if we stick together as a community,” he said.
However, the economic collapse has led to predictions of a major rebuff for Cowen’s coalition government in the local, European and two parliamentary by-elections, now scheduled for June 5th of this year.
There is increasing public anger that low-paid and frontline workers are being made to suffer the consequences of apparent profligacy and incompetence among a wealthy, clubbish elite.
Fine Gael leader Enda Kenny described the latest jobless figures as “catastrophic”, amounting to an “employment bloodbath” that would have “horrific social consequences”
Labour leader Eamon Gilmore warned that “if we continue to lose these jobs at the rate were losing them, the government won’t be able to keep up.”
Announcements of sudden redundancies and swingeing cutbacks have also come in tandem with reports of giant bonuses, salaries and profits being secured by various bankers, broadcasters, civil servants and property developers.
The contrast between the worlds of international finance and factory-floor labour was clearest in Waterford. Workers at the world-famous Waterford Crystal in the city are maintaining a sit-in after the plant was suddenly ordered to cease operations last weekend.
In defiance of an agreement with the workers, the receiver appointed last month attempted to shutter the plant amid corporate haggling over the brand’s remaining value. The campaign to save jobs and pensions has since received international media attention.
Thousands of people attended a street protest in Waterford in support of the workers on Wednesday, while a group of workers also demonstrated at the offices of receiver Deloitte Touche in Dublin on Tuesday.
The week also saw some 15,000 students come out in Dublin against the reimposition of fees for third-level education in the largest protest of its kind so far this year.
Speaking in the Dail during the debate on the government’s latest cuts and levies, Sinn Féin economic spokesperson Arthur Morgan charged the Taoiseach with causing “irreparable damage”.
“The unemployment rate is now at 9.2% and if we keep on losing jobs at a rate of 9,000 a week the so-called two billion savings that the Government claims to be making will completely evaporate through the increased burden on our social welfare system,” he said.
Referring to a declaration by Mr Cowen of an “old fashioned approach” to job creation, Mr Morgan asked why it was that “every other country in the western world is engaged on kick-starting the economy and simply not kicking public sector?
“What is sickening about the Government’s cut back plan is through all the talk of sharing the burden -- once again it is our low and medium paid workers who are getting it in the neck.
“It is nurses who will lose 2250 Euro from their salaries and it’s Gardai who will have thousands of Euro taken from their incomes. Hard working people will now have to take effectively a pay cut of up to three thousand euro before paying the income levy, health charges and other measures through the actions of this Government
“What makes this even more difficult to accept is that the [head of the Health Service Executive] Brendan Drumms of this world who earn almost half a million euro of tax payers money between their salary and bonuses are continuing to get off scott free and have been allowed to go on wrecking the public service with their privatisation plans.”
“The Taoiseach will have to reengage and the Taoiseach will have to finally start listening,” he concluded.