THE country's largest trade union has thrown down the gauntlet to employers by announcing "a major push" for pay increases across the private sector.
Jack O'Connor, president of SIPTU, said the union would now apply itself to the immediate task of "recovering ground which has been temporarily lost over the crisis years as well as defending occupational pension schemes".
"That is why we are engaged in a major push to win pay increases across the private sector," he said.
"We know that there is space to do it without endangering job creation, because unit labour costs have fallen significantly vis-a-vis our major trading partners due to wage stagnation and increased productivity over the last five years."
Speaking at the annual Jim Larkin commemoration in Glasnevin Cemetery, the SIPTU president said that the best way to stimulate domestic demand was to grow consumption and the best way to do this was by "increasing pay and purchasing power".
But the chief executive of ISME, which represents small and medium-sized employers, said that the union's call was premature.
"The signs of growth are there but we are also borrowing €1bn a month, there are close to 400,000 on the live register and the smell of the troika is still around town," said Mark Fielding.
"The unions are too quick out of the traps."
What we need is to get people back to work rather than giving those in work a pay increase, he added.
If there was something to be done, it should be done on take-home pay, where workers here hit the top tax rate after earnings of €32,000, while in Britain workers could earn €183,000 before hitting the top tax rate, said the ISME chief executive.
Mr O'Connor's call comes as there are signs that wages, which have been stagnant over the past five years, are on the increase again.
However, wage hikes have been secured mainly in large multinationals and the more profitable parts of the domestic economy, suggesting a two-speed recovery is under way.
Last year, Mandate, which represents workers in the retail sector, secured a 3pc increase for workers in Dunnes Stores and Argos and a 2pc increase for staff in Boots.
Average increases of 2pc have emerged in the profitable pharmaceutical sector.
In the finance sector, a recent pay survey by international consultants, PwC, said that 59pc of finance leaders expected to increase employees' wages in 2014, as opposed to 38pc last year.