Time for the government to block its ears to the Union sirens?

It’s hard to work out what’s happening to the Unions these days. When I first started work thirty years ago, there were two unions in the NIE: the bolshie one that by reputation was quick to call people out on strike, and the one that always agreed with the bosses but were good at fighting individual cases. Since leaving for college as a mature student I’ve not worked in a unionised sector since. In ideal terms they should be looking after the interests of their members in the broadest sense. But the threat of further industrial action if the Irish government imposes as 5%, 6% or even 7% public pay cut looks like a man sawing off the branch of the tree upon which he sits.

For Gerard, we are getting close to the island of the sirens… Time for Ulysses to climb the mast and stuff wax in his ears? He quotes David Eagleman:

…the present holds more sway than the future. Recently, researchers used brain imaging to monitor people making money-now-or-more-later decisions, and they discovered that the neural networks involved in short- and long-term decision-making are fundamentally separate. In situations of choice, the two systems are often locked in battle against one another.

… People manage the influence of the short-term systems by proactively binding their future options. We see this when a person in good health signs an advance medical directive to pull the plug in the event of a coma, when an alcoholic rids the house of drink to avoid future temptation, or when a person socks money into a Christmas account to keep himself from spending it before December.
Such deals with oneself are what philosophers call Ulysses contracts, after the hero who decided in advance to lash himself to a mast to resist the sirens’ song.

This lengthening the shadow of the future is something that is common to left and the right. And even in the unions there are a few chinks of light… But the heavy anti intellectualism that currently has some union leaders in its grip is not helping the country negotiate a clear path into the future…

Nor is it serving the unions (so long a part of the disastrously pro cyclical plans of the establishment through the social partnership) well in their attempt to remain relevant in an era when disintermediation is trashing the predictable career path with which many of my own (now aging) generation became so comfortable.

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  • GGN

    “Since leaving for college as a mature student I’ve not worked in a unionised sector since”

    Is that ideological or just a matter of fact?

    Do you consider yourself a journalist? – and if so would you not consider affliation with a journalist’s union.

    I have never been in a union (apart from the Student’s Union) for a variety of reasons, soem ideological but mostly practical.

  • Mack

    Mick –

    The Unions put forward an alternative approach – that of Keynesian stimulus (ignoring that Keynes also called for a competitive devaluation).

    The government has informed the markets, the EU etc. that they were going to make €4bn worth of budgetary cuts this year, to get borrowing under control. They were supported in this by FG and Labour and opposed by SF who supported the public position of the Unions.

    Not to deliver on that promise would cause a severe loss of credibility on the international markets for the government. The cost of borrowing would rise and more money would be spent on interest payments.

    By agreeing in principle to cuts, and disagreeing only over how they are implemented, the Unions backed the governments position. It is the position of the majority in this state. I can not see what justification there can be for industrial unrest. They want to hold the rest of us to ransom for a principle they have conceded? One that has minuscule electoral support?

  • eamonn mccann

    What do you call a union official who refuses to urge his-her members to take a hit for capitalism?

    Anti-intellectual.

  • I see Eamonn has beaten me to one of the points I wanted to make, which is that Mick is mispresenting what O’Connor is saying. He basically said that the ESRI provided intellectual cover for right-wing politics. That is a long way away from anti-intellectualism. In fact, one of the things that drives the right-wing press, and especially the Sindo, up the wall about O’Connor is that he is engaging with the left far beyond the unions and the Labour Party, and lending his weight to efforts by other parties and organisations to provide ideological and economic counter-blasts to those emerging from the neo-liberals who got us into this mess in the first place. And more power to him for doing so.

    Mack,

    You can’t see what justification there is for industrial unrest? The Dublin government facilitated the property speculators and the rest of those who were benefitting from the bubble by effectively turning the state over to them. At the same time, they effectively secured acquiescence to this surrending of the commonwealth to the interests of a minority as seen, for example, in the under-investment in the health service, by doing deals with the public sector unions. When the house of cards came crashing down, the workers are being asked to carry the can, while those who made the most money are given government aid on an unprecedented scale. We are seeing a scandal much worse than Haughey handing people tickets for the boat while wearing £16,000 pound shirts from Paris. If not in these circumstances, when might you think that it is justified?

