Austerity in Ireland

FOCUS □ AUSTERITY ANDTRADEUNIONRIGHTSINEUROPE Austerity in Ireland I There since attack mechanisms wage a sustained the has on fixing crisis been Irish a sustained attackon Irish wage fixing mechanisms since the crisis DR. PETER RIGNEY IsIndustrial Officer wtth the Irish Congress off Trade Unions In Dublin Ireland Europe turies of was for relative many one poverty, of years. the poorest It inequality had endured countries and mass cenin Ireland Europeformanyyears.It had enduredcenturies ofrelative poverty, inequality and mass emigration. On joiningtheEU Ireland'saverage incomewas 63percentoftheEU average.Itrose to 125percentand is stillhigher thantheaverage ,despitethedepthofthecrisis. Irelandhada deep economiccrisisduring the1980s.In 1987, government, unions and employersagreed to worktogether todeveloptheeconomy and society ,inpartnership. Thiswas remarkably successful .Totalemployment inIreland andaveragedisposableincomesdoubledover20yearsandeco nomicgrowth roseby260percent between1987 and 2008.SincetheCrashof2008,each has fallen backtotheapproximately thelevelof2004. Theseverity ofthebanking crisis inIreland, and inparticular àie previous government's hasty and ill-considered decisionto guarantee theliabilities ofallIrish bankstippedtheIrish economy intoa fiscal crisis. The severity ofthatcrisis robbedthe Stateof the resourcesto introduce meaningful measuresof fiscalstimulation. In additionthe severity ofthecrisis meant that theoutgoing government concentrated on fiscalmatters to the exclusion ofallelse. In accordancewith the anti-crisis measures seen since 2008,unemployment in Irelandhas risensteeply.The pattern of increasehas been thesameas thatin Spain,and theweight ofthe increasehas fallenmostparticularly on young workers. Therearenow twoemerging problems on theemployment frontone of youthunemployment and one oflongterm unemployment. The Irishgovernment has introduced fiveanticrisisbudgetssince 2008 whichhave had the effect of severely depressing domesticdemand. Whilethe exporting sectorhas done well, the performance of thissectorcannotbe takenfor granted, giveninternational economicdevelopments . In anyevent, thehistory ofcountries tryingtodeal withfiscalcrisesis thatexports alone willnotsuffice to allowa country torecover. The socialeffects ofthecrisis havebeenmainly witnessedthrough unemployment. However therehave been effects in otherareas of the economy.Irelandhas been theonlycountry in theEU 27 tocutbackon basicminimum income allowances.Evidenceemerging from thesurvey on incomeand livingconditions would indicate the inequality is rising, reversing the progress madeintheprevious decade. Unemployment Irelandwas one ofthefivecountries in theEU wheretherateofunemployment morethandoubledduring thecurrent crisis. Themonthly unemployment figures, knownas theliveregister, providean imperfect measureofunemployment as, forexampleit includesworkers on shorttime. However itprovides monthly up todatedata,and is a reliable indicator oftrends. TheJanuary 2012 editionshowsthatduring 2011thestandardised unemployment rateaveraged14.2percent for the yearcompared to 137 percent for2010. Youngpeopleunder25yearsofage havebeen badlyhitbytherecession. Youthunemployment has trebledsince2008 with1 in 3 youngmen under25 beingout of work.The scale of the problem is maskedbya bigincrease innumbers re-entering orstaying ineducation and thenumbersemigrating . Thisis showninthemostrecent liveregister figures whichshowthenumbers of personsagedunder25 on theliveregister falling to 17.1percent inDecember2011from 19.9percenttwoyearsearlier . However, thenumbers of young peopleunder25emigrating increased from 15,600in 2004to 30,000in 2009.Sectors suchas construction, retailand serviceswhere young peoplewereheavily employed shedthousands of jobs. Between Q1 2008 and Q3 2009 youth employment in construction and manufacturing slumpedby63.6percent and47.4percent. Migration Thedecadebefore theeconomiccrashwas characterised by highlevelsof immigration. In four yearstheIrishlabourmarket tookon a diversity that ittooktheGerman labourmarket forty years to achieve. According to the2006 census,7.4 percent of thepopulation ofIreland werenonIrishEU citizens .Notsurprisingly, 40 percent werefrom the UK. However,almostthe same proportion about 100,000people were citizensof Poland, Lithuania and Latvia, mostofwhomhad migrated since2004.Whilesome ofthesepeople left Irelandsince2008,manydidnot.Theseworkers were moreexposed to rising unemployment as theytendedto be employedin sectorsof the economywhichhave been particularly hardhit suchas construction, salesandpersonal services. A morerecent characteristic oftheIrish economyhas been the resumption of emigration of Irishpeople.The destination ofthesemigrants is mainly theUK,butsignificant numbers go alsoto Canada and Australia, the commonlanguage apparently exerting a stronger pullthancommon EU citizenship. Wages and wage fixingmechanisms Whiletherehas been a sustained attack on Irish wagefixing mechanisms sincethecrisis, theseeds oftheseattacks canbe found inthesuccessofthe NationalEmployment Rights Agencyreferred to above.Thisbodycommenced workin 2007and exposed a wide range of malpractices mainly among small non-unionemployerswho had INTERNATIONAL union rights Page 10Volume 19Issue 22012 becomeaccustomed tooperating undertheradar. The effectiveness of the new body provokeda backlash from thesesmallnon-unionised employers , outsidethe establishedemployerbodies. Theseemployers succeededinbuilding a coalition ofsupport mainly amongconservative rural backbenchmembers ofparliament ofthethengoverningparty . In addition theymounted a seriesof legalchallenges against thewagefixing machinery. Thisresulted ina decision bytheoutgoing government to cuttheminimum wage fornewhires by12.5percent from €8.65perhourto€7.65per hour,forthosecommencing new contracts from February2011. In fact many unscrupulous employers tried toillegally cutthewagesofexistingemployeeson the minimum wage. A large Dublinhotelchainsought to cutthewagesofits existing workforce, in defianceof thelaw. Staff werecalledin and toldthat'inorderto support thegovernment' they hadtosigna newcontract. Fivewomenfrom Lithuania andPolandrefused to sign, gotincontact withtheir unionandwenton strike. Thisbecamea signature strike fortheIrish trade unionmovement - andone whichwas cost effective given that...

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