Congress calls for pay rises of up to 4.5% next year in private sector

Ireland is a ‘low-pay economy’ says Congress secretary but Ibec warns hike ‘looks too high’

Patricia King, general secretary of Congress

Patricia King, general secretary of Congress

 

The Congress of trade unions has advised unions in the private sector to seek baseline pay increases of between 3.5 and 4.5 per cent in 2020, on the basis that Ireland remains a low-pay economy.

Patricia King, general secretary of Congress, said that “despite the fact that average yearly earnings increased by 4.7 per cent year-on-year in the private sector in Q3 2019, all the indicators demonstrate that Ireland remains a low-pay economy”.

Congress cited CSO data on earnings, which showed median weekly earnings in 2018 stood at €592.60 per week or €30,815 a year.

Workers

In the accommodation and food sector, 68.1 per cent of workers earn below €400 per week, it added.

In addition, some 43.9 per cent of workers in wholesale and retail earn less than €400 per week. The position of female workers is even more stark, with the median weekly wage being €523.25 or €27,209 a year.

Congress added that low pay was “endemic” among young workers.

In response, Danny McCoy, chief executive of employers’ group Ibec, said the increases being sought by Congress “look too high”.

“For the sustainability of jobs, wage growth needs to be in line with productivity growth, which would not justify increase of 3.5 to 4.5 per cent,” he said, adding that productivity growth was running at 2 to 2.5 per cent.

Mr McCoy also noted that certain sectors of the economy needed to be “sensitive to prevailing market conditions”, such as hospitality and retail, which have been impacted by Brexit and a shift to online purchasing respectively.

The Minister for Finance Paschal Donohoe said it was a matter for individual companies in the private sector to decide on pay.

“Wage levels are a matter for companies to set with those who work for the companies,” he said. “The call that Congress has made today for that level of wage increase is something that they will need to engage with companies within which there are members of Congress. That’s a matter for them.

“We have a public service stability agreement that is in place now until next year. And we can deal with the future of public wages as we approach [the end of] that agreement.”

The call for higher pay next year comes against a backdrop of concerns about the Irish economy due to the impact of Brexit, and tariffs being imposed by the United States on goods from both China and the European Union.

Inflation

In addition, inflation is running at a low level. The Central Bank of Ireland recently forecast inflation growing by 1.1 per cent next year in the event of a Brexit deal and by 0.9 per cent in a no-deal scenario.

Congress represents more than 800,000 workers on the island, with 44 unions affiliated to it on both sides of the border.

Congress also said the statutory wage-setting mechanisms currently in place have been “rendered useless” by an effective veto exercised by the employers through non-participation in the Joint Labour Committees system, which is supposed to regulate conditions of employment and set minimum rates of pay for workers in certain sectors.

“Structured collective bargaining is one of the most effective means of eliminating low pay and Government must act to support the functioning of collective bargaining,” it said.