    Mick,

    Didn’t you say on the thread on the Tories that you worked in schools. Isn’t that a unionised sector, even if you weren’t in a union?

  • “Not to deliver on that promise would cause a severe loss of credibility on the international markets for the government.”

    Mack

    You mean the very same ‘international markets’ which cheered the bankers on? Come on when will you folk get real, the markets are not some all knowing independent minded giant brain, but a bunch of gamblers looking for the main chance and that is what influences the markets.

    Far from those who work in ‘the markets’ knowing what is best for the Irish people, they centre on what is best for themselves, as this economic crises has shown only to clear.

    Indeed since the feeble politicians of Ireland and the UK have finally admitted the Banks are far to important to be allowed to fail, it is imperative they are nationalized without delay. (perhaps 51/49 percent)

    Mick F

    The trade unions are doing there job, attempting to defend the living standards of their members. Knock, knock, that is why people join trade unions, not to have there leaders, without drawing a breath, oversee upwards of 6% wage cuts.

    I find your accusation insulting that 30 years ago left wing trade union negotiators did not put the best interest of their members first. As to to is your talk of them being strike happy, life simply was not like that. It is almost impossible to lead a group of workers out the gate unless they have a justifiable grievance.

    Believe it or not, trade union members are well able to think for themselves.

    The major difference between left trade unionists and those on the right was we were prepared to go that extra mile and if necessary lead members out the gate. Having said that I new/know many trade union officials who were not on the left who were equal to there task, if push came to shove. Joe Gormley was a good example of this. Any trade union leader, whether local or national who did not view strike action as the last step, would not remain in their post for long.

    Your piece is yet another attempt to re-write history by portraying trade unionists as automatim’s led by dinosaurs. At a time when many economists are finally admitting the trade unions were correct to oppose Thatcher, when she deliberately destroyed much of Ireland and the UK’s industrial base, your contempt for all who oppose the ‘common sense’ of the day over how to move out of recession, places you once again in the same camp of those who placed us were we are economically.

  • Mack

    Garibaldy –

    I actually agree with most of that analysis. But tell me – industrial unrest helps how?

  • Mack

    Mick Hall –

    Ireland, the state, is reliant on borrowing money at this stage, we were not reliant on state borrowing (bond issuance) during the credit bubble phase. The Irish banks borrowed from European banks on the European wholesale markets.

    If bond purchasers demand more interest for holding Irish bonds, then more of our tax take and government spending will go on paying interest on those bonds and the fiscal crises will deepen.

  • Mack

    Engaging with the far left –

    http://dublinopinion.com/wp-content/uploads/2009/12/cpoi.jpg

    Bear in mind that the average wage in the public sector is around €51,000 or £46,000.

    The last decade has seen the average industrial wage in Ireland more than double.

    We’ve seen a huge increase in the numbers employed (around 1 million extra workers)

    We’ve seen the creation of a progressive income tax structure under which the lowest 40% of earners pay no tax (projected to be 50% of earners next year if the tax bands aren’t compressed).

    There was credit bubble, that inflated wages in some sectors (construction, banking and the public sector).

    The handling of both the bubble as it grew and the banking crises (NAMA) was dire. But that doesn’t mean that wages in certain sectors didn’t become unsustainably high.

    What possible basis can there be for well paid workers (48% higher than the average industrial wage) with safe jobs plunging the country into industrial and perhaps civil unrest?

  • igor

    The problem with the wage cuts vs no wage cuts argument is that its a sham argument. In the current state of Ireland workers face a choice.

    1 wage cut

    2 no wage cut but no job

    3 no wage cut but much higher taxes to pay for the no wage cut

    4 no wage cut but inflation which destroys the value of your wage and all the rest of the cash you own

    5 no wage cut but devaluation of the currency (which may be worse)

    6 perm any 3 from the 5 above

    It really is a zero sum game. Capitalism or Socialism doesn’t rule – economics does. We cannot pay ourselves more than we earn

  • Mack,

    I think that industrial action – up to and including strikes – at this juncture is about expressing discontent with the government handling of the crisis, and about influencing government policy on how the crisis will be handled in future as much as it is about the immediate goals of protecting jobs, pay and conditions in the short term. In that sense, it helps a great deal if it limits the ability of the government to slash and burn public services while shoring up speculators and bankers and their other friends with whom they have been in a corrupt relationship for decades. You’re more sanguine about the safety of public sector jobs than I am.

