10 December 1998 Edition
A carrot in one hand and a stick in another
IBEC's strategy for power in Ireland
It is to some extent using a bit of stick with the carrot as it were and I think that is right.
The Irish Business and Employers Confederation (IBEC) is a very active lobby group on behalf of Irish business. They are actively opposing the introduction of a minimum wage, want further cuts in corporation tax, oppose workers wage increases because they are inflationary but do not apply the same rule to executive salaries. They also support forcing unemployed people into make work schemes.
Last month IBEC released a paper outlining their ideas for how full employment could be achieved. Brian Geoghegan is a director of IBEC and spoke to An Phoblacht about these and a range of other worker related issues.
An Phoblacht: IBEC's new paper is titled Towards Full Employment. Does IBEC really believe this is possible?
Brian Geoghegan: It is fairly clear that full employment is possible in a few short years. From a business point of view I think that it can be seen as being a very positive aspiration in the sense that at present the shortage of labour is a hindrance to growth and expansion.
AP: Who is to blame for the skills shortage?
BG: It's hard to place blame. We could say we should have anticipated the extraordinary dynamic in the economy by focusing training and education efforts more effectively over the years. Virtually every forecaster has been surprised about the growth in the Irish economy.
There is an element of profiteering on the housing front
AP: Your paper calls on the Government to extend the Employment Action Plan. Is there not a question mark in your mind on the quality of training they might be getting?
BG: There is that. We need to look at what we are saying at a number of different levels. We see that encouraging unemployed people to take up reasonable offers or jobs or training as being a very effective way of capitalising on the buoyant labour market. It is to some extent using a bit of stick with the carrot as it were and I think that is right.
In many courses and programmes there is a degree of complacency. There are many good schemes which provide a basis for bringing unemployed people into the labour market. There are others which are not very effective.
Part of what we are saying is that we are spending huge resources on labour market programmes and there must be question marks about how that is being spent.
AP: Republicans support the demand for a minimum wage. Why is IBEC opposed to these proposals?
BG: We believe with a lot of justification that the last thing we need in this country is the introduction of additional rigidities in the labour market. Already in some areas where the minimum wage would have been an issue, difficulty in recruiting is pushing the price of unskilled labour up at the lower levels. We believe the market will deal with much of this and a statutory across the board crude national minimum wage is not the way to deal with it.
We accept and acknowledge that there is exploitation of people in some areas. We hold no brief for that. We do not in any way condone it.
AP: £4.40 an hour does not seem like an awful lot of money?
BG: The problem with it is that it is still above the economic level in some areas. We are seeing a fair degree of inflation in wages at the lower skilled areas. How will a minimum wage be reviewed, be adjusted and how does it fit into the overall wage bargaining process in Ireland?
AP: Why are IBEC opposed to works councils?
BG: For the same reason, the way in which these are being imposed are being prescriptive. It's likely to lead to unduly confrontational positions in the workplace. We are very positively disposed towards communication between employers and employees at plant level.
AP: Is it really that dangerous a precedent?
BG: For Ireland the danger is that all of this will tend to be seen and balanced in investment decisions by companies coming in here that might not have the kind of philosophy that would sit well with the European approach.
We accept and acknowledge that there is exploitation of people in some areas. We hold no brief for that. We do not in any way condone it
AP: You have mentioned wage inflation a number of times. You never hear IBEC talking of wage inflation with regard to executive salaries.
BG: Lots of people in executive positions are on a performance basis and it's quite clear that if you are on that basis your security of tenure is related to that performance. That is a fact of life.
In many case companies are obliged to go into the market to get the kind of quality they need and have to pay accordingly. Across the corporate sector in Ireland things are not quite as rosy as you might think.
AP: How would you gauge the state of industrial relations in Ireland, good or bad?
BG: It has been very good, very stable for the past number of years. We are now entering a phase of turbulence. There is a danger in some of the commentary around what is happening, very negative comments that workers have got very little out of the growth of the economy. We have seen 200,000 jobs created in four years.
AP: How many of them will be able to afford their own home?
BG: That is another issue. I think the solution relates to supply. Nobody had forecast such an expansion in the economy. I think what we need to urgently as a top priority is to significantly increase the supply of housing. There is an element of profiteering on the housing front.
AP: What is IBEC's attitude to the 1990 industrial relations Act.
BG: The act is working broadly. Broadly speaking we are happy enough. There are elements we are not so happy with.
AP: But workers have been imprisoned.
BG: Well how many workers have ended up in prison. I think there was a publicity element in that. The industrial relations scene is the envy of other countries. I would hope that everyone will acknowledge that and build on it rather than go back into the trenches.