Ireland: Workers reject bosses' solutions to crisis

February 28, 2009

Irish unions are threatening to escalate protests against proposals that would result in workers bearing the burden of paying for overcoming the financial crisis that has hammered the Irish economy while protecting business profits.

Both employers and the government have sought to delay previously agreed upon wage increases for workers. The Irish government is also moving to implement a levy on public sector workers to help fund shortfalls in pensions.

On February 21, 150,000 people marched through Dublin as part of an Irish Congress of Trade Unions (ICTU) rally against the government's handling of the economic crisis. The protest was the largest demonstration in the Irish capital for 30 years.

The Irish Times reported that ICTU general secretary David Begg addressed the rally, telling demonstrators that a business elite had destroyed the economy and had not yet been held to account for it in any respect.

According to the Irish Times, ICTU president Patricia McKeown told protesters that the government wanted workers who built the economy to make the sacrifices while it protected those who wrecked it, and that the time had come for Irish workers to demonstrate the power they held.

"That power is today on the streets of Dublin, it is in industrial action but most significantly it is at the ballot box", McKeown said.

"If our government and the elected politicians are not prepared here and now to pledge that they will act now and act on our behalf and act on the proposals we have placed before them then you must be prepared to deny them even a single vote and to send that message out loud and clear."

The Irish economy has been facing growing difficulties since early 2008 as a result of the global financial crisis. The Irish economy grew sharply during the 1990s, with neoliberal economic policies that halved taxation, reduced import duties and encouraged foreign investment.

However, since the start of the global economic crisis the Irish economy has crashed rapidly; there has been a flight of 10 billion euros in capital during February alone and a series of closures and downsizing resulting in the loss of thousands of jobs. According to the Irish government, the country faces:

• a reduction of up to 10% in national income over the 2008-10 period;

• a loss of more than 120,000 jobs over 2009 and 2010;

• an increase in unemployment to over 10%;

• tax revenues in 2008 that were more than 8 billion euros below expectations, with a further fall projected in 2009; and

• without further adjustments, a general government deficit in the range of 11-12% of GDP for each year up to 2013.

Social 'partnership' in crisis

Since 1987, a major characteristic of Irish politics has been the tripartite "social partnership" between the Irish government, employer groups and unions. Social partnerships have been triennial agreements, with the objective of reducing national debt by restraining wage growth, leading to a higher rate of profit growth compared to wage growth.

The most recent social partnership agreement was signed in June 2006 and titled Towards 2016. This agreement had a 10-year framework, but wage-fixing was to be renegotiated in a series of stages.

The second stage of pay terms were agreed to in September, with workers to receive a 6% pay rise over 21 months, following a three-month wage freeze in the private sector and an 11-month freeze in the public sector. Low-income workers receiving less than 11 euros an hour were to receive a 0.5% wage rise.

The agreement also exempted any company that is allegedly unable to afford the pay rises as a result of financial or trading difficulties. Despite this exemption, the Construction Industry Federation (CIF) refused to sign the agreement as it wanted a 12-month pay freeze in construction.

On December 4, the Irish Independent reported that the CIF "will today serve a claim on unions to cut 200,000 workers' wages by 10pc", just a week after it rejected the national pay deal.

In response to the economic crisis, employers, unions and the Irish government began a new round of talks to develop a recovery plan. The intention of employers to make workers bear the brunt of the crisis was made clear by the Irish Business and Employers Confederation's January 23 demand that the previously agreed pay rises be deferred and the increase in the minimum wage be indefinitely delayed.

On January 28, all three sides in the negotiations signed a document that stated: "In developing a Pact, the Government and Social Partners are fully committed to an approach in which all sectors of society contribute in accordance with their ability to do so, and conversely the most vulnerable, low paid, unemployed and social welfare recipients are insulated against the worst effects of recession."

However, on February 3, the Fianna Fail-led coalition government announced plans for an austerity plan that would cut 2 billion euros from the government's budget.

The key features of the plan were a freeze on the wage increases for public sector workers previously agreed to under Towards 2016 and a sliding levy on public sector workers to fund government guaranteed pensions — effectively a wage cut. Even public sector workers who are not eligible for a government pension would be levied.

The attacks from both business and government have caused widespread anger across the Irish working class.

The leaderships of the ICTU and its affiliated unions are attempting to harness this anger and draw business and government into negotiations for a new social partnership — despite Irish workers experiencing a decline in real wages of around 3% per year during the first stage of Towards 2016.

In response to government and business withdrawal from the social partnership, Irish unions began organising protests aimed at lobbying government members of the lower house of Ireland's parliament to oppose the austerity package, culminating in the February 21 mass rally in Dublin.

Trade unions have repeatedly called for the government and business to adopt their new 10-point Social Solidarity Pact, which includes a proposed 48% tax on high earners, full public control of the banks, a three-year moratorium on house repossessions, a national recovery bond, measures to protect the unemployed involving retraining and up-skilling, and income protection.

Unions are planning industrial action in defence of wages and conditions and in support of the Social Solidarity Pact.

On February 24, the ICTU executive council advised the federation's affiliates that where employers were not adhering to the transitional agreement of Towards 2016, they were "entitled to resort to industrial action".

The council advised that "to be prepared for this contingency, it is recommended that unions should ballot members" from March 2, "seeking a mandate for industrial action up to and including strike action, to achieve compliance with the terms of the Transitional Agreement, or to achieve an acceptable alternative".

In addition to action by individual unions, the ICTU is calling a national strike for March 30 in support of the adoption of the Social Solidarity Pact.

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