The Private Sector Committee of the Irish Congress of Trade Unions is advising unions in the private sector to seek baseline pay increases ranging between 3.5% and 4.5% in 2020.

Each year, the PSC issues guidance to unions in the private sector. This guidance includes the level of pay increase that unions should seek from employers in pay bargaining negotiations commencing the following year.

Congress General Secretary Patricia King said that “despite the fact that average yearly earnings increased by 4.7% year-on-year in the private sector in the third quarter of 2019, all the indicators demonstrate that Ireland remains a low pay economy.”

According to EADS (Earnings Analysis CSO), Irish median weekly earnings in 2018 stood at €592.60 per week or €30,815 per annum.

Patricia highlighted the lower pay of women, with the median weekly wage being €523.25 or €27,209 per annum. She said low pay is also endemic amongst young workers.

Advice
The committee was advised this week by the union-backed Nevin Economic Research Institute (NERI) about the current and expected trends in wage and labour markets, before issuing the 2020 pay claim guidelines.

NERI predicted the rise of hourly earnings by 3.9pc next year and 4.1pc in 2021. This corresponds to the Central Bank forecast of pay rises increasing to 4.1pc next year.

The head of Fórsa’s Services and Enterprises division Angela Kirk explained: “A feature of 2020 pay negotiations will be how much the expected cost of living in the near future would wipe out the any pay improvements. Average pay awards in recent years have not crossed the 2.5pc mark,” she said.

Market inequality
Dr.Tom McDonnell, of NERI said that while poverty and deprivation were falling, one in six people are still experiencing deprivation and can only manage to pay for basic essentials, such as shoes or clothes.

“Ireland has a very high level of market inequality before tax and therefore social welfare payments have to compensate, this in effect subsidises low pay. In terms of unemployment we are a mid-level performer but our performance relative to other EU countries is a long way behind unemployment figures in Germany, Poland and the UK,” he said.

Read the latest edition of the Congress private sector bulletin HERE.