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'For those concerned about the decline in real wages, there is a solution - join a trade union'

Productivity at work is up, but we need to see decent pay rises and career progression for all workers. Trade union membership is the key to this, writes Paul Dillon.

Paul Dillon Financial Services Union

IN MY JOB as a Trade Union Organiser, I often find myself saying “Ireland is different” when talking to colleagues who work for unions elsewhere in Europe.

Comparing Ireland with say France is like comparing apples with oranges.

In France, wages and terms and conditions at work are set down by a collective bargaining model, where workers have a voice on what happens in their jobs. Despite ongoing changes in the law, the vast majority of workers in France are covered by sectoral agreements which set standards for pay and terms and conditions at work.

According to the OCED, collective bargaining arrangements cover 98% of workers in Austria and 96% in Belgium.

Collective bargaining

In Ireland, however, the idea of setting down wages and conditions through collective bargaining is barely discussed. When the labour market is discussed at all, we generally deal with simplistic and often completely misleading debates about the public and private sector.

In reality, we have the weakest trade union recognition laws in Western Europe. Not only do we have very poor legislation for extending collective agreements, the very basis of our laws for even being part of a trade union are weak.

Incredibly, there is no legislation in place to guarantee trade union recognition in the Republic of Ireland. Even the UK, which generally is considered to have a “liberal market” approach to industrial relations, if the majority of workers want to be part of a union, a company must reach a recognition arrangement. But not here.

Legal backdrop

This legal backdrop has led to a situation where unions in Ireland are weaker than they ought to be. Our “voluntarist” approach to industrial relations is often referred to as an “opt in” system.

The problem is some employers are choosing to opt out, even when workers do want to be part of a union, as shown in the ongoing campaigning involving Mandate and Lloyds pharmacies.

We don’t hear near enough about the bread and butter issues of work-how much people are paid, what they should be paid, and how this should be regulated and managed.

Not a high wage nirvana

In truth, Ireland is not the high wage nirvana it is sometimes made out to be. TASC, the think tank for action on social change, estimate that 29% of working women are categorised as “low paid”. Our salaries are behind EU averages, despite occasional claims to the contrary from employer organisations.

In Northern Ireland, the situation is starker still. Invest NI deliberately stakes the claim that salaries in financial services in Northern Ireland are 40% below London and 30% below Dublin.

Even within companies, there are serious divides. Take the gender pay gap in financial services, for example; Morgan McKinley estimates that the pay gap stands at 29% in the sector.

Gap between salaries and rents

The CSO evidence suggests that pay has not kept pace with increases in productivity. Meanwhile, the gap between average house prices and rents and average salaries has exploded exponentially.

House prices in Ireland were remarkably stable until the mid-90s. In 1996, the average second house in Dublin was 3 times annual earnings. By 2016, average second hand house prices were 7.5 time average annual earnings.

Consider the gap that has opened up, and you get sense what has happened to wages in Ireland. Consider also that our childcare costs are the second highest in the OCED and you get a sense of the comparative weakness of workers’ earnings in Ireland.

For those concerned about widening inequality and the decline in real wages, there is a solution – join a trade union. The research shows that unionised workplaces are better paid. Some international studies have estimated the union premium to be has high as ten per cent.

A host of other benefits

Trade union membership has a host of other benefits. For example, trade union members have the capacity to challenge outcomes in the workplace which they deem to be unfair.

Research from the Financial Services Union (FSU) shows that Performance Related Pay (PRP) is often a major cause of frustration at work. With a union at your side, you can challenge PRP outcomes. Without a union, you have no independent voice.

A route to improved terms and conditions

Even in the absence of Government will to protect and uphold standards in the workplace through sectoral agreements that are the norm elsewhere in Europe, there is hope in that trade union membership offers a route to improved pay and terms and condition.

There has recently been an upsurge in activity in previously un-unionised sectors such as Archaeology, English Language teaching and parts of the Film and TV sector which were non-union. The progress made by pilot and cabin crew in Ryanair reflects a very real change-there are now very few “no go areas” for trade unions in Ireland.

The Financial Services union has noticed an upsurge in membership, and now has members in more than 50 companies.

All of this offers cause to believe that change can happen when workers get together and seek a better deal at work. Our relatively poor legal situation for collective bargaining and trade union recognition should change, but trade union membership will still lead to better outcomes at work.

Paul Dillon is an Organiser with the Financial Services Union. He also presents the Office Block podcast. The latest edition of the Podcast, dealing with pay, productivity and performance management is available at https://soundcloud.com/theofficeblock/episode-3-productivity-performance-and-pay-in-the-workplace. See @TheOBtweets and follow Paul at @pauldonaldillon

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Paul Dillon  / Financial Services Union

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