Notes on the Front

ICTU is playing some hardball.  Recently, David Begg suggested that inflation could go as high as 6.5 per cent.  He’s probably not far off the mark.  Today’s CSO’s figures show inflation running at 5 per cent – up a half a per cent since last month   Even the European HICP (which excludes mortgages) show us running at 3.9 per cent.  The main culprits are food, petrol, housing and energy.  It will probably get worse with interest rate and energy price increases still coming down the line. 

But what’s more interesting is that ICTU even floated the 6.5 per cent figure.  In the run-up to the last negotiations, ICTU steered well away from its own predictions (or at least making them a public matter for the negotiation), content to buy into the Government’s projections.  And they got hosed.  Now, they’re running with 6.5 per cent.  Since their state position is that pay increases should not only protect workers from current inflationary trends but that it should recoup some of the losses in the current programme where workers took a real pay cut, this sets up some interesting scenarios:

a)  ICTU believe it can get a 6.5 pay increase, or something close to it, from the employers. I have my doubts but one should remain hopeful.

b)  ICTU doesn’t get anywhere near it and tries to sell a deal to members that, on its own terms, would result in a real pay cut. That would set up a massive rejection campaign within member unions.

c)  ICTU realises that it won’t get anywhere near it, revisits its figures, and effectively admits they were wrong, when they try to sell a deal well under that threshold. That doesn’t inspire much confidence.

d)  IICTU is actually trying to get something else: it will take a lower base increase but only with certain conditions such as greater local bargaining, extra productivity-related increases, a flat-rate increase, etc. Members might buy into this – especially in the private sector – because by definition members are in firms and sectors where they employ their industrial strength to get these things. But what happens to the vast majority of unorganised workers? They won’t be able to take advantage of the ‘add-ons’ – unless they join a union.

The real talking point is that ICTU realises the game is up – for now anyway.  That the model of social partnership, based on low wage increases in exchange for tax cuts, is no longer viable given inflation, the Exchequer finances and the low, low tax take that rules out investment in public services and social infrastructure.

If so, then the 6.5 per cent becomes the basis of walking away from the table – or getting someone else to, so that ICTU isn’t blamed for collapsing the talks.  Then we’re into free collective bargaining with no restraints.

Now that would be fun.