SIPTU Fightback No 9

A newsletter for SIPTU activists seeking a democratic & fighting union

This issue of the newsletter is a special edition produced for the various seminars and shop stewards meetings, being held in SIPTU at this time, on the future of bargaining after Partnership 2000.

Social partnership - Let it die with the Millennium

P2000 wages back of the pack

In the boom of the Celtic Tiger those bound by the pay terms of P2000 are being held back while non-wage incomes, and even wages which are outside or have broken loose from P2000, are moving ahead.

Profits, executive salaries, share values, rents and fees are soaring. Two new millionaires are being made each week. The incomes of workers with scarce skills, of workers in some non-union high-tech multinationals and even of union members with the capacity to bust through the limits of P2000, have waved goodbye to the terms of the deal,

The deal is so unsuited to what could be achieved under free collective bargaining that the 7.25 to 9.25 pay increases negotiated under it bear little relation to what is actually happening in various sectors. We are reaching the stage where only union members who have stuck to the the terms of P2000 are subject to the wage restraint, the 'national norm' of the nominal pay rises under P2000!

The deal is so poor that across private sector industry highly profitable employers are conceding rises over the odds with little or no coercion or concessions from our side. In the public sector computer workers were given 'loyalty' bonuses without even seeking them. In some cases the unions played no part in the introduction of these payments. The market has delivered more than P2000, even in the most disorganised sectors . The lowest rates surveyed by the Dublin Council of Trade Unions have climbed from about £2.50 to about £3.50 an hour in the past eighteen months.

Others had to fight for more, and where they did (nurses, Gardai, health craftworkers, construction electricians) they broke through P2000 no matter what convoluted terminology was put on their increases. (The traindrivers and firefighters are up next.) Officially negotiated trade union rates - those provided by P2000, are becoming an irrelevancy for anyone with market muscle or industrial strength. (Indeed, we appear to be at the sorry pass in which SIPTU is prepared to back members smashing through P2000 where they have power, such as the construction cranedrivers, while consistently frustrating other members with less power, such as the Education members, in their national claim on the HEA for a little over P2000.)

In all matters, terms and conditions and trade union organisation and rights, social partnership and a decade of national Programmes are making the unions weaker, more compliant and less relevant.

New Study shows profits soaring ahead of wages

A study by Kieran Crilly, of the Cork Institute of Technology, found that between 1987 and 1997, total "profits (company profits and profits and professional earnings of the self-employed in the non-agricultural sector) rose by 242.42%: more than twice the rate of growth in GNP and more than 2.3 times faster than (total) wages, which rose by 104.1%.

He concludes that, "this growth in wages was held back by the partnership programmes, which operated as an incomes policy that applied only to wages. There was no restriction on the growth of prices or other incomes" ('Red Banner', Nov. '98. Source: National Accounts ESA 79, CSO June 98).He also found that , "in 1987 wages were 52.2% of GNP. By 1997 the percentage had fallen back to 39.5% of GNP. This fall of a quarter in the share of wages in GNP over a period of ten years is unprecedented in the industrialised world. If the share of wages had been maintained at 52.2% of GNP and GNP had risen by the same amount, then wages in 1997 would be £22,250.8 million, £2,924.5 million higher than their actual level. Essentially this is a direct transfer from workers to employers and the self-employed in the non-agricultural sector".

The 'Irish Times' (1 February '99, p.14) reported that between 1991 and 1997 the share of GDP going to wages, salaries and pensions has fallen by an average of 7.5 per cent a year. The report said that according to IBEC, average industrial earnings rose by 6.8 per cent (i.e. twice the basic wage rise of P2000) in the year to end of June 1998, and CSO figures show that industrial output rose by 14.2 per cent over the same period.

No mandate required?

Public Sector pay talks begin

They are at it again. Trying to break relativity in the public sector. Hysterical claims about public sector pay could sow divisions between public and private sector workers. Yet in the year to June 1998 average industrial earnings rose by 6.4% (IRN 43, 98) while average public sector earnings rose by 4,9% (IRN 4, 99). Relativity is usually targeted to prevent others claiming for gains made by stronger sections. 'Performance' would insulate the new rate. And this time there's an added twist. They want to pay out large sums to skilled workers who could command much more in the private sector. They're happy to pay the market price, but not to have other workers claim more to narrow the gap.

