The gathering storm: protests, strikes, talks and choices

The protests are back at Leinster House. During the hardscrabble years of austerity, protests were a regular feature of life on Kildare Street, as activists of all stripes brought their complaints to the gates of the Dáil. They were often loud, sometimes unruly. Gradually, as people became accustomed to the grim realities of life after the crash, and then as the fiscal tourniquet loosened, the protests abated.

But now they’re back. Gardaí, teachers, nurses and, this week, childcare workers have come to cheer, jeer and chant their demands from where there’s actually a reasonable chance that those in Government might hear them.But the Government knew already. Enda Kenny’s administration now faces a clash of economics and politics as these two forces of public life move in conflicting directions.

The politics of recovery is proving complex and troublesome. It is doubly so when the economic indicators are suggesting that the recovery may be facing an abrupt slowdown. Just as those economic warning signs are starting to flash, demands by public-sector workers for pay increases have suddenly become the most immediate problem that the Government has to deal with.

Jack O’Connor, the head of Siptu, warned last week that the world was on a “trajectory towards fascism”. Then he threatened a strike unless he got pay talks. It wasn’t just people in Government Buildings who thought it was a strange response to the threat of fascism.

Wobbly period

The Government’s early wobbly period has ended, but it has been replaced by an uneasy existence in which public-service pay is its main domestic challenge.

Kenny was on his feet in the Dáil on Tuesday answering questions about public-sector pay while the childcare workers assembled outside.

“Five years ago people wouldn’t have allowed you to mention the word strike. They would just say, ‘We can’t do that,’ but . . . now [people] are getting closer to having to take that action,” one protester told reporters.

Later, union leaders filed quietly into Government Buildings for a meeting with officials from the Department of Public Expenditure. The Minister, Paschal Donohoe, stayed out of it.

Like the Taoiseach, he would spend much of the week insisting that the Lansdowne Road agreement on public pay remains intact while acknowledging that amendments to it could be negotiated. It’s not a position that stands up to close scrutiny.

Donohoe and Kenny parried with limited success. Everybody involved in the issue now expects talks with unions in the new year. All can see the direction this is going in. They are less clear about the destination.

One Minister predicts that a wave of strikes might be necessary before any settlement were made. That would be dangerous and, in the long term, much more expensive, says a senior union official.

Pay pressures were already building in the public sector, but the Garda dispute and its last-minute resolution – still to be approved by gardaí – in the Labour Court turbocharged the demands from workers.

Sources throughout the trade-union movement say the Garda deal changed everything. “It blew us away,” says Liam Doran, general secretary of the Irish Nurses and Midwives Organisation.

Less money

Doran is one of a group of union leaders who had swallowed hard and sold successive pay cuts to a sceptical membership. “Three times we went into buildings and came out with less money for our members,” he says.

“Now a serving guard gets a minimum of €3,000 in January on top of the Lansdowne Road €1,000, while our members have to wait for the €1,000 until next September? I wouldn’t be allowed to accept that.”

“What winds people up is that they see other people getting a special deal outside the agreement that they’re not getting inside it,” says Bernard Harbor of Impact, the largest public-sector union.

It’s a view echoed across public-service unions. It would be hard to overstate the level of disenchantment. While the heaviest pay cuts were imposed on those on higher salaries, between pay cuts, the pension levy and tax hikes many public-sector workers on decent middle incomes before the crash – teachers, civil servants, nurses, gardaí – saw their take-home pay cut by about 20 per cent.

Most are working longer hours and have heavier workloads. Younger public servants, recruited since 2013 on lower salaries, are especially resentful, with many finding it almost impossible to make ends meet.

On the other hand, the general picture of public-service pay and conditions, as demonstrated by comparisons and statistics, is not one of uniform disadvantage. Public servants retain pensions of 50 per cent of their final salary, plus a tax-free lump sum on retirement – fantasies for anyone in the private sector. Nobody gets fired, and nobody gets laid off when the business fails.

Repeated surveys demonstrate that public-sector workers are paid better than their private-sector equivalents even if the exact size of the premium is a matter for debate.

Many public-sector workers benefit from increments, the automatic pay increases that accumulate the longer they stay in the job. Some – though not all – have seen their pay cuts recover through increments. And public-sector workers are, according to available comparisons, well paid by international comparisons.

Take nurses. Irish nurses were among the best paid in the world according to an OECD study last year (based on 2013 figures), earning an average of €51,000, although this includes management grades. Today registered nurses begin on a salary scale that starts at €27,000 and rises to €42,000, but, as in some other parts of the public service, allowances increase take-home pay.

The HSE was unable to supply detailed information about nurses’ average pay in time for this article, but the HSE’s annual report suggests that allowances and overtime add about 20 per cent to their basic salaries.

Gardaí also benefit from allowances. For example, Garda organisations repeatedly decried the starting salary of a garda, which at €23,000 sounds unacceptably low to most people. Yet the actual average pay for a garda after a year, according to the Department of Public Expenditure, is €31,000. After seven years the basic pay is €42,000 and actual earnings average about €50,000.

Despite the recent campaign, weekly earnings figures show that gardaí are actually the best-paid workers in the public service. And average garda weekly pay is currently almost 50 per cent higher than that of other public-sector workers, according to the CSO. That’s twice as much as average pay in the private sector.

The macroeconomic picture shows the cost of public pay also trending upwards. The recent budget provided for an increase of nearly €700 million in the public-sector pay bill next year, bringing the total to €16.3 billion. Pensions for retired public servants will cost another €3 billion. Combined, that’s more than a third of all public spending.

The public service will return to its peak size, last seen before the economic crash in 2008, next year; the public pay bill will surpass its 2008 levels in 2018.

Struggling

Nobody is getting rich in the public service. A lot of people are just getting by, and a lot of people are struggling to do so. And if there’s one thing that seems to make public servants seethe it’s the suggestion that their salaries in 2008 were the cause of the crash.

It’s a simplistic calculation, but undoubtedly the growth in public spending in the 2000s, on the back of windfall tax revenues, worsened the effects of the crash on the public finances. Public-service pay – through national pay agreements, benchmarking and the proliferation of allowances – was a hefty part of that growth.

And although the pay bill was certainly cut during the years of austerity, it was not slashed in the way that many discretionary-spending programmes were, many of which were relied on by the most vulnerable citizens in the most disadvantaged communities.

Ask anyone in the Government about these issues and they will talk about other priorities. Katherine Zappone has childcare. Simon Harris needs more doctors and nurses. Richard Bruton wants more teachers, schools and special-needs assistants. Everyone wants more money for investment. And Michael Noonan is worried that his tax revenues are softening.

To govern is to choose. At some stage the choice will have to be made between more public servants and better-paid public servants, between capital investment and more current spending, between resources for public servants and tax cuts.

Those choices can be fudged a little or delayed for a bit. But ultimately they can’t be avoided.