The Irish Congress of Trade Unions (ICTU) has again called on the Government to do more to protect workers’ living standards as the World Bank forecasted that energy and other commodity prices, which are currently driving inflation, are likely to remain “historically high” until 2024.

In its latest economic advice to ICTU, the union-backed Nevin Economic Research Institute (NERI) said inflation here could approach double digits this summer, and is unlikely to fall to 2% before 2024. It projected that inflation would average between 6% and 7% over the whole of 2022.

The consumer price index, which is the standard measure of inflation in Ireland, hit 6.7% in March. This is by far the highest rate of price rises for over 20 years.

And earlier hopes that prices would quickly fall have been overtaken by the impact of the illegal Russian invasion of Ukraine, which is pushing up prices by reducing the supply of energy and a range of food commodities.

The International Trade Union Confederation (ITUC) says the impact of this falls hardest on the most vulnerable countries, at a time when the world is trying to recover from the recession and increased inequalities exacerbated by the Covid pandemic. But it’s hitting living standards everywhere.

Marking May Day last weekend, ICTU published a new report comparing the value of the social wage – free or cheap publicly-funded services – for workers in Ireland and the EU. 

It found that a lack of public provision left Irish workers on modest wages paying much more than other EU citizens for essentials like housing, healthcare and childcare.

Meanwhile NERI says that, while uncertainty and inflation will negatively impact consumption and investment decisions in Ireland, it’s unlikely to cause a recession. It forecasts that domestic demand should grow by close to 4% this year and next.

ICTU’s Private Sector Committee has increased its targets for pay increases in light of inflation, and Fórsa general secretary Kevin Callinan has said additional pay increases are also needed to stabilise the public service Building Momentum agreement.

“While the various Government measures go a little way to address the effect of the cost-of-living crisis, workers can’t be expected to bear the increased cost of living on their own. All employers who can afford it will have to assist with efforts to maintain living standards through the normal bargaining processes,” he said.

He added that unions also wanted to avoid a ‘wage-price spiral’ where pay increases start to fuel inflation. “But we must strike the right balance. We can’t end up destroying consumer confidence and affecting jobs and exchequer returns unintentionally,” he said.

The World Bank’s vice president Indermit Gilt also urged Governments to “take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy” when he launched the Bank’s latest economic assessment last month.