The current discussions have been flagged as a preparation for a successor to P2000. Congress has not yet made a decision to enter talks for another national Programme. Where did it get its mandate to enter these talks? Not from SIPTU. In fact, as we are told when we look for a Special Delegate Conference after talks, the reason why SIPTU has a Special Delegate Conference before talks is that the Branches must agree to hand their mandate to negotiate pay to the national negotiators. When was the Special Delegate Conference? This concerns all SIPTU members. What concerns public sector SIPTU members in particular is , where did the ICTU and SIPTU get its mandate to talk about performance related pay? SIPTU should pull out of these talks right away , and see how the firefighters get on with their relativity claim to catch up on the non-performance related pay rise of the Gardai.

Some Myths of Social Partnership

* Social partnership created the boom

If it did it took its time doing so. Not until well into the second Programme did we begin to hear the Celtic Tiger growl, and then there was a considerable wait for the upturn to translate in to extra employment. Of course social partnership didn't create the boom, except in so far as business will always invest and employ more people if labour is cheaper, and partnership secured that. Several other contenders for the only begetters of the boom would balk at partnership getting the credit. Ray McSharry, C.J. Haughey , Fine Gael's Tallaght Strategy, all have claims to the crown of laurels.

What about a little matter of EU funds? Surely injections of the order of £2.3 billion (cohesion, structural and CAP funds) for 1997 alone had something to do with it. Then there was the massive investment from high-tech multinationals attracted, we are told, by our educated workforce, our bridgehead to Europe, and subsidies so generous that the EU is beginning to raise an eyebrow. The IDA would no doubt want to stake a claim here.

We could point to the cycle of booms and slumps in the market economy that occur, and have occurred, irrespective of whether a national deal is in place at the time. The unions bent the knee as the Irish economy, pruned at workers' expense in the Eighties, was about due for a lift off.

Despite partnership for 'social inclusion' the boom has left large numbers behind. Many of the new jobs are out of their league or, at the other end, not worth taking. The Combat Poverty Agency says that "up to one third of the population (is) at risk of poverty" and that "Ireland has the second highest national level of child poverty in the EU."

* Social partnership has delivered big pay increases

The basic pay increases of P2000 barely keep pace with official inflation (house prices leave them standing) in the middle of the mother of all booms. The current phase is swallowed up by the current annual inflation rate of 1 .5 per cent. We are told that, despite what's written in the deal, average industrial wages went up by 6.8% in the year to last June, that take-home pay under P2000 will rise by 14% (recently upped to 16%) because of tax-wage concessions. Also that the 'public sector pay and pensions bill' has gone up by 104% since 1987. We will gallantly leave aside for the moment the fact that profits, productivity, top salaries, rents, share values, etc., etc., have dwarfed all these figures.

Average wage figures for the economy are neither here nor there. They are calculated from the total wage bill which includes all extra work (overtime, extra effort paid for, skills, etc.) as well as extra pay for basic work. It also includes workers not covered by P2000, many of whom have done better than P2000 and workers tied to P2000 who have simply broken the ties. If union leaders and gurus are telling us that we received, in the boom, real wage rises above the 7-9% rises of P2000, then you may well ask why they negotiated so little when so much was there to be got!

The increases hailed at 14% or 16% include the tax concessions in the Budgets. Is this how we get wage rises? In long-overdue tax concessions? See tax section below.

* Social partnership led to massive job creation

This question overlaps with the one about the boom. Astonishing amounts of net new jobs have been created; for social partnership's part see above. But jobs as such as not an end; they are a crucial and grinding means to a livelihood. We need to ask as well, what are the jobs and who has them ? Congress' entry into the first Programme in 1987 was heralded principally as their response to the jobs crisis. In I999 the Live Register is much the same as it was then. If only half these people were 'genuinely' unemployed Congress' target of 100,000 unemployed by the end of the century, would still not be met.

How many hundred thousand ICTU members who voted for the Programmes to secure their job and promote 'competitiveness' have been made redundant since 1987? We know roughly how many of the new multinational jobs which partnership was meant to attract are non-union. We don' know so well how many of the new jobs in the economy are half-jobs for sectors that were not in the workforce before: for instance, the advent of part time work among secondary students, as young as 15, half of whom are paid £2 an hour or less (ASTI study, 'Irish Times' 23 Feb '99). Neither do we know the true extent of the encroachment of temporary, sub-contracted agency labour, even into factory production. On the other hand the liquidation of thousands of the best and best-unionised jobs in the ESB and Telecomm Eireann has been carried out in joint Reviews and processes, greeted as climaxes of social partnership.

