Social partnership - Signs deal is going out-of-date

As employers and unions finally accept the social partnership agreement Towards 2016, there are worrying signs it is already going out-of-date because of Ireland’s worrying inflation trend.

As the cost of electricity, petrol, home heating oil and other essential commodities continue to rise, the value of 10% pay rises over 27 months is already being eroded.

Nationally, the importance of this deal is its capacity to deliver stable economic development, industrial peace and combat exploitation of workers.

But it also exposes the growing gulf between the public service and the private sector, especially where low-paid workers are concerned. There is little sign that benchmarking, which resulted in major pay increases, has delivered greater productivity in the public sector.

Among other benefits, most public service workers enjoy generous index-linked pensions whereas the position of those on defined benefit schemes in the private sector is steadily being eroded.

That is a social and political time bomb.