    Here are some figures on public sector pay from February this year which shed some light on the realities of public sector pay.

    Brian Lenhinan: “Information is not readily available in the precise format sought by the Deputy. However, the following table provides estimates of the numbers of public servants in various salary bands of €5,000. The recently announced public service pension related deduction will apply to all earnings, not just salary, and will also include employees of the local authorities who are not included within the public service pay and pensions bill and are not included in the following figures. The numbers at different salary bands vary from time to time depending on matters such as incremental salary movement, retirements etc. Furthermore, in the case of some groups additional earnings may arise from overtime, allowances and premium payments.

    Salary Range Est. Nos in range

    up to 25,000 22,000
    25,000-30,000 33,000
    30,000-35,000 38,000
    35,000-40,000 36,000
    40,000-45,000 33,000
    45,000-50,000 36,000
    50,000-55,000 30,000
    55,000-60,000 27,000
    60,000-65,000 9,000
    65,000-70,000 5,000
    70,000-75,000 3,000
    75,000-80,000 6,000
    80,000-85,000 4,000
    85,000-90,000 3,000
    90,000-95,000 3,000
    95,000-100,000 3,000
    greater than 100,000 9,000
    Total 300,000”

    The email in which I received these figures notes that:
    From the above figures it is clear that there were 129,000 public servants earning less than €40,000 per annum and only 15,000 earning more than €90,000. These are of course gross figures. As well as normal tax ,public servants are also subject to a 7% pension levy whether or not they will be in a position to benefit from that pension.

  • Garibaldy –

    I actually agree with most of that analysis. But tell me – industrial unrest helps how?

    Posted by Mack on Dec 07, 2009 @ 01:22 PM

    Mack

    Perhaps you would be better to ask the Irish government that question, as they seem determined to negotiate with the public sector unions via leaks and threats to their friends in the media.

    If push comes to shove and there is strikes over this it will mean people are demanding a say in there lives and are refusing to become passive victims of State incompetence or worse and the bankers greed.

    What will not help is sullen silence and acquiesces over these cuts, not least because the bankers and their political gofers will believe they have got away with it and repeat their disastrous behaviour further down the line.

    People are defending themselves and their families life styles in the only way they see as being available, instead of carping from the sidelines you should either make an alternative suggestion, or shut up as what you are doing despite your talk of agreement is siding with the sharks against the common man.

    Forgive me for being so blunt, but sometimes in life there are situation which one might find incompatible, but the alternative is far worse and thus one has to choose sides.

    By all means join the gombeen men if you so wish, but first ask yourself is that really the company you wish to keep.

  • I should have said major strikes

  • Mack

    Garibaldy –

    Those figures reinforce the point. The median salary in Ireland is €25,000. All but 22,000 public sector workers earn more than this (and how many of them are part timers?).

    Let’s get real €40,000 per annum is a _high_ salary, especially given Ireland’s tax credits not a low one.

    Most of them do benefit from the pension levy, to a much greater extent than the average private sector worker most of whom have no pension entitlements.

    I’m more realistic than you about job losses. We’re going through a massive round of redundancies here. At this point I’ve friends and relatives on the dole, not one had a permanent public sector job. I’d rather see lower wages and more hired there than protect the wages of workers with jobs.

  • It really is a zero sum game. Capitalism or Socialism doesn’t rule – economics does. We cannot pay ourselves more than we earn

    Posted by igor on Dec 07, 2009 @ 01:38 PM

    OK

    But lets start with those at the top of the pay scales, both public and private; and if the recession and debt crises is not over by the time their wages have been reduced to the average wage. We can them discuss those who live on a pittance.

    If wages are to be cut there must be a prices, incomes and jobs policy, what has been suggested to far, is to hand round axes to the bastards who got us where we are, and then send them out to cut down those with the shortest legs.