*The era of free collective bargaining was a gloomy one

Its claimed that centralised wage bargaining is the only way and that free collective bargaining (FCB) in the 80s was a time of unremitting loss. Before the first National Wage Agreement (NWA) in 1970 workers were making substantial gains under free collective bargaining (FCB). Between 1960 and 1965 average industrial wages rose by 45% and inflation by 23%. Between 1965 and 1970 wages and inflation rose by 80% and 33% respectively. So in the five years before the NWA, wages were rising by over 2.5 times the rate of inflation.

Between 1970 and 1981 there were eight NWAs and two National Understandings (NUs).In those years wages rose by 1.5 times the inflation rate. However, a high paid worker on £30 in 1970 suffered a 10.4% loss by 1977. In 1981 wages were behind inflation (up 16.7% and 20.4% respectively). Between 1975 and 1980 the average industrial wage for women fell from 79.5% of the male average to 58.8%.

In the years of free collective bargaining between 1982 and 1987 average industrial earning rose by 1.6 times the inflation figures. This despite worsening economic conditions. While unemployment rose from 156,000 in 1982 to 247,300 in 1987, by January 1992 (after four years of partnership) it had risen further to 276,700.

Yes, tax ate into the wage rises in the 80s, but it was during the years of centralised bargaining that tax as a percentage of income, rose from 7% in the 60s to 20% in 1983. Only now, in 1999, can our leaders beam: 'SIPTU got you tax reform at last!'

There are no directly comparable figures for wages between the two eras so average earnings are generally used. This can be misleading because national wage agreements deliver rises to the basic wage, which tend to be lower than average earnings for the same period. Nevertheless average earnings are used in this comparison, first drawn by Eddie Conlon from data in Breen et. al. (1990), Hardiman (1988) and McAleese (1990), in 'Trade Union Fightback', April '92.)

* Social partnership gave the unions more influence

It may have been missed by those who most make this claim, but the very era which gave them access to the corridors of power was the period in which trade unionism was greatly weakened. The onslaught at the workplace is referred to elsewhere; strong shop floor organisation was either 'sorted out' or got blown away with a closure. Solidarity and the strength of the picket declined. Blacking and sympathetic action was in danger of becoming a thing of the past. Important disputes with opponents that should have been easily taken out, like Pat the Baker, ended in crushing defeat for the Union.

Attendance at Branch general meetings went as low as one per cent. Volunteers were scarce for shop stewards positions. Trade union consciousness among young people and the general public became a memory. A n unprecedented expansion of the workforce was accompanied by a decline in the density of trade union membership, especially in the private sector. Massive state-of-the-art multinational factories, whose advent was a chief aim of the 'high skills, high wages' strategists of partnership, remain solidly non-union. In the boom year of 1997 financial membership of SIPTU declined by 88. The Dublin Private Sector Region declined by 4%.

The passing and use of the repressive 1990 Industrial Relations Act, which hog-tied the unions and could have cost SIPTU £1.3 million, blows out of the water any notion that the unions, that trade unionism, acquired any more influence, authority or even respect in this society through social partnership.

The Programmes were only part of the reason and the similar things happened elsewhere. But the labour architects of social partnership would be the first to proclaim their 'new agenda' and their determination to leave the old 'adversarial' ways behind.

*Social partnership delivered tax reform

The wage increases hailed at 14% or 16% include the tax concessions of the '97 and '98 Budgets. These concessions are claimed for P2000 because the deal commits to an end increase of 14% for those on the average industrial wage and receiving the 2% local phase, and because its a conscious 'tax-concessions-for-wage-moderation' strategy.

It must have occurred to all that tax reductions as a means of boosting take-home pay is not a sustainable way of delivering pay increases above inflation while keeping the cost to the boss at virtually zero. If inflation runs at, say, 2% a year in the next ten years, and wages rise in line with that, can anyone seriously suggest a 20% drop in the tax take to deliver s 2% real rise per year? What happens when workers pay no tax at all, and someone needs the fire brigade?

Secondly the tax cuts were given to all, including those to whom the quid pro quo of P2000 did not apply, and the higher the income the higher the percentage gain from the tax measures. Thirdly, we didn't, did we, march the streets in the 70s and 80s for tax reform to have it finally delivered to us in the buoyant 90s in lieu of a real wage rise , and to the non-PAYE sector as an extra they weren't necessarily entitled to, for free, gratis and for nothing in return?!

