'With this inflation, it’s low-to-middle income people who are going to suffer quite badly'

'The value of the wage packet this year is hugely diminished compared to last year,' said Ictu's Patricia King. File Picture: Pexels

Employers across the country are to be inundated with pay hike demands from workers struggling to bear the cost of inflation which is now at a 22-year high.

Irish Congress of Trade Unions general secretary Patricia King confirmed its Private Sector Committee will meet on Tuesday to discuss the crisis and plot their demand for members' pay increases.

Public sector unions already met with the Government on Wednesday to discuss wage hikes for State employees. 

According to Fórsa trade union general secretary Kevin Callinan, the Government has acknowledged there has been a "change in the underlying economic assumptions" that underpinned an existing pay deal and that it would have to be revisited.

Both sides have agreed to ask the Workplace Relations Commission to facilitate a meeting in the coming days to help them to find a new deal.  

Record surges

The demands for increased pay come as Central Statistics Office laid bare the crippling inflation hitting many parts of the economy. 

While it found prices rose 7% in the year to April, experts believe inflation has still not peaked. 

That means consumers will face even higher costs for food and drink, as well as record surges in the cost of heating and powering their home, and for petrol and diesel.

“What is really happening here is the value of the wage packet this year is hugely diminished compared to last year,” said Ms King.

About 3.5% of workers earn the minimum wage of €10.50, but Revenue’s real pay reporting will tell you about 62% of workers earn €37,000 or less. That’s not a huge wage.

“With this inflation, it’s low-to-middle income people who are going to suffer quite badly.” 

She said individual private-sector unions are already entering negotiations with employers to try to help their members deal with the surging cost of living.

The CSO figures show the high cost of transport, fuel, and housing is leading the rising inflation figures but, at the same time, the price of some basic food staples are also on the rise.

The likes of bread (up 8.1%); flour and cereals (up 11%); poultry (up 7%); and milk, cheese, and eggs (6.2%) have all risen in the past year as cost-of-living pressures heighten right across the economy.

Meanwhile, in the year to April, electricity rose 27.8%, gas rose 50.5%, and home heating oil almost doubled (up 90.1%).

While employers' body Isme conceded that rising accommodation costs, along with increases in food and fuel prices, have created a “perfect storm for workers, especially the lower paid”, it said pushing up wages is not the solution.

The vast majority of employers cannot afford to pay the wages being sought by employees to cover these costs,” it stated.

Central Bank governor Gabriel Makhlouf said the European Central Bank must start increasing interest rates to help fight inflation.

Central Bank of Ireland governor Gabriel Makhlouf. Gareth Chaney/ Collins Photos

He told a conference of employers' body Ibec: "I am acutely aware of the impacts of inflation on people's lives and businesses — it affects the whole community, and some more than others.

Mr Mahklouf echoed Ms King's assertion that lower-income households were disproportionately affected along with older people, and rural households. 

"We have reached the point where we on ECB's Governing Council need to act," said the Central Bank governor. 

Our objective is for inflation to be at 2% over the medium term — levels are significantly above that now, and it is time for the council to move to end net asset purchases under the asset purchase programme next month or in July."

The governor also said there was a risk that strong employment growth in Ireland could add to price pressures should wages increase rapidly and become “detached from underlying productivity growth”.