Siptu president Jack O'Connor has blamed a "reign of psychological terror waged on PAYE workers" for undermining consumer confidence and contributing to the current economic downturn, and said a social solidarity pact is the only way forward.
Mr O'Connor was speaking after the publication of a report by Goodbody Stockbrokers, which said the economy would contract by six per cent this year.
He said he was "dismayed" by proposals in the report to cut welfare to reduce public expenditure levels.
Mr O'Connor said that the situation could "escalate dramatically out of control" within weeks unless the Government, employers and other industry leaders accepted there was a need for a Social Solidarity Pact.
"It is appalling that people threatened with unemployment, and in many cases with the loss of their homes and occupational pension entitlements as well, can expect nothing better from the elite of the financial services industry than the suggestion that their meagre social welfare benefit may be reduced; and all this while not one additional cent has been raised from the wealthy in our society," he said.
"At the very least the big players in the financial services industry, which played a key role in creating the global crisis, should have the decency to refrain from commenting and frightening people."
Mr O'Connor said a social solidarity pact was the only way to come through the current crisis.
"It is neither equitable nor financially sustainable to place the entire burden on the PAYE sector, including those joining the ranks of the unemployed," he said.
"Unless the concept of a pact is grasped within the next few days, and certainly at the latest within a few weeks, there is every possibility that the situation will escalate dramatically out of control."