Sunday 21 July 2019

Brendan Keenan: War in the workplace is just futile

Whether you're employed in the public or the private sector, the overriding emotion should be fear, not anger

IT was hard to escape the feeling -- perhaps the cynical feeling -- that there was an element of ritual dance about Friday's trade union protest march. A sort of extended conga, if you like.

The trade unions, after all, are getting ready for another round of talks with the Government. Brian Cowen is making soothing noises about pay cuts being only one option, if no other is available. The unions are suggesting that voluntary redundancies are possibly that option. My, have we been here before!

A common view is that the union leaders have to let the rank and file vent their fury with a few protests, or even minor strikes, before getting down to the messy business of compromise. This may well be true so far as it goes, and there certainly seems to be a great deal of fury around.

Fury is not confined to the public sector, though. Everyone is furious with the bankers, regulators and government ministers who allowed this disaster to unfold. More dangerous is the evidence of a certain amount of -- if not fury, then anger -- directed at public sector workers by those in the private sector.

It is impossible to know the extent of this, though it keeps coming up in conversation. More interesting is the reason for it, which can be summarised as: "What have they got to complain about?"

The 7.5 per cent pension levy, which has so exercised government workers, but which leaves their gold-plated pensions untouched, does not seem such an impost to the vast majority of private workers who now have no credible provision for old age at all.

One wonders, though, if workers in both camps may not have sensed something even troubling -- something set out in stark terms in last week's OECD report.

This is that the Irish public sector is not just a victim of the financial bubble and crash which is having to pay inordinately for the solution. It is, rather, that it is part of the problem -- every bit as much as reckless bankers, incompetent regulators and complaisant ministers. They had, as the Americans say, skin in the game.

No bubble, no 50 per cent rise in public spending in five years. No salaries that are among the highest in the OECD (and, when it comes to the upper middle and top ranges, undoubtedly the highest). No stuffing of agencies with thousands of workers with no measurement of what they were actually doing.

Comments like that will no doubt be portrayed as another attack on the public service, and another example of media bias against it. The intention is exactly the opposite; to save the Irish public service from itself and from those who lead it.

The present situation is no more sustainable than paying €400m for empty concrete in an empty part of Dublin docklands. Except that it is more expensive, and has just as much potential to wreck us all as the banks' fetid loan books.

We are, after all, paying a once-off €54bn for the bank loans being transferred to Nama. We will pay the same amount for just this year's current government services. On unchanged policies, it would be €60bn next year.

That is simply too high. It might be theoretically possible to raise annual tax revenues by €20bn over the next three years to cover the deficit, but there would be little economy left. As the OECD points out, even if it could be done, it leaves nothing for the looming sharp rise in pension and healthcare costs as the population ages.

The bubble is deflating as bubbles do. The economy should have grown by around 15 per cent over the past five years, instead of the 25 per cent actually recorded. The 10 per cent difference in national income is now being lost, and a bit more besides.

The economy will end up perhaps 10 per cent bigger than it was in 2004, and even that 5 per cent loss of genuine growth will not come back. This is the true background against which public spending rose by a half.

I confess that I do not know how public spending can be cut severely in money terms. I do know that they need to talk seriously about it, so negotiation is the right idea. It is not only a question of less money, which must combine pay cuts and fewer staff. It is that the public service will have to do better than it does now, with less money and less staff.

Such an extraordinary challenge is not even on the agenda. The agenda is based on the assumption that things will get back to normal when growth resumes, and therefore we talk about how to handle the crisis. I cannot see how this can be the case. The dominant emotion among workers, public or private, and their leaders, should not be anger, but fear.

Sunday Independent

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