The proposed new social partnership agreement is not just a pay deal, but an effort to sustain progress for workers on many different fronts, writes Rosheen Callender
The proposed new social partnership agreement - Sustaining Progress - is not just "a pay deal", as its critics, and most of the media, keep calling it. Of its 123 pages, three deal with private sector pay, two with public sector pay and the rest with a very wide range of social, economic, workplace and industrial relations issues.
The document is just what it says it is - no more and no less. It's an attempt to "sustain progress" on all these fronts, in very uncertain and difficult times.
There's no doubt that substantial progress was made under the PPF. Everyone gained - some more than others, of course; and there was some redistribution - always easier when resources are available. Now, when resources are less so, no one is sure about the extent to which that progress can be sustained, never mind improved upon. And no one involved in the recent talks would claim otherwise.
Anyone who says or believes that the trade union negotiators are making grandiose claims about this agreement is sadly mistaken, because we can't, and we're not. But I, for one, feel strongly that people should seek to understand the basis and content of Sustaining Progress before rushing to judgment.
It took a long time, on this occasion, even to get to the starting-point - of agreeing parameters and an overall framework for any agreement. None of us knows what will happen in the Middle East - but we know it will affect us all profoundly. None of us knows what will happen to equity markets - but we still have to make decisions about pensions, savings, investments and other matters affected by global recession and the state of the stock markets worldwide. None of us knows what will happen to inflation in the next year or so - but we still have to make working assumptions.
Last time, under the PPF, we got the inflation bit wrong, but were able to make corrections mid-way, so that workers did not lose out. This time, we've tried to avoid that sort of difficulty by making only an 18-month agreement on pay.
Will a 7 per cent increase in pay, over 18 months, sustain workers' present living standards by keeping wages ahead of price inflation? None of us has a crystal ball, but looking at the various predictions for this year and trying to weigh up all the relevant factors, I would expect inflation to be a maximum of 5 per cent for 2003 and a maximum of 3 per cent for 2004. That gives an increase of 6.5 per cent, at most, for the 18 months ending mid-2004 (the period of the pay agreement for those who start in January 2003). Other economists are predicting figures below 6 per cent.
People shouldn't be misled by commentators who simply use current inflation figures (which are for the year ending February 2003) and project them forward. Mick O'Reilly did this (Irish Times, February 13th): he assumed inflation would be 6 per cent for the whole of 2003 and 2004 and added these two figures to get 12 per cent, thereby "proving" that the 7 per cent increase (which he must know is for 18 months, not two years) would represent "a real wage decrease of 5 per cent"!
In my view, the 7 per cent increase should at least "sustain", and perhaps marginally improve, most workers' living standards as measured by gross pay. The trouble is, one's real living standards and quality of life are not determined by gross pay alone. So one needs to look at a wide range of other issues and see whether progress on other fronts is also likely to be sustained.
In this context, three parts of the proposed agreement merit particular scrutiny. There are the 10 "special initiatives", some of which are extremely significant (e.g. on housing, migrant workers, carers and child poverty). There are the commitments on "delivering a fair and inclusive society", which in my view are of mixed significance. And there are the "workplace issues", some of which are not just marking time like the pay sections, but actually represent progress. Especially for working women, for groups that are particularly vulnerable or discriminated against, and for lower-paid workers generally.
These groups will benefit greatly from some of the non-pay provisions. Some will benefit from the commitment to build 10,000 affordable housing units. Some may benefit from the social welfare increases, e.g. if they depend on the Family Income Supplement (FIS) to top up their wages, or are about to go out on pension. Some may benefit from the child benefit increases and the promises of affordable childcare for working parents. And if the Government honours its promises to improve maternity, adoptive and parental leave, workplace childcare, lifelong learning and pensions, this will mean a lot to a large number of workers.
Some of the commitments in the chapter on "Delivering a Fair and Inclusive Society" are worthy of note: primarily, the general commitment to reaching National Anti-Poverty Strategy targets and the more specific promise to raise the lowest social welfare payments to €150 per week and the highest (the pension rate) to €200 per week (in 2002 terms) by 2007. Also, widow(er)s' pensions are to be improved and the adult dependant's allowance, now called the QAA, is to be brought up to the full rate, for certain pensioners, giving some couples real income equality at last.
By definition, it's hard to quantify the value of some of these improvements; and of course not all benefit everyone equally and at the same time. It's necessary for everyone to do a few sums of their own: to see what's of direct monetary value to them personally, what's valuable to members of their families and communities and hence, indirectly to them. People also need to make individual assessments as to whether it's important to them, as members of a very unequal society, that their union, at least, is striving to make it fairer and more inclusive.
SIPTU is currently engaged in examining and explaining the fine print of the proposed agreement. Our members are weighing up the pros and cons and will make informed decisions, next month, as to whether its flaws are outweighed by the benefits of ongoing social partnership as a way of "sustaining progress" this year and hopefully "making progress" again next year.
• Rosheen Callender is an economist with SIPTU. She is the union's national equality secretary