As Minister Harris becomes Taoiseach Harris this week, he will have many demands ringing in his ears.
Since January we have had various business groups out on the airwaves lamenting the cost of doing business in Ireland, criticising the government for their modest but necessary labour market reforms, and predicting significant job losses. Regrettably, most of this narrative has been reported by the media as fact with no interrogation of the data behind the rhetoric. For some, it has become an accepted reality.
This has spooked some in government and there seems to be an internal debate as to whether we may even see a row back on some Programme for Government commitments which would be quite astonishing. This would be a huge mistake and a kick in the teeth for low-paid workers who are disproportionately young and female. Something I am sure they would not forget nor forgive.
From the Irish Congress of Trade Unions perspective, we hope the incoming Taoiseach will evolve his policy thinking informed by facts and data rather than rhetoric and fiction. We published a paper last week entitled Challenging Myths and Improving Working Conditions in a Strong Economy to bring balance to the debate.
We have had business representatives cite (without any analysis or interrogation) that we are on the cusp of a crisis with many businesses expected to close. It is interesting that they exclusively focus on labour costs as opposed to the other professional costs such as insurance and legal etc. They believe the solution is to challenge the modest labour market reforms that are in most cases merely bringing us into line with our European peers, such as statutory sick leave, pension auto-enrolment and transitioning to a living wage. They have also stated that these measures have been forced upon them in one go. But the facts contradict this.
Each of the initiatives is phased over several years and in the case of pension auto-enrolment over a decade. We have 2.71 million at work, the highest figure ever, an increase of 3.5%. The two sectors that have witnessed the highest level of business failures in recent times are hospitality and retail. This is no surprise given that the set-up costs for these sectors would not be comparable to manufacturing. Coffee shops open and close all the time. Ironically, these two sectors have been shouting the loudest, while we have seen some closures their employment levels are up 7% since last year (hospitality) and 6% (retail), increasing twice as fast as the whole economy. So as businesses close more are opening.
One of the business groups has even had the brass neck to argue that the National Minimum Wage should be pegged at CPI therefore consigning our lowest paid to never achieve a wage rise more than inflation, unlike the rest of the workforce. Are they really saying that we cannot have a viable hospitality sector unless it is on the back of poverty pay?
I note that one of the stated objectives of the incoming Taoiseach is to make work pay. I could not agree more with him. The labour market must work for workers as well as business. However, the way to do this is not to reduce and narrow our tax base but to promote collective bargaining. It has now become the accepted paradigm across the EU institutions that higher levels of collective bargaining (unions and employers negotiating on pay and conditions of employment) lead to stronger and more sustainable economies for both workers and business. Ireland is obliged to transpose a new EU directive by 15th November this year. The directive obliges the state to “promote collective bargaining,” and to “facilitate the right to exercise collective bargaining,” a right hundreds of thousands of workers in Ireland are currently denied.
To really make work pay Taoiseach Harris needs to oversee the proper and full transposition of this directive. We, our over half a million members and the hundreds of thousands of workers currently denied this right will judge him and his government on this. An obligation in Brussels must not become an aspiration in Dublin.
