4 November 1999 Edition
The value of work
BY ROBBIE MacGABHANN
Wages, salaries, pay - call it what you will, it is the one economic issue that is defining the late 1990s. In a European society driven by the ideology of free markets and systematic cutting of public services, your take home wage is the true gauge of your value to society and its rewards to you.
With more people paying for housing, education and healthcare the amount of punts or euros in your pocket has become for many the sole measure of what they get out of society.
In Ireland we have seen concerns about pay arise in a range of arenas. The first and most obvious one is the growing unrest in the public sector, where jobs are deemed socially necessary but are not valued monetarily. The nurses' strike was an example of where this problem can end up.
Minimum Wage
Throughout the 26-County workforce we see growing opposition to a new round of social partnership. In both the Six and 26 Counties, there is the ongoing issue of when will governments implement a biting minimum wage.
This week in Europe, the European parliament is seeking to make an input into discussing the 48-hour working week directives which in Ireland do not apply to a whole range of workers, including junior doctors, who regularly put in working weeks of 70 hours plus.
Another aspect of the wage issue is the remuneration enjoyed by the executives who run the companies most of us actually work for. Last week in An Phoblacht, we reported on the huge percentage growth in profits and professional earnings in the period 1988 to 1998, which covers three partnership agreements. It is clear from the Central Bank figures that profits are growing at a much faster rate than workers' wages.
Executive earnings
This then is an obvious inequality in Irish wage structures that nobody in government over the last ten years seems willing to redress. Even information about the true earnings of Irish executives is difficult to find.
Enterprise and Employment minister Mary Harney has been involved in an ongoing attempt to force more disclosure from the Dublin Stock Exchange on what the executives of companies quoted on the exchange actually earn. The Institute of Directors (IoD) has opposed disclosure. IoD president Paddy Galvin has claimed that disclosure would ``serve no purpose and would inevitably be pay inflationary''.
Galvin also argued that the proposals would be inequitable as other professional people in limited partnerships would not have to disclose their salaries. The fact that the wages of the vast majority of workers are public knowledge has escaped Galvin's attention.
Profits Down - Wages Up
Harney has over the past year vocalised concerns about the level of non disclosure of top Irish companies on wages and salaries. Her concern though has not been matched with any real action on the problem.
A survey published last week in Britain highlights the true extent of the problem of bosses' wages. The annual report from Incomes Data Services (IDS), an independent pay research body, showed that executive pay is rising by more than four times the national average in Britain.
The report also found ``little relation'' between the wages paid to chief executives and the profitability of the companies they actually run. This explodes the often quoted mantra that top executives are being paid the market rate and are earning their salaries by making their company more profitable.
The IDS report also found that even annual bonus payments were awarded with only a weak relation to the pre-tax profit of the company. As well as this only nine of the 334 companies surveyed had actually provided the level of disclosure sought by the British government.
Tax Cuts
One wonders how many Irish companies fall into the same category as those highlighted in the IDS report last week. It would be an extremely naïve commentator who believes that similar levels of inequity would not happen here.
The last wage issue that is causing concern and will over the next month become a greater talking point is the level of income tax being levied on Irish workers.
Earlier this week, Mary Harney rejected a pre-budget submission from the Irish Farmers Association that proposed an income tax of 12.5% for farmers. This couldn't happen, according to Harney, because of the need for tax equity across the employment spectrum.
However, figures from the Revenue Commissioners have shown that the top earners in Irish society pay considerably less income tax than the average PAYE worker.
This is achieved by a range of tax incentive schemes where income can be invested to legitimately avoid tax. Thousands of middle income earners can take advantage of tax write offs on health insurance, and on their mortgages and pension contributions.
If Mary Harney is really interested in tax equity, surely she should be lobbying Finance Minister Charlie McCreevy to work on a budget that would take all the perks and tax avoidance schemes out of the tax code. That would be the starting point towards real wage equity.
