Ireland Calling by John Spain
Ireland is a country in public sector worker-inspired turmoil
Posted on Wednesday, March 10, 2010 at 04:56 PM
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We're a country split down the middle. Our 300,000-plus state workers have now decided to escalate their fight against the pay cuts that have been imposed on them.
Over the last few weeks they have been taking limited action which delayed or curtailed services. But on Monday of this week they agreed to increase pressure on the government by complete work stoppages to take effect on a rolling basis over the next few weeks.
So in the next few weeks schools are likely to close for unscheduled half days, hospitals will have to cut back on treatments and welfare offices will be slower in providing help to the unemployed.
Those are just three examples. But the campaign is likely to be felt right across the range of government services, from the provision of passports to the running of the courts to the gathering of revenue and the payment of grants and state aid.
What it will amount to is open warfare between the government and 300,000 state workers. And caught in the middle will be the rest of the public.
To say there is concern and resentment here about this would be a serious understatement. There is seething rage among the general public already at the state workers for the limited action they have taken so far.
And passports are already a sore point. The passport office workers shut the public counters early last week, which meant that a number of people who were due to travel could not update their passports and were unable to leave the country.
They were on the Liveline phone-in radio show here the next day expressing their outrage at the way they had been treated. The vitriol they heaped on the state workers was shocking.
"I'm so angry I can hardly speak,” one caller said. "These are people with secure jobs and good pay and guaranteed pensions ... I could see them sitting in their back office drinking tea ... They wouldn't do anything to help me. They should all be sacked. They're selfish, out of touch, they don't care about anyone but themselves.”
Caller after caller gave vent to their feelings. There was little or no support for the state workers.
And the rage is likely to be even greater over the next few weeks, as kids are sent home early from schools and patients are sent home early from hospitals and Gardai (police) can't be contacted to respond to the public.
As I said, we're a country split down the middle.
The cause of all this has been analyzed in this column before. Tax revenues have collapsed, the government has run out of money, we can't afford to pay state workers as much as they have been getting.
In fact tax revenues here have now fallen to the 2002 level. But since then, the payroll for state workers has increased by 35%.
So far the government has cut them back by an average of 12% over two budgets. But the state workers won't accept it. They want the government to reverse the cuts and to go on borrowing or increasing taxes so that they can avoid pay cuts now or in the future.
The weakness in their position is that so many people in the private sector -- the real economy where jobs depend on productivity and being able to compete in the global market -- have taken heavy cuts in pay. And in contrast to the guaranteed pensions of state workers, many private sector workers have seen their pensions become worthless as stock markets crashed.
In contrast to the security of the state workers, private sector workers in Ireland are living in fear -- fear of losing their jobs, of not being able to pay the mortgage, of seeing the pensions they have paid into all their lives vanish into thin air.
This fear is making people angry, extremely angry, at the behavior of the state workers who are seen as unaware of how lucky they are and unbelievably greedy.
And on top of all that, the numbers just don't add up. There is somewhere over one million people in jobs in the private sector here (the exact number depends on how many part-timers you include). They have to pay for the 400,000-plus people who are unemployed and the 300,000-plus state workers. As well as paying for everything else.
You don't have to be an economist to see that those numbers don't add up. We have far too many people on the state payroll for a country of our size, and in spite of what the unions say, they cost too much.
In the boom years it didn't matter. But now it's unsustainable.
If the state workers are to have guaranteed pensions they must pay for them at the market rate, which is at least three times what they pay at the moment. And if the pain of the recession is to be shared equally, their pay must be reduced in line with the fall in pay in the private sector, which is the reason tax revenues have declined.
The state workers cannot be a protected elite. They must take their share of the pain that everyone else is feeling.
Yet it is clear that they have no intention of doing so. Their argument is that it is the developers and bankers who caused the crisis, not state workers. They didn't cause the mess, so they are not willing to help clear it up.
The problem with that argument is that the vast majority of private sector workers did not cause the mess either, but they are paying the price because they have no alternative. Unless they are competitive their jobs will go, so they take the cuts.
The only reason the state workers are willing to strike is that they can't be fired and the government can't go out of business. Or so they think.
The government is taking a hard line on the confrontation, saying the cuts announced in December's budget cannot be reversed. The unions are doing the same, announcing their decision to escalate action after a meeting of public sector union leaders on Monday.
The teachers are likely to be first, closing schools early and causing chaos for working parents, even though teachers in Ireland earn 30% more than in Britain and have a shorter school year.
The Frontline Alliance -- the unions representing frontline state workers like nurses, Gardai, fire fighters, prison officers and ambulance personnel -- say they will support whatever decision is taken on further action by the other unions.
Most civil servants here are well paid by international standards. But the state worker unions are making the point strongly that a lot of their members are low paid workers, the junior clerical staff, some of whom earn less than ****30,000 a year.
The weakness of this argument is that many of the 400,000-plus army of unemployed here would be delighted to have a job that pays even that much. It's more than double the minimum wage.
The Civil, Public and Services Union (CPSU), which represents 13,000 lower paid staff, has already given notice of strike action and a four-week ban on overtime. It has warned that it will immediately place pickets on any location if a member is removed from the payroll.
Members of the other big public sector unions are unlikely to pass such pickets, and so the government has to tread carefully or we could be looking at a situation that could spiral into a national shutdown of services.
The inconvenience, annoyance and even suffering this would cause to the general public would be enormous, never mind the damage it would do to the economy and the country's reputation.
Strike action could shut down public offices including welfare, passport, revenue, the courts and even the Dail (Parliament), which is already under pressure due to phone and email disruption, and to civil servants refusing to deal with parliamentary questions and ministerial reports.
To avoid all-out strike action, which would mean they would lose pay, the state workers unions are trying to concentrate on what they call "rolling" action, where services are withdrawn partially or for a few hours at a time by a work to rule and this is repeated over time.
For example, they refuse to answer phones unless this is specifically part of their job. But this kind of sporadic action, with minimal warning, is likely to make the public even angrier.
Another big weakness in the state workers’ case is that before the last budget, when they knew pay cuts were coming, they offered instead to make an equivalent saving by working more efficiently.
The government went ahead and cut their pay because they did not believe the unions would deliver. Now people are asking why state workers are not delivering more productivity anyway, since the unions have already said that is possible, just like private sector workers must constantly deliver to survive.
Last year's cuts in public sector pay were the start of a three-year program of budget rebalancing which will mean the state pay bill has to be reduced even further each year for at least another two years. That will mean there must be further savings from the state workers.
Instead of trying to reverse the pay cut already imposed on them, they should be coming up with efficiencies to deliver more savings and avoid further pay cuts in the future. They can't change what has happened, and causing disruption is not going to make any difference.
They are in this mess with the rest of us. If they don't learn to accept that it could get very ugly here, like in Greece.
At the moment we're split down the middle, but so far it's only a war of words. We don't want to get to the stage where the two sides start fighting each other on the streets.