The new round of national pay talks began today with employers warning that pay growth must moderate "substantially" to restore Ireland's competetiveness and unions insisting that workers must get pay rises above inflation.
Taoiseach-designate Brian Cowen listening to comments from Ictu general secretary David Begg at yesterday’s Ictu conference. Photo: Matt Kavanagh
Employers' group Ibec said employers could not afford to continue to increase pay at twice the rate of other euro area countries.
"With exports to the US and UK affected by currency movements and continuing uncertainty with a slow down in economic growth worldwide, the social partners must show leadership and do what is right for the Irish people," said director general Turlough O'Sullivan.
"This means that pay cannot chase inflation because this will simply make the problem worse."
Unions are expected to seek pay increases in line with prospective inflation levels and productivity growth.
They will also push for compensation for the estimated 1.5 per cent loss in real wages sustained during the current national agreement Towards 2016.
The Irish Congress of Trade Unions claims there will be a net loss for workers under the full period of the current 27-month pay agreement and thus "no improvement in living standards".
But Mr O’Sullivan said wages here were 17 per cent higher than average wages across the euro zone and that they had grown at about double the average over the past five years.
He also noted the recent jump of 18 per cent in the numbers on the Live Register in four months.
“Redundancies in the first quarter of 2008 are already up by 21 per cent and are likely to set a record high of over 30,000 jobs this year – on average about 600 people have been made redundant each week since the start of the year.”
Earlier Minister for Health Mary Harney urged all sides to consider wider implications in the pay negotiations.
“I would hope that all sectors, public sector and private sectors, those that represent employees in both sectors, would be mindful of the overall national interest,” she said.
Fr Sean Healy, director of Cori Justice, said as he went into the talks today that the Government had still failed to deliver on several major commitments made in the Towards 2016agreement.
This included the failure to provide funding for 300 primary care teams in Budget 2008, failure to deliver the National Carers’ Strategy and failure to adequate funding for the mental health strategy, amongst other things.
“We have serious concerns now about the lack of progress being made in delivering key social commitments. It is important to recognise that poverty, inequality and social exclusion are at unacceptable levels in Ireland,” he said.
Taoiseach-designate Brian Cowen told an Ictu conference yesterday that the pursuit of "unsustainable" wage increases that cannot be justified by productivity will have long term costs.
"Having regard to the current economic and budgetary outlook and the need to sustain our competitive position, we must not undermine this position relative to our main trading partners," he said.
Future pay increases should be linked to a number of factors, he argued, noting that productivity growth improvements are forecast to be "significantly lower" than those attained in the second half of the 1990s, and that inflation is expected to be lower in the coming years.
Today's talks began with a review of progress on commitments set out in Towards 2016. The second phase of the meeting centred on setting time-tables and preparatory work for talks on pay and the other issues over the coming weeks.
Taoiseach Bertie Ahern briefed attended the beginning of the talks.