At the same time, she and her coalition partners should act on the minimum wage issue and on revealing corporate wages. Then maybe, real negotiations on a just social partnership could be considered.
INOU
The latest edition of Working For Work, the Irish National Organisation of the Unemployed (INOU) annual handbook, has just been published. Now in its sixth edition, the annual welfare guide offers excellent advice on social welfare payments, medical card applications and social welfare appeals.
The guide also provides information on how to access state employment services and on how a move from welfare to work will affect your entitlements to secondary benefits such as medical cards, rent allowances, family income supplements etc.
The INOU believes that the guidebook is about ``empowering you to claim what is rightfully yours and helping you to use state services more effectively''.
If you want to get a copy of the guide, it can be ordered by phoning the INOU at (01) 8560088. The guide is free, the only charge being costs of postage.
More layoffs at Fruit of the Loom
The ongoing decline of Fruit of the Loom's Irish operations took another lurch forward this week with the announcement that another 190 jobs are to go at its only remaining plant in Buncrana, Donegal.
These cuts bring to 1,023 the number of jobs lost at Fruit of the Loom over the past 12 months.
SIPTU's Donegal branch secretary Sean Reilly, reacting to the job cuts, said that the county is facing a jobs crisis. Unemployment in Donegal was he said at 20% three times the national average.
Privatisation jobs threat
As the Dublin government steams ahead with its privatisation programme, the costs to workers of such quick sell offs are being illustrated well in Britain this week.
The vast profits racked up by recently privatised utilities in Britain has been well publicised. The water industry in particular has come in for deserved criticism, as the newly privatised companies increased charges to customers, racking up huge profits while steadfastly refusing to either properly maintain existing supplies or plan for future increased demand. The response of the water regulator in Britain, Ofwat, is to demand that bills to customers are cut by 15% on average.
The response of the water companies to this demand is a threat to cut the numbers of workers employed in the industry by up to 9,000 jobs or 25% of the total workforce. Don't think that it couldn't happen here.
Wages, salaries, pay - call it what you will, it is the one economic issue that is defining the late 1990s. In a European society driven by the ideology of free markets and systematic cutting of public services, your take home wage is the true gauge of your value to society and its rewards to you.
With more people paying for housing, education and healthcare the amount of punts or euros in your pocket has become for many the sole measure of what they get out of society.
In Ireland we have seen concerns about pay arise in a range of arenas. The first and most obvious one is the growing unrest in the public sector, where jobs are deemed socially necessary but are not valued monetarily. The nurses' strike was an example of where this problem can end up.
Minimum Wage
Throughout the 26-County workforce we see growing opposition to a new round of social partnership. In both the Six and 26 Counties, there is the ongoing issue of when will governments implement a biting minimum wage.
This week in Europe, the European parliament is seeking to make an input into discussing the 48-hour working week directives which in Ireland do not apply to a whole range of workers, including junior doctors, who regularly put in working weeks of 70 hours plus.
Another aspect of the wage issue is the remuneration enjoyed by the executives who run the companies most of us actually work for. Last week in An Phoblacht, we reported on the huge percentage growth in profits and professional earnings in the period 1988 to 1998, which covers three partnership agreements. It is clear from the Central Bank figures that profits are growing at a much faster rate than workers' wages.
Executive earnings
This then is an obvious inequality in Irish wage structures that nobody in government over the last ten years seems willing to redress. Even information about the true earnings of Irish executives is difficult to find.
Enterprise and Employment minister Mary Harney has been involved in an ongoing attempt to force more disclosure from the Dublin Stock Exchange on what the executives of companies quoted on the exchange actually earn. The Institute of Directors (IoD) has opposed disclosure. IoD president Paddy Galvin has claimed that disclosure would ``serve no purpose and would inevitably be pay inflationary''.
Galvin also argued that the proposals would be inequitable as other professional people in limited partnerships would not have to disclose their salaries. The fact that the wages of the vast majority of workers are public knowledge has escaped Galvin's attention.