A Very Special Partnership

Social partnership cannot escape the implications of the unrelenting revelations of corrupt ties between Irish politicians and big business. The founding fathers of the Programmes, Haughey, McSharry, Ray Burke, Albert Reynolds and Bertie Aherne were joined first in negotiations, and then in consensus, with our own architects, in a gala launch of the Programme for National Recovery before the national media.

At the time Haughey and his associates, who preached fiscal rectitude and wielded the axe over social spending, were in a far truer partnership with one set of social partners; Dunnes Stores, Rennicks, James Murphy Structural Steel, Bovail, Allied Irish Banks, Middle Eastern sheiks, US millionaires and property developers. C.J, Haughey, who brought in the Army against the oilworkers; Bertie Aherne, who brought in the 1990 Industrial Relations Act against all workers: these are joined by Garret Fitzgerald and Michael Lowry in a very special relationship with high finance. These guys are not our partners!

What is the alternative to another partnership

Programme or national wage deal?

There is no great mystery about the immediate alternative to another national pact. It is simply trade unionism, as pointed out by former SIPTU President, Eddie Browne himself. At a time when it seemed another Programme to follow the PESP could not be put together, he said, "Union Branches have been advised to prepare claims to be processed through local bargaining" ('Newsline', Dec. '96).

Free collective bargaining, which is precisely what Eddie Browne was talking about, is dismissed by some as a 'free-for-all', giving the impression of a chaotic scramble. Yet free collective bargaining is happening in practice under the nose of P2000. The construction cranedrivers are just the latest strong section to win a direct claim on their employers way beyond what P2000 had to offer (in this case for 50 per cent) .

Free collective bargaining, the ability of shop stewards and Branches to lodge claims and negotiate with employers, need not be anything like 'every man and woman for themselves'. On the contrary it would in itself help to restore that solidarity lost through years of bargaining without the involvement of the members, years of the submissiveness of 'social partnership'.

Joint claims could and should be lodged and fought for by all unions Branches and sections in a workplace. Traditional whole-industry bargaining through shop stewards' negotiating committees should be revived and developed. In the public sector claims can be pursued on a very wide basis. The picketline should be restored to its rightful place of respect.

At the beginning of the '90s 'Trade Unionists and Unemployed Against the Programme' (TUUAP), formulated a 'Fight Back' alternative to the PESP. We can do no better than update this as a 'SIPTU Fightback' alternative to another P2000.

At a local level:

* Substantial wage claims (say 10-15% where the minimum terms of the Programmes have prevailed) with common claims where possible (across unions in workplaces, industry-wide claims, etc.);

* Closures and redundancies must be resisted; no co-operation with 'rationalisation' that costs jobs;

* A 35 hour week to be made a medium-term aim;

* Claims for childcare facilities and arrangements and for decent pension schemes;

* Solidarity with groups of workers in struggle;

* An end to contract and long-term 'temporary' labour and to cheaper rates for new starters;

* No truck with fraudulent local 'partnership' agreements and forums; instead we should build strong shop stewards' committees, including international committees in multinationals, and Section Committees, and press for real influence on the floor and in the company.

*Profit-sharing and ESOPS are no substitute for decent wage rises and real participation.

At a national level, the unions must link up with unemployed and community groups to campaign for a better standard of living, including these demands:

* A National Minimum Wage now of two-thirds the median wage, without exempted categories;

* Mandatory trade union recognition for all trade union members;

* Shift the burden of tax from PAYE workers; restore prior Capital Gains and Corporation tax rates;

* An end to tax amnesties, evasion, and corrupt political ties with big business;

* Repeal of the repressive sections of the 1990 Industrial Relations Act.;

* A crisis building programme of social housing; price freezes on building land and rent control;

* Reverse ward closures and end the waiting lists; spend surpluses on social services and welfare;

* Make equal pay a reality;

* No privatisation of state companies.

In SIPTU we need:

*A recruitment crusade

* Open debate on post-P2000; a Special Delegate Conference to make the recommendation, and equal access to Union literature for the 'no' side, before any vote on a national deal;

* Democracy in the Union; more participation from below and less decisions handed down from above; leaner salaries and expenses at the top;

* The revival and re-empowerment of Section and Branch Committees.

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