Public sector pay talks must focus on cost of living, says trade union president

ICTU president Kevin Callinan said the relatively recent advent of inflation has led the European Central Bank (ECB) to identify excessive company profits as a bigger driver of inflation than wage demand. Picture: Gareth Chaney/ Collins Photos

The cost of living must be the main focus in pay talks this year for public service unions, the president of the Irish Congress of Trade Unions (ICTU) has warned.

Kevin Callinan made the remarks as he addressed delegates of the Irish National Teachers Organisation (INTO) as the union’s annual congress got underway in Killarney on Monday.  Mr Callinan is the general secretary of Fórsa trade union and chairs the ICTU’s Public Services Committee (PSC).

The current public service pay agreement, Building Momentum, expires at the end of 2023. Talks on a successor agreement are expected to take place in the coming months.

Unions “were clear” that last year’s Building Momentum review did not fully compensate for the rate of inflation, which averaged 8% over 2022, he added.

Last October, a review clause of Building Momentum saw a new agreement endorsed by all unions affiliated to and associated with ICTU of 6.5% across two years.

On Monday, Mr Callinan said: “When workers were weighing up the terms, they were mindful of government statements of intent to introduce various measures, including budgetary tax changes.

“We’ve already made it clear to government and employers if these supports are withdrawn and if prices remain elevated — as they surely will — the shortfall will have to be made good in wage bargaining across the economy.” 

During the upcoming pay talks, unions will concentrate on a number of key cost-of-living issues, including the need to “make good the shortfall in pay against inflation” during the remaining term of the current pay agreement, Mr Callinan told the conference.

This will be in addition to factoring in the effect of the cessation of Government cost-of-living measures and supports, and in anticipation of cost-of-living projections over the period of any proposed agreement, he added.

The relatively recent advent of inflation has led the European Central Bank (ECB) to identify excessive company profits as a bigger driver of inflation than wage demand, Mr Callinan said.

“Many commentators are quick to try to dampen down wage demands with talk of a wage-price spiral. Working people can see through those arguments, particularly when they are exposed to obvious price-gouging.

“To be clear, there can be no sustainable case for wage moderation while inflation continues to be driven by excessive company profits, neither in the public or private sector.” 

Meanwhile, poorly resourced public services and inadequate infrastructure are holding back the potential of the Irish economy, Mr Callinan told the conference. He added that it is also “causing real hardship for many who can't access housing, essential healthcare or affordable childcare”. 

Effective social dialogue can counter the kind of populism seen with the recent upsurge in anti-immigrant commentary, he said.

“It can help to replace short-term thinking with long-term planning, designed to meet the multiple challenges of our times and allowing the country to move forward more united, provided that the social dialogue is based on adequate levels of social protection, collective bargaining as the norm, and quality public services."