Profits Down - Wages Up
Harney has over the past year vocalised concerns about the level of non disclosure of top Irish companies on wages and salaries. Her concern though has not been matched with any real action on the problem.
A survey published last week in Britain highlights the true extent of the problem of bosses' wages. The annual report from Incomes Data Services (IDS), an independent pay research body, showed that executive pay is rising by more than four times the national average in Britain.
The report also found ``little relation'' between the wages paid to chief executives and the profitability of the companies they actually run. This explodes the often quoted mantra that top executives are being paid the market rate and are earning their salaries by making their company more profitable.
The IDS report also found that even annual bonus payments were awarded with only a weak relation to the pre-tax profit of the company. As well as this only nine of the 334 companies surveyed had actually provided the level of disclosure sought by the British government.
Tax Cuts
One wonders how many Irish companies fall into the same category as those highlighted in the IDS report last week. It would be an extremely naïve commentator who believes that similar levels of inequity would not happen here.
The last wage issue that is causing concern and will over the next month become a greater talking point is the level of income tax being levied on Irish workers.
Earlier this week, Mary Harney rejected a pre-budget submission from the Irish Farmers Association that proposed an income tax of 12.5% for farmers. This couldn't happen, according to Harney, because of the need for tax equity across the employment spectrum.
However, figures from the Revenue Commissioners have shown that the top earners in Irish society pay considerably less income tax than the average PAYE worker.
This is achieved by a range of tax incentive schemes where income can be invested to legitimately avoid tax. Thousands of middle income earners can take advantage of tax write offs on health insurance, and on their mortgages and pension contributions.
If Mary Harney is really interested in tax equity, surely she should be lobbying Finance Minister Charlie McCreevy to work on a budget that would take all the perks and tax avoidance schemes out of the tax code. That would be the starting point towards real wage equity.
At the same time, she and her coalition partners should act on the minimum wage issue and on revealing corporate wages. Then maybe, real negotiations on a just social partnership could be considered.
INOU
The latest edition of Working For Work, the Irish National Organisation of the Unemployed (INOU) annual handbook, has just been published. Now in its sixth edition, the annual welfare guide offers excellent advice on social welfare payments, medical card applications and social welfare appeals.
The guide also provides information on how to access state employment services and on how a move from welfare to work will affect your entitlements to secondary benefits such as medical cards, rent allowances, family income supplements etc.
The INOU believes that the guidebook is about ``empowering you to claim what is rightfully yours and helping you to use state services more effectively''.
If you want to get a copy of the guide, it can be ordered by phoning the INOU at (01) 8560088. The guide is free, the only charge being costs of postage.
More layoffs at Fruit of the Loom
The ongoing decline of Fruit of the Loom's Irish operations took another lurch forward this week with the announcement that another 190 jobs are to go at its only remaining plant in Buncrana, Donegal.
These cuts bring to 1,023 the number of jobs lost at Fruit of the Loom over the past 12 months.
SIPTU's Donegal branch secretary Sean Reilly, reacting to the job cuts, said that the county is facing a jobs crisis. Unemployment in Donegal was he said at 20% three times the national average.
Privatisation jobs threat
As the Dublin government steams ahead with its privatisation programme, the costs to workers of such quick sell offs are being illustrated well in Britain this week.
The vast profits racked up by recently privatised utilities in Britain has been well publicised. The water industry in particular has come in for deserved criticism, as the newly privatised companies increased charges to customers, racking up huge profits while steadfastly refusing to either properly maintain existing supplies or plan for future increased demand. The response of the water regulator in Britain, Ofwat, is to demand that bills to customers are cut by 15% on average.
The response of the water companies to this demand is a threat to cut the numbers of workers employed in the industry by up to 9,000 jobs or 25% of the total workforce. Don't think that it couldn't happen here.