    In your dreams

  • Mack

    Mick Hall –

    You are creating a false conflict in terms of the fiscal crises. The imbalance in current spending is not caused by bank bailouts – but by high wages to public sector workers (among other causes).

    The bank bailouts were off balance sheet.

    The Unions sat at the table and pushed for benchmarking – they played their part in causing this crises. David Begg sat on the board of the central bank.

    Strikes now would be the preserve of the priviliged protecting their position while the rest of hope we don’t lose our jobs. They will undermine their position more fully than you can imagine and tear the very fabric of this country apart.

    We are in a hole – I disagree with NAMA, but something had to be done wrt the banks. Stand in the way if you want, but if this country sinks I know who I will blame..

  • Mack

    Mick Hall –

    Prices are falling – around 6% this year. The budget cuts include cuts in professional fees and the highest paid in the public sector will be hit the hardest.

    Private sector earnings are already down significantly and will probably fall even further next year.

  • Mack

    The thing is, next year is different story. The government’s credibility re spending cuts is not yet on the line.

    Fine Gael appear to be opposed to spending cuts next year.

    http://www.thepost.ie/commentandanalysis/paying-for-others-mistakes-45911.html

    Would strikes reinforce that, or create a conflict that will force them to adopt the FF position?

    My guess, the latter..

  • I know who I will blame..

    Mack

    Perhaps you could enlighten us all then?

    Knock me down with a feather but I do not remember Mr O’Connor being a member of the Irish government.

    When push comes to shove, it is always the workers fault, middle class prejudice ‘never’ cease to amaze me. Some workers have managed to hang on to a decent pension and a liveable wage and yet according to you they are responsible for all of society’s economic ills.

    What you appear to be saying mack is capitalism can no longer provide a decent life for a majority of the people. Is that what you are saying, if you are welcome to the club. Although I fear your solution has more in common with the fascist right than the left.

    What is that song, on what side are you on. The difference between us is I believe governments have to take people with them if they demand sacrifices and cuts must be fair and aimed first at all those who are best able to shoulder them. The worst option is to target and smear one section of workers in the hope the public view them as fair game.

    As far as I am aware not once have you demanded the politicians become the first to make sacrifices. They could make a start by cutting their salaries down to the average wage, nothing more nothing less.

    Joe Higgins when a TD and the sinner TDs today manage to live well on that.

  • Mack,

    The median wage just shows that there are far, far too many people in the south working for disgracefully low salaries. Besides which, are you really saying that all wages should be calibrated according to what people on the lowest ends of the scale earn? I doubt you’re saying that, and I am 100% certain the people crying for war against in the unions in the media, the business sector, and wherever else don’t believe that either.

    As for the 40,000 Euro figure. I agree that it is a decent wage. But then again, given that I’ve spent one euro 25 on a single bar of chocolate (a caramello as it happens), that pints can be a fiver, that car insurance, especially for young people, is a massive rip off, and that the prospect of being able to afford a house on that salary and maintain any sort of lifestyle are fairly remote, it hardly means being in the lap of luxury either. And that’s for a single person, never mind people with kids etc. And all of that is directly related to government policy over decades.

    I’ve no problem with increasing the tax take. Far from it. If it had been up to me, the tax system down below would have been re-drawn a long time ago. Having large numbers of people not paying tax so as to justify lightly taxing massive profits made from speculation of various sorts has never struck me as especially sensible.

    Regarding job losses. Again, this is an area I’d be delighted to see the state take a more active role. But once again we are back to the question of in whose interests the state has been operating, and continues to operate. The simple reality is that the state has poured away tens of billions for the banks – and given them inflated valuations to boot – that could have created large numbers of jobs, and opened up new and sustainable innovative industries. Such as in hydroelectrics, thus making use of our natural resources.

    I think it’s wrong to say that the bank bailouts bear no relevance to the question of government credit, the need for cuts etc. Clearly when a government pledges 54 billion euro it is going to have an affect on its ability to borrow for other things. Especially when those toher things don’t serve the direct interests of speculators.

  • Mack

    Perhaps you could enlighten us all then?

    Well, I’ll always have a soft spot for the bankers, regulators, politicians, union leaders etc who over egged the good times. But specifically now, people taking to streets to out of self-interest rather than pulling together.

