Sunday 22 April 2018

Private sector workers deserve pay rises of 4pc next year, unions insist

Photo: PA
Photo: PA

Anne-Marie Walsh Industry Correspondent

Private sector workers deserve pay rises of 4pc next year as company profits have soared past pre-crisis highs, wages are stagnant and the cost of living is on the increase, according to unions.

A document sent by the union umbrella body to its affiliates says there is “considerable scope for increasing pay” in the private sector.

The Private Sector Committee of the Irish Congress of Trade Unions is advising its affiliate unions to seek pay increases next year that would see an rise in basic pay of at least €1,000 annually, or 4pc, whichever figure is higher.

“Achieving the rate of increase suggested will protect the living standards of workers, increase their spending power and give them a fairer return for increased productivity,” says ICTU's Private Sector Bulletin.

It says while some progress has been made in recouping earnings lost during the financial crisis, data shows that “there is still some considerable ground to be made up.”

It says in the last five years, hourly earnings have been essentially unchanged. In the third quarter of 2011, hourly earnings stood at €21.60. In the same quarter this year, they are €21.55.

The bulletin notes that average weekly earnings have increased marginally over the same period from €688.58 in 2011 to €701.87 this year, an average increase of just 0.4pc a year.

The document notes that Ireland’s wage share is very low as a percentage of GDP, when compared to the UK, the US and the EU.

It says that it is very difficult to forecast inflation, but an assumption of 2pc per year over the next five years is reasonable.

It says the position of private sector companies has been improving over the last five years.

“Increased domestic demand is reflected in higher VAT and excise receipts, while improved profitability is being reflected in higher corporation tax receipts,” it says.

It says the gross operating surplus of companies has been on an upward trajectory since 2009 and passed a pre-crisis high in 2014.

The document notes that early this year the Private Sector Committee advised affiliate unions that pay increases in the range of 2.5pc to 5pc should be sought.

It says that there have been a number of developments in private sector companies and in the economy generally that required it to look at what advice might be appropriate for pay bargaining in 2017.

It said in seeking the 4pc increase, unions should consider the “prevailing circumstances” in the enterprise concerned.

They should also have regard for ICTU’s policy to achieve a wage of €11.50 an hour for every worker.

They should also seek to ensure that workers have reasonable weekly contracted hours, and that these are rostered in a way that gives them some certainty and predictability about their schedule.

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