The question raised in last week’s blog ‘Are wage increases back on the agenda for 2015?’ got a very emphatic reply from SIPTU President, Jack O’Connor. The leader of the country’s biggest Trade Union has announced a major campaign for pay increases of 5.0% across the economy.
Mr O’Connor has also set his sights on establishing a Minimum Living Wage €11.45 per hour and the abolition of the Universal Social Charge.
Even for a Trade Union leader this is a surprising demand at this time. SIPTU, his own trade union, has been involved in many of the deals that have helped establish the current 2.0% benchmark in the private sector. The Haddington Road Agreement is in place in the public sector to 2016 and the signal from the Government and trade unions is that talks will begin in the summer on a ‘pay restoration’ agenda.
Mr O’Connor’s announcement will make it more difficult for SIPTU negotiators to settle for anything less than 5.0%. The majority of employers will see this demand as completely unrealistic; creating a barrier to reaching balanced agreements in the future.
Against the backdrop of low inflation and falling oil prices this demand will be viewed as sabre-rattling; a crude attempt to raise the bar in future wage negotiations.
With unemployment falling below 10.0% there are some signs that the labour market is tightening, which points to a return to a competitive market with increasing job opportunities. There is strong demand for specialist positions in IT, Accounting and Finance and Engineering. It may well be that employers will have to consider pay increases to attract or retain ‘in-demand’ skills but for 2015 this will be the exception rather the rule.