Joan Burton: Why public sector workers deserve a pay rise

Every budget is usually followed by two key pieces of legislation that implement it. The Social Welfare Bill will introduce key improvements that take effect in January such as the child benefit and pension increases. The Finance Bill will give effect to universal social charge (USC) reductions for every worker.

This year there is also a third piece of legislation – the Fempi (Financial Emergency Measures in the Public Interest) Bill. This Bill begins the process – again from January – of restoring public service pay. There will be those who wish to portray it as divisive, but let me tell you why it isn’t.

This is the Government’s fifth budget. The first three were immensely difficult but they were necessary to restore our public finances to health, sustain and create jobs and chart a course towards strong economic growth.

At all times we sought to protect as far as possible the most vulnerable in society – a fact recognised by the likes of Prof John Fitzgerald and the OECD. Now we have begun the process of raising living standards.

Underpinning all of this is the Government’s constant focus on helping people back to work. Since the peak of the crisis we inherited, more than 130,000 new jobs have been created and unemployment has fallen by more than a third. However, the unemployment rate remains too high, at 9.4 per cent. That is why our number one priority remains helping people back to work.

This is crucial because secure and fairly paid work is the single best protection against poverty in the long term. Every worker has not seen their own pay increase yet – many are still struggling to get by, but figures from the Central Statistics Office show that average weekly earnings in the private sector rose by 2.3 per cent in the 12 months to June 2015.

In addition, employers’ group Ibec has published a survey which suggests 71 per cent of companies will increase basic pay next year, with the median increase set to be 2 per cent.

The trend is encouraging and suggests that private sector workers can now look forward to a period of more take-home pay. The USC reductions in the budget will help on that front.

Public servants – gardaí, nurses, teachers and all the others who run the services we depend on every day – also suffered during the crisis. This latest Fempi Bill is designed to unwind their pay cuts and gradually restore pay.

There won’t be any pay bonanza and it is crucial to stress that pay restoration is aimed firmly at the lowest-paid public servants in the first instance. So next year, those on salaries up to €24,000 will get a 2.5 per cent increase, while those on salaries between €24,000 and €31,000 will get a 1 per cent increase. There will also be modest cuts to the pension-related deduction that will benefit all public servants.

While the emergency is over, though, the need for reform is not. The agreement reached with the public service unions ensures two things: a peaceful industrial relations environment until September 2018 and the commitment of public servants to the wider reform agenda. The importance of these should not be underestimated.

These same public servants now contribute more than 15 million additional work hours to the system because the overall size of the service fell during the crisis. They contributed heavily to getting Ireland back on track, just as every single household in the country did – and that's the point. There are those who want to sow division and create a "them" and "us" mentality between public and private sector workers. We shouldn't let them.

I believe in the importance of a successful private sector that delivers good jobs and a successful public sector that delivers good services. Both sectors put their shoulder to the wheel to get Ireland out of crisis. With the recovery now firmly under way, everyone should benefit from that. Joan Burton is Tánaiste, Minister for Social Protection and leader of the Labour Party