Unions to seek series of private sector pay hikes
Published 06/01/2014 | 02:30
Unions are preparing plans to lodge a series of pay claims across the private sector.
Workers have endured five years of austerity but Siptu president Jack O'Connor says that the tide has now turned.
ICTU unions are devising a strategy to increase the wages of lower-paid workers in particular, which the unions see as the key to growing the economy.
"Personal consumption represents half of the growth in the economy and the best way to increase purchasing power is to increase wages, which have been stagnant for the past five years," said Mr O'Connor, pictured.
After-tax wages have dropped on average by 6pc since 2008. The money people have to spend at the end of the week has fallen and it is this drop in domestic demand which fuelled the recession, he claimed.
"Increasing wages -- particularly for lower to middle-income earners -- will see those people spending that extra money at the end of the week, which will boost demand and boost the economy," Mr O'Connor told the Irish Independent.
Wages have to be addressed if you are going to sustain a recovery, he said. An increase in investment and available credit will also be necessary if we are to sustain the improvements in the economy identified by the ESRI in its third quarterly economic report, he said.
The unions have already achieved a number of pay rises in the more profitable sectors. Siptu said that where it has negotiated pay rises in pharmaceutical and some manufacturing firms, the rises secured have been 2pc on average.
Retail workers union Mandate has negotiated a number of pay deals in leading retailers including a 3pc increase for Dunnes Stores workers, a 2.5pc rise in Marks & Spencer and 2pc hikes for workers in Tesco, Debenhams, Brown Thomas and Superquinn.
As to employer fears that wage rises could damage the country's competitiveness, Mr O'Connor said that unit labour costs for employers have fallen by about 25pc since 2008 compared with Ireland's main trading partners.
However, public sector workers may have to wait a bit longer for any pay increases. The decision by secondary teachers' union ASTI to back the Haddington Road Agreement means that all public service unions have now signed up to the deal, which runs for another two years. A key part of Haddington Road is a ban on claims for pay rises.
However, Mr O'Connor said the unions would focus on the public sector pension levy introduced in 2009.
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