Unions must reign in wage demands, warns lobby group

Influential employers lobby group IBEC tonight warned unions to rein in wage demands or risk damaging the economy as they opened new national pay talks.

With Congress and the country’s largest union, SIPTU, claiming previous rises have been eroded by inflation, the issue is expected to dominate negotiations.

But IBEC insisted protecting businesses and jobs, rather than meeting wage demands, was the critical issue.

“We cannot afford to continue to increase pay at twice the rate of other euro area countries,” the group’s director general Turlough O’Sullivan said.

“Our rate of pay growth must moderate substantially to low single figures as part of a wide range of measures needed to restore competitiveness.”

The unions, backed by Congress, are expected to demand wage increases at least matching inflation, adding that executives are securing massive bonuses while shop floor workers fall further behind.

Mary Harney, Health Minister, urged all sides to consider wider implications in the pay negotiations.

“I would hope that all sectors, public sector and private sectors, those that represent employees in both sectors, would be mindful of the overall national interest,” she said.

The talks began at Government Buildings with the main players, apart from politicians, sitting down to discuss schedules and arrangements for negotiations over the coming weeks and months.

They are being held in the context of rising employment, with 200,000 people on the Live Register, its highest level in ten years and inflation at around 5% - one of the highest levels in the euro zone.

The Exchequer also reported poor tax returns for the first three months of the year, 600 million euro below Taoiseach-designate Brian Cowen’s Budget forecast.

Alongside these alarming figures, Ibec claims pay rates have grown almost twice as fast as euro countries over the last 27 months with Towards 2016 guaranteeing rises of 10.4% – with average wages €45,000 – compared to 6.6% across the euro area.

The national wage agreement affects around one third of workers directly but other issues such as tax relief, deals on Government spending and commitments on wider social reform ultimately impact on all workers.

Fr Sean Healy, director of the Cori Justice think-tank, said the Government’s bona fides were being questioned over failures to meet previous commitments made under Towards 2016.

“We have serious concerns now about the lack of progress being made in delivering key social commitments,” Fr Healy said.

“It is important to recognise that poverty, inequality and social exclusion are at unacceptable levels in Ireland. Likewise the issue of sustainability remains as a key challenge to be addressed.”

Arthur Morgan, Sinn Fein workers’ rights spokesman, said the welfare of the lowest paid should be dealt with as a separate issue.

But he also hit out at those calling for a tightening of belts.

“The Government may have deferred their wage increases for now, but for the Government and employers to be preaching about wage restraint when CEOs and Government ministers are taking annual raises far in excess of the average industrial wage, is beyond hypocritical,” he said.