Wage demands must be balanced


It looks like we were expecting a winter of industrial unrest and strikes as workers – in both the public and private sectors – rally for wage increases in the face of soaring living costs.

Kyte Powertech workers are due to begin industrial action this Friday – one of the first campaigns seen in the private sector.

The strike comes as employers come under increasing pressure to deliver pay rises due to the dramatic rise in the cost of living, with business groups and the government warning they cannot chase inflation away.

The government and public sector unions have been in a row in recent months over wages and conditions. The teachers have not yet returned from their summer holidays and are already threatening to strike.

Under the current public sector wage deal, ‘Building Momentum’, workers received a 1% pay rise last year, with another 1% due in October, but unions have triggered a clause revision contained in the agreement because of the surge in inflation.

The Association of Secondary Teachers in Ireland (ASTI) and the National Organization of Irish Teachers (INTO) have both said they will vote next month on possible industrial action unless the government puts out “an offer of respectable remuneration on the table”.

The Unite union must also elect its public sector members.

And last month, SIPTU said it was consulting its members across the civil service ahead of polls for industrial action.

Fórsa, which represents 82,000 workers, mostly in the public sector, is also expected to endorse a planned campaign by the Irish Congress of Trade Unions (ICTU) that holds the prospect of industrial action in the fall.

The government is ready to resume talks with unions at the Workplace Relations Commission (WRC) on public sector wages.

Public Expenditure Minister Michael McGrath has already conceded that civil servants deserve a pay rise. However, the government has a duty to ensure that the public wage bill is affordable.

“We just have to be careful that we don’t have a situation where wages are driving inflation and we end up pushing it up and making it worse.”

He makes a valid point.

But something has to give. Households and families are experiencing the biggest cost of living squeeze in nearly four decades.

Figures from the Central Statistics Office (CSO) showed consumer prices rose by an average of 9.1% in the 12 months to June 2022 – the fastest rate of price growth seen in the Irish economy since 1984. The main drivers of the rising cost of living are energy, fuel and food. Electricity prices, for example, have risen nearly 41% and the cost of heating oil has climbed 115% since the same period last year. This is going to hit households hard in the winter – especially the so-called rushed middle who don’t benefit from the fuel allowance.

People cannot afford these increases and many households are already making hard choices, with some being pushed into poverty.

The solution here is not just to increase salaries – even if some increases are necessary. This is a brutal and unsustainable solution that would only make the situation even worse.

The government has already hinted at new measures to ease cost-of-living pressures in the upcoming October budget. These must be creative and include changes to income tax brackets and codes, improvements in social protection and other initiatives.

There is also talk of a comprehensive agreement between unions, employers and the government covering wage, economic and tax policy. Some sort of social partnership agreement could incorporate small wage increases, but take into account tax cuts, increases in social protection and service improvements.

Public and private sector employers are already developing remote and hybrid work models, which can provide benefits – financial and otherwise – to everyone involved. This could be expanded or formalized. And maybe it’s time to look more seriously at the four-day workweek model.

Creative thinking is required and everyone should be flexible and open to compromise. You can’t crack a nut with a hammer.

But we have to start harvesting those nuts for the long winter months ahead.

About Alexander Estrada

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