Years ago – in the days of social partnership – I remember an industrial correspondent of this newspaper telling me that on one occasion after an amicable arrangement had been reached in the early evening on the latest national pay agreement, all sides sat around Government buildings until the early hours of the following morning before announcing it. They needed to convey the impression to their respective constituencies – the public and private sector workers, their bosses and the rest of us – just how tough the negotiations had been and how close they came to failure.
Apocryphal as this story probably was, it highlights a truth about the public sector strike on Wednesday. Everybody knows that the Government will eventually agree to a public sector pay increase in line with inflation and get some concessions from the public sector to offset the bill. There is no other possible, sustainable outcome.
So why all the theatrics? Both sides have their reasons. Some are about optics; others are more substantial.
The union representatives obviously need to be seen to be earning their dues. From that simple perspective, arriving at predictable agreement after some ritualistic bloodletting in the form of strike – or a couple of strikes – makes sense.
READ MORE
As well as letting public sector workers blow off some understandable steam, it also makes the eventual and ultimately disappointing outcome in some way more valuable because it has been fought for.
The Government also needs to be seen to fight for the taxpayer – although what seems to get lost in these fights is that public sector workers pay tax. Some of them pay quite a lot of tax.
In much the same way as the unions need to be seen to have fought for every fraction of a percentage point of an increase, the Minister for Public Expenditure and Reform Jack Chambers needs to be seen to have shown a willingness to die in the ditch for the exchequer.
But if it was just about optics, you would expect this biennial process to evolve into some sort of ritualised combat akin to the World Wrestling Federation’s WrestleMania. We know it’s pretence but enjoy it anyway. To a certain extent, this is what happened between 1987 and 2010 under eight successive social partnership agreements, including the one referred to above.
The model broke down in the aftermath of the 2008 financial crash when the cuts sought by the government were too big for the unions to wear and ended up being imposed unilaterally.
An interesting question is why the unions have not tried to put social partnership back together again and have instead adopted a much more antagonistic approach that has brought us to this strike. Rather than enter negotiations without precondition – social partnership style- they have demanded the Government first agree the pay element before then moving on to terms and conditions.
This is where the game theory wonks come in. There is plenty of research to suggest unions can have the upper hand in antagonistic negotiations of this sort in certain circumstances.
These include a tight labour market where the Government finds it hard to recruit and retain employees. There also has to be a credible threat of industrial action and significant consequences for the Government from the resulting disruption, such as damage to its fiscal credibility with electoral consequences.
The final ingredient is significant public support for public sector workers, such as nurses, teachers etc.
It all sounds very familiar. It also explains why the unions are trying to split the talks into two. They want to use their pretty significant leverage where it matters most – pay increases – rather than fritter it away fighting over tea breaks and the like.
The Government can of course see them coming and will not fall into the trap. Not yet at least.
It has given an indirect indication of what is on the table by including a figure for the impact of public pay increases next year in the budget that has just been passed. It can be seen as a reasonable opening bid and has already been upped with the indication that more is available from a €1.6 billion contingency fund.
This reflects the interest of the Government to avoid the strike. But the unions seem confident enough in the strength of their hand to stick to their maximalist position.
Much will now hinge on the blame game that will follow the 24-hour strike and any subsequent ones should they materialise.
Eventually public support or sympathy for the strikers will run out. The disruption of 150,000 medical appointments will erode it. As will the headaches involved in organising someone to look after your children. Both sides know this. They just don’t know when it will happen.
At some point the deal will be done and it will not be very different from the one that could be hammered out this morning. Social partnership for slow learners.
