Government fears industrial strife as workers seek pay rises 

Siptu has called on the Government to step up and protect the rights of low-paid workers and to ensure they get pay rises that are in line with inflation. File picture: Daragh Mc Sweeney/Provision

The Government is bracing itself for industrial strife as public and private sector workers are demanding pay increases of at least 5% to offset the rise in inflation.

The Cabinet sub-committee on the economy is to formally decide the final details of an inflation-busting package on Thursday to tackle the cost of living crisis, but trade unions and opposition parties are already demanding hikes in pay for workers.

Cabinet ministers have expressed a growing concern that with inflation likely to be a medium-term burden, workers and their unions will move to withdraw their labour unless demands are met.

Labour Party’s finance spokesman Ged Nash said the Government must move to introduce a living wage of €12.90, calling for an end to the “low wage culture in Ireland”.

'Epidemic of low pay'

“We have an epidemic of low pay in Ireland," said Mr Nash. "That is the reason those who are merely existing on low and middle incomes are finding it so difficult to absorb the additional costs they are burdened with at the moment. 

"They cannot survive. One-third of all Irish workers earn less than what might be considered the living wage of €12.90 per hour.”

Gerry McCormack, the deputy general secretary of the country’s largest trade union, Siptu, has called on the Government to step up and protect the rights of low-paid workers and to ensure they get pay rises that are in line with inflation.

Mr McCormack said the trade union would take action to protect the income of its members, many of whom are going to be badly hit by inflation.

He said ‘rip-off Ireland’ had returned and the increase in the cost of products and services was as a result of people taking advantage. That was what was driving inflation, not increased wage demands, he said.

Pay increases are running at 3.5% to 4% while inflation is running at 5%, said Mr McCormack. However, he acknowledged that there are many sectors experiencing difficulty, such as hospitality.

“We need the Government to step up,” he said.

A new public sector pay deal is to be negotiated this year with the current deal, Building Momentum, due to be completed in October. 

That deal awarded all civil and public servants a 3% increase over its lifetime at a cost of €600m to the exchequer.

However, senior ministers are admitting that it would be “impossible” to deliver a deal that is running at below the prevailing rate of inflation, which is above 5% at present. Such a deal over three years would cost the exchequer over €1bn, in order to stand still.

Public Expenditure Minister Michael McGrath is said to be anxious to avoid industrial unrest but has privately insisted he will not sign a deal “at any cost”.

“It would be unpalatable for Michael not to have a public pay deal, but in a feverish atmosphere of cost pressures, he cannot give away the kitchen sink either. It will be very tricky to get all unions on board,” said one minister.

'Strong disagreements'

While Thursday’s cost of living package is likely to focus primarily on easing the energy costs for households, the

Irish Examiner has learned that there are “strong disagreements” within the Coalition as to how else to help people.

Several ministers have expressed concern that some of the measures proposed will simply “be chasing inflation” and making the situation worse.

Ministers have questioned the wisdom in seeking to waive medical fees which “will have a very limited impact” and will “burn up a lot of money” that could be used more effectively elsewhere.

The support for enhancing the energy credit is based on the fact it is seen as not inflationary and will benefit huge swathes of the population in a speedy manner.