Everything about this agreement, which will deliver the least of all the so-called national agreements to ordinary people, has the sense of buying time, writes Mick O'Reilly
The era of national wage agreements was probably never going to end with a dramatic walkout by trade union officials, by employers or even a No vote at an ICTU special delegates' conference.
It was going to end like it is now - with a cobbled-together, short-term, face-saving programme that no one is too interested in promoting, never mind mounting an "all-hands-to-the-barricades" defence. It was probably going to end, like it is now, in the final exhalation from a mortally wounded ideology.
The analysis is already starting. Will the 7 per cent over 18 months mean a minimalist increase or, more likely, an actual decrease in real wages?
It depends on how much the Government has underestimated inflation. Will the "new" social policy measures protect the living standards of low and average income earners? It's all been trotted out before and didn't work, so why should it now?
Will public sector workers receive their benchmarking awards? It wouldn't be the first time governments reneged on pay deals. Are private sector workers being offered a straightforward pay increase? No, pay increases are intertwined with compulsorily binding arbitration panels: the ultimate pig-in-the-poke wage negotiation.
Everything about this agreement has the sense of buying time. Senior trade unionists know their members will not wear being locked into a multi-year deal that will probably result in a long-term real wage decrease given the high levels of inflation. That's why this deal is running for only 18 months.
A longer deal would have had a mid-term review which, like the last agreement, would have resulted in renegotiation and a possible collapsing of the deal - a tension all parties are anxious to avoid. Therefore, this agreement provides a cover - masking the desperation of senior trade unionists who are now stuck in a cul-de-sac of their own making, hoping that time and some unforeseen circumstances will come to their rescue.
The Government, too, is anxious to buy time. Its long-term policy of low-tax low-spend has run its course. Previously, it could subsidise low wage increases with income tax cuts, but now there are no taxes left to cut unless we abolish them altogether (and in the area of corporate profits and capital we're not that far off).
Then there is the little matter of global economic slowdown, decreasing foreign investment, hyper price hikes in oil as the US wages war to grab more oil. So, this is no time for long-term commitments. Wages may have to be frozen, hospital wards closed, capital and social investment so long-fingered it is not part of the hand any more. Ministers don't want to be locked into an "inflexible" pay agreement.
They, too, want some cover for the next instalment of slash-and-burn public sector cutbacks.
This is how I believe it will play out: in many towns throughout Ireland, householders already pay more than €500 in yearly charges to a private firm to pick up their rubbish.
Our public services, already one of the poorest in the EU, will be further slammed by a combination of hiring freezes, investment cutbacks, privatisation and a proliferation of new charges and levies.
We will experience continuing high prices.
Already, the ESB, RTE, the VHI and CIE have announced substantial price increases with more people desperately trying to spend their dwindling incomes on higher-priced private services (e.g. childcare), thus feeding into further inflation.
We will beg, plead and threaten just to ensure the Government honours the benchmarking pay increases as it attempts to reschedule payments while launching a PR "be-glad-you-even-have-a-job" campaign against public sector workers. And we will only succeed at the price of further hiring freezes and cutbacks.
We will queue up at arbitration panel hearings, listening to employers plead inability to pay due to competitive pressures, the slide in the euro, market uncertainty, war, oil prices etc. Profitable companies will continue to enjoy Cayman Island levels of taxation.
Inflation is currently running at nearly 6 per cent ( a third higher than when the last agreement was approved). Therefore, over the two-year period this represents a real wage decrease of 5 per cent (or 2.5 per cent annually).
Public sector workers will actually experience over a 4 per cent decrease in the first year of the agreement owing to the six-month pay pause.
Regarding the increasing numbers of low-paid workers, the flat-rate increase in previous years had been dropped. Not only will low-paid workers suffer real wage decreases, they will not benefit from the compensating "floor" that was a feature of previous agreements.
There are new features on compulsory binding arbitration introduced, a company's "inability to pay" will no longer be subject to negotiation but rather will be referred to compulsory arbitration.
The issue of what constitutes "normal ongoing change" will further be subject to compulsory arbitration.
This can be used to circumvent "productivity" claims.
On union recognition, there is no commitment to implementing in binding form (compare with compulsory arbitration in the areas of "inability to pay" and "normal ongoing change") the principle of trade union recognition.
Indeed, this is an important selling point for IBEC in persuading its members to accept the deal.
All taken together, this agreement will deliver the least of all the so-called national agreements to ordinary people. In the past workers were sold the pup of low wages in return for tax cuts.
This time there is still low wage increases (totally eroded by inflation) and actual tax increases through massive rises in indirect taxation, meaning an actual reduction in living standards.
The world will not end if this agreement is rejected; in fact it might just be a good thing if trade union leaders were to trust our own membership actually to negotiate real increases and improvements to their living standards.
Mick O'Reilly is the former regional secretary of the ATGWU and is campaigning against the new agreement.