National pay talks - New accord can secure our economy

WORKERS and businesses who relied on national agreements to regulate pay have been, by and large, well served by the process and we are about to discover if that positive trend can be sustained.

Yesterday’s vote by SIPTU delegates to enter talks on a new agreement suggests that it might.

No one, it seems, has a formula that will satisfy business and unions. Unions argue that under the current 27-month deal workers did not enjoy any real increases.

Inflation, which despite expectations, has accelerated again and has nullified any awards made. So, from a union perspective, there has been a wage pause.

Undoubtedly, employers will not accept that reading of events, arguing that tax cuts made up the difference.

The gap between the sides was emphasised when the country’s second largest union, Unite, announced that it wants increases “substantially above inflation”.

Unite’s ambition is based on figures that show that Irish private sector wages are 25% below the average of the 10 wealthiest nations in the EU. Employers will not feel at all compelled to redress that disparity; they may not even recognise that it exists.

The talks’ opening barrages may have drowned out the weekend warning from the International Monetary Fund, which has said that the world is in “the largest financial shock since the Great Depression”. The IMF puts the chances of a global recession at one in four, and estimates subprime losses at nearly $1 trillion, though far, far bleaker estimates have been advanced.

These are stark admissions and utterly outside the control of anyone in this country. However, they have the potential to change our lives profoundly. Add to that warning the World Bank prediction that rising food prices could push another 100,000,000 people deeper into poverty and the magnitude of the issues becomes even more apparent.

However, any public sense of responsibility and reality that might be fostered by IMF and World Bank warnings are diluted by the tremendous pay deals seen at the top end of our economy.

No matter how businesses — especially in the financial sector — blather on about the market rate for the job, multi-million-pay packets topped off by share options and seven-figure bonuses undermine the suggestion that we are on the verge of a financial meltdown.

Claims “substantially above inflation” have no prospect of being realised but if partnership is to have any real meaning, to play any part in advancing or protecting our society, then concessions will have to be made and workers, especially the lower paid, will have to be able to leave the talks feeling their financial position is relatively secure and that other issues, like agency workers, are being dealt with in a meaningful way.

Employers will need to see that the agreement is viable and that their businesses will enjoy stability.

One of the issues that might play a part in the talks is the great disparity in pension schemes and retirement thresholds between the public and private sector. This scandal will have to be addressed sooner or later.

One way or another there will be an agreement. Let us hope, that like all good deals, all of the participants will be satisfied and the agreement helps secure what its predecessors established: economic security or advancement for all of our society.