    What you appear to be saying mack is capitalism can no longer provide a decent life for a majority of the people.

    Not at all. There was a bubble, wages got ahead of what we could afford. Irish wages are high by international standards – Irish people have a high quality of life by international standards. When this crisis is over wages and living standards will rise again.

    You are talking in this instance of a 5% cut for some of the best paid workers in the state. The brunt will / should be borne by those at the top end of the scale.

    I certainly have called for TDs and high earners to be hit harder. Search this site if you don’t believe me.

    The worst option is to target and smear one section of workers in the hope the public view them as fair game.

    Some have smeared public sector workers, that is unfortunate. But the fact is they benefitted from bubble wages. After the dot.com bust tech workers had their wages slashed and huge numbers made redundant. Last year the construction workers shared that fate – next year it will be the bankers. The public sector workers will at least be spared the redundancies..

    I am slightly surprised at the inability of socialists to see at least some benefit in collective short term action to preserve long term living standards..

  • Mack

    And all of that is directly related to government policy over decades.

    Absolutely. Government policy fueled inflation, not only did housing tax breaks force house prices up, but increases in prices at state agencies (ESB, Bord Gais), and indirect taxes, were responsible for much of the increase in inflation from 2004 onwards.

    But all you are saying is we need to reduce our cost base? If we had our own currency we could devalue and get housing, pints etc down to reasonable prices easily and quickly. But we can’t devalue, because we’re in the Euro. We need to reduce costs the hard way.

    Either that live with chronic long term unemployment..

  • Mack

    Garibaldy –

    Bear in mind we have the second highest minimum wage in Europe.

    http://www.fedee.com/minwage.html

  • Dave

    “Capitalism or Socialism doesn’t rule – economics does. We cannot pay ourselves more than we earn.” – igor

    Igor, common sense is dangerous. The anti-democratic elites believe that if they make things too complicated for the public to understand then the public will no longer try to understand them, and simply hand responsibility for economic policies over to them. You must not point out that economics is nothing more abstract than the application of uncommon common sense.

    Competitiveness could be restored by valuing the currency rather than by devaluing wages (and living standards) and provoking bitter civil strife. Unfortunately, common sense was abandoned and that option was surrendered to an anti-democratic elite who will not devalue the Euro simply to help a pleb EU region out of the mess that it dumped it into. Our economy is expendable because we have given control of our economy to those who regard our economy as expendable. Common sense would have determined that control of macroeconomic and monetary policy should have remained with those who do not regard the Irish economy as expendable, but there you have it. And here you have it: Ireland paid itself 1.67 trillion more than it earned since it joined the Eurozone. Sadly, just as the last 10 years were squandered spending borrowed wealth, the next 50 years will be squandered paying it all back (plus interest). The EU will see to that since it now has regulatory control over what constitutes a systemic risk (i.e. what debt owed by a private financial business to another private financial business should be guaranteed by taxpayers).

    I don’t believe that the state can successfully ask people to take wage cuts in the national interest when it has declared that there is no longer a national interest (just an EU interest) and when it has been busying promoting post-nationalism. I think the state will grasp that eventually and abandon (doomed) attempts to devalue wages, imposing income taxes and levies to reclaim the money instead. That won’t do anything to restore competitiveness, of course, but it will buy some time before they have to call in the IMF.

    The situation might have been different if the state did not guarantee its failed financial institutions or if it still had the sovereignty to determine systemic risk, but we’ll all going to be held responsible for the bubbles wherein the vast bulk of 1.67 trillion has disappeared (never to be seen again), so the idea that this state can generate the wealth to repay those debts is entirely fanciful (especially when you look at how the actual wealth was earned prior to joining the Eurozone and you see that exports are now half the level in real terms than they were before we joined).

    We’re all fucked, really – so the public sector may as well dance with the band as the ship goes under.

  • Mick Fealty

    I’m working on something else when I would rather be arguing here, but I’ll make this brief.

    Mick, I worked peripatetically for ten years as part of a ‘language arts’ co-operative: thus no union.

