Dublin protest: The delusional march to nowhere


November 11, 2009, 11:40 AM

Last Friday, November 6, up to 70,000 workers in Ireland took to the streets in cities and major towns around the country in a mass protest against the cutbacks the government says must be made in state spending.

This great outpouring of frustration and anger united workers of all kinds, both those on the state payroll and those in private industry. It was a national, unified protest against government policy.

At least that's what the unions, who supplied the figures to the media, would like us all to believe.

The reality, however, is a bit more complicated. Let's start with the size of the protest marches.

The estimate from the Gardai (police) who monitored the march in Dublin was that 5,000 or 6,000 people took part, a lot less than the union estimate of 15,000. Presumably there was the same level of exaggeration about the size of the protests elsewhere. A national figure of 30,000 might be more accurate and is much less impressive.

But the numbers involved are less important than the other part of the union claim, that the marches had been supported by both state workers and private industry workers. A reporter on RTE Radio I heard interviewing people at the Dublin march said he had spent an hour or two at the protest, and had not been able to find a single person who was not on the state payroll.

The truth is that the protest got almost no support from private industry workers, presumably because they were too worried about endangering their jobs to take time off to go marching. The predominant mood among private industry workers -- those in the real economy in which businesses either make a profit or go under -- was that it was more important to stay at work and avoid any damage to the company they worked for.

This divide has become wider and more bitter here in the past few weeks. In private industry jobs are being lost all the time, workers have had to accept steep wage cuts and most guaranteed pensions have been discontinued.

These private industry workers feel that state workers, who are among the best paid in Europe and have generous guaranteed pensions, should take the pay cuts that are coming and stop whinging.

There is also the fact that four out of five workers in the state sector are in a union, but in private industry the number in unions has fallen dramatically. In the private sector only one in five workers now are unionized.

What that means is that the unions here now are mainly the voice of state paid workers and are fighting to preserve the privileged position these workers have, because that's where the union dues come from.

The unions in the state sector were very successful during the boom years in pushing up pay and conditions for state workers. And that was fine, as long as the taxes from the private sector workers which paid for everything kept rolling in.

The problem now is that the well has dried up. But state workers don't want to accept cuts deep enough to balance the government's books.

That's why 30,000 state paid workers were on the march in Ireland last Friday, or even 70,000 if you accept the union figure. But as one newspaper here pointed out, it wasn't the figure of 70,000 that was important. It was the figure of 70 ($104.8) million.

That was the only thing that had changed last Friday night. The country was 70 ($104.8) million deeper in debt because that's what the state has to borrow every day now to pay for state services and wages.

You don't have to be a rocket scientist to understand our problem. The cost of state services and pay for state workers went up like a rocket during the boom here. Now that we're deep in recession -- and it's much worse here than in other European countries -- we can't pay the bill.

The gap between state spending and tax revenue is now a massive 26 ($38.9) billion. We are spending 58 ($86.8) billion this year, but tax revenue is down to 32 ($47.9) billion.

With a budget gap that big, the country would be bust in a few years because the international banks would stop lending to us. In fact we would be bust already except that the European Central Bank (ECB) is propping us up. To get ECB support, the government had to agree with Europe that we would close the budget deficit by around 4 ($5.99)billion a year in each of the next three or four years.