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13 July 2006 Edition

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Social Partnership: Old model incapable of dealing with current issues

DAVID BEGG

DAVID BEGG

Proposed agreement strikes out in new direction

As trade unionists debate the merits or otherwise of the proposed new Social Partnership agreement for the 26 Counties - Towards 2016, ICTU General Secretary DAVID BEGG, writing for An Phoblacht, argues that it represents progress and a significant departure from partnership agreements over the past 18 years.

The process of deciding on the acceptability or otherwise of the proposed new Social Partnership agreement Towards 2016 is underway. Over the coming weeks 600,000 members will vote individually on the proposals. The process will culminate with a Special ICTU Delegate Conference on 5 September.

Social partnership is an anathema to neo liberals and others who occupy the right of the political spectrum. They see it as an unwarranted intervention in the workings of the free market where ideally wages would be dictated by supply and demand for labour. Paradoxically some on the left also oppose it because they see it as propping up the capitalist system. The mainstream of social democratic trade union opinion supports social partnership in principle as a way to influence both wage formation and the aspects of social policy that impacts upon the quality of life, albeit that people who support the concept in principle have opposed individual deals over the years where they felt the terms were not good enough.

The debate which is now underway in the media about the merits of Towards 2016 is important because this agreement represents a significant departure from what has characterised social partnership for the last 18 years. It is different because it shifts the emphasis firmly in the direction of social policy. It is different in that it has a clear vision of the type of country Ireland should evolve towards over a ten year period and it is different in presenting this vision in an All Ireland context. It is important that union members and the public at large should understand why it was necessary and desirable to strike out in a new direction.

When Social Partnership was embarked upon in Ireland in 1987 the country was in a pathetic state. It was an era of 17% unemployment. Up to 44,000 people were emigrating every year. The public finances were in a shambles and GDP per capita was only about 60% of the EU average.

The primary social policy objective then and in subsequent years was to end unemployment and that has been substantially achieved. Achieving it though required a kind of Faustian bargain in which business was given whatever it wanted in terms of low corporation tax, low employers' PRSI and minimal to non-existent labour market regulation. The purpose was to make conditions so favourable that investment would flow into the country and create jobs. This is exactly what happened. So, if it was a Faustian bargain most people would probably agree that achieving full employment and ending emigration made it worthwhile. Another key ingredient of the bargain was a trade off between modest wage growth and tax reduction.

But that was then and this is now and that particular model of Social Partnership is no longer relevant to our needs as a nation. We have caught up with the rest of Europe economically speaking and outperformed it in many respects. There is no longer an employment dividend to be gained from the old formula.

Where we have not caught up with the rest of Europe is in the area of social provision - proper care of children and old people, health, housing and education - the things that make for a good quality of life. As well as that there is an impending crisis in private sector pensions and our unregulated labour market could not deal with the problems associated with the exploitation of our new immigrant workforce.

We realised that the old model of Social Partnership could not deal with these issues. Neither could the major social policy objectives be achieved in a three-year timeframe. That is why we have an agreement which:

  • Is based on an architecture capable of resolving big social issues of the day progressively over 10 years, while dealing with pay at regular intervals in between;
  • Recognises that social development should be seen as complementary to economic development and not dependent on it;
  • Accepts that employers must pay real wages now and not have them offset by tax cuts which ultimately short-change people in terms of public services, in other words their social wage;
  • Will not allow competitiveness to be achieved at the expense of exploiting people in an unregulated labour market but rather facilitates the creation of a highly productive economy by providing the means and incentives to upskill the workforce.

This latter point is vital. In the context of the Irish Ferries dispute last December 160,000 people voted with their feet to support the trade union stand against exploitation. The subsequent negotiations and the measures agreed to regulate the labour market and achieve good employment standards, and compliance with them, are unprecedented in this part of the world.

It is important to realise too that the formidable achievements in the area of social policy were not at the expense of wages. The 10% increase over 27 months is easily the best in Europe. It will, as far as we can reasonably forecast, exceed inflation and have a bit extra in it to give people some share in Ireland's booming economy.

NEXT WEEK - Eddie Conlon, Former Honorary Secretary of the Teachers' Union of Ireland, on why the proposed new agreement is a bad deal for workers.

An Phoblacht Magazine

AN PHOBLACHT MAGAZINE:

  • The first edition of this new magazine will feature a 10 page special on the life and legacy of our leader Martin McGuinness to mark the first anniversary of his untimely passing.
  • It will include a personal reminiscence by Gerry Adams and contributions from the McGuinness family.
  • There will also be an exclusive interview with our new Uachtar├ín Mary Lou McDonald.

Buy An Phoblacht magazine here

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