    The Unions have a twin focus in Britain and Ireland: pay and conditions (and workers rights); and influencing government. In the Republic it was so successful in influencing government in the boom times, that they are themselves – in part – responsible for the abject nature of the current collapse.

    That’s what I mean about not serving the interests of the workers more generally. If you focus too narrowly on pay and conditions and fail to take account of wider societal changes, then you will almost certainly miss important changes in the larger picture.

    Why not take up positions during the boom like, for instance, demanding increases in income tax levels for your members (as well as others in society) in order that they be dispersed to combat social inequality? Or higher quality public services? Or perhaps more practically, taking a look at how jobs are changing and looking to enhance their members capacity to respond positively to technologically driven change in the job market.

    Scandinavian unions pay for and run their own Folk High Schools which offer the opportunity for members to take a year out of work to study social action in the broadest sense of the term in the most congenial of circumstances. In Ireland and Britain the closest its members get to the union (if they are lucky and don’t get caught up in any disputes) is the direct debit.

  • Come on Mick, it is a bit rich for you to suddenly demand of trade unions those things you have never demanded of those who have had real power in our societies. Trade unions like the rest of us are products of the society they exist in.

    I am not against the Scandinavian set up, the older I get the more I come to believe Scandinavian type social democracy is the best type of society we can hope for.

    Having said that the UK trade unions did set up the Labour Party to take up the political slack and cannot be blamed entirely for Blue Labours treasonous behaviour when it picked up and ran with Thatchers putrid wares.

    Mack

    The problem I have is we have been hear before, not least in my case in 1970s UK, when we took our collective responsibilities seriously. Working class people payed dearly for Thatchers revenge and indeed the current economic problems within the UK and Ireland are a symptom of that silly woman’s stupid nonsense that there is no such thing as society. Something which infected both the UK and Irish body politic and the media glitterati.

    Trickle down my arse! Mere words, just that, if workers are to be asked to make major sacrifices for a crises which was not of our making, then government needs to ask politely and act first by example. Without that, fuck em, we will all go to hell in a hand cart as Dave predicts.

    It is not that I do not see some term benefit in collective action, it is just I have no real belief the UK or Irish government have any intention of building a fairer and more equitable society once the corner is turned.

  • Mack

    Mick Hall –

    It is not that I do not see some term benefit in collective action, it is just I have no real belief the UK or Irish government have any intention of building a fairer and more equitable society once the corner is turned.

    I would draw a distinction between Britain and Ireland and indeed between Thatcherism and Irish economic policy.

    #1 Ireland has operated somewhere between Boston and Berlin. On the one hand we pursued a low tax model to attract and encourage investment, on the other we followed the European social model and gave the Unions a large input into policy via Socail Partnership

    #2 Unlike the UK, the tax system south of the border is highly progressive. 40% of workers pay no tax, while workers earning similar wages to myself (when both of us are working) pay much more tax than we would in the UK (not that my salary is massively high, if you believe prime time and their reports on ‘low paid’ public sector workers I’m low paid. But that’s not how I see it).

    #3 We have the 2nd highest minimum wage and replacement rates for social welfare that are among the highest in Europe (admittedly high child care costs factor into this – caused in large part by litigous nature of our society pushing up insurance premiums beyond what is reasonable)

    #4 On that basis – putting up taxes on lower paid workers to fund higher wages for public servants is deeply inequitable.

    The cost structure in Irish society is unbalanced, and needs reform. I would hope that these are the changes we’ll see now. And I’d much rather the Unions had leveraged Social Partnership to this end, rather than for feathering their own nests..

  • aquifer

    “the average wage in the public sector is around €51,000 or £46,000.”

    These are eye-wateringly high wages in an economy that is not yet very strong and widely based. I see relatively few jobs at these rates in the UK.

    Banks borrowed and borrowed to pay bonuses and make profits. Property prices were inflated by easy lending. The government taxed profits and capital gains from property sales, and the public sector workers took much of this extra money.

    The Unions were essentially taking borrowed money, but nobody is lending any more.

    Nobody has asked them to pay it back, just to stop pretending that the country can afford this nonsense.

    If they want to hang tough, just strike one day a week every week and we can pump our horns on the way to paying off the national debt.