Fórsa backs indefinite strike action in a number of community and voluntary sector health services

Fórsa backs indefinite strike action in a number of community and voluntary sector health services

Union leader slams ‘foot-dragging’ approach of Government to addressing pay and conditions inequality

Fórsa’s national executive has backed a proposal for indefinite strike action in a number of community and voluntary sector agencies funded by the HSE.

The action is likely to involve hundreds of health and care staff, in a number of agencies selected by the union. The union has also committed to footing the wage costs of striking staff.

‘Section 39’ agencies provide a range of residential and day services for people with disabilities, mental health, addiction, domestic and sexual violence services, and other supports, under service level agreements with the HSE. Similarly, Section 56 agencies operate in a similar way for children’s services, funded by Tusla.

While these agencies are funded by the state, their employees in a range of health professional, clinical, clerical and administrative grades, are on lesser terms and conditions than their HSE counterparts.

Fórsa general secretary and Irish Congress of Trade Unions (ICTU) president Kevin Callinan said: “As one of the main representative unions involved, Fórsa has decided to call time on the Government’s dragging of its own feet on this issue.

“The union’s executive has backed the decision to identify a number of these employments and to organise indefinite strike action to highlight this ongoing pay inequality, which simply cannot be sustained.

“Up to a third of experienced professional health and care staff are leaving their jobs in these agencies every year to take up better remunerated employment with the HSE and elsewhere.

“We will ballot for indefinite industrial action in a number of employments, and Fórsa will foot the wage costs of those staff who go on strike. Services will simply be brought to a halt. At this stage, no other course of action will drive the point home,” he said.

 

Mr Callinan added that while limited strike action by Fórsa members in Galway, Mayo, Cork and Kerry last year garnered strong support from across the political spectrum, he said neither the Government, Department of Health or the HSE have since taken any meaningful action to address the issue, and workers continue to be left behind.

He added: “On the one hand, the health minister acknowledged in the Dáil last October that the Government is the ‘main and often sole funder’ of these organisations, and that its funding affects the ability of agencies to improve pay and conditions.

“On the other hand, it has spectacularly failed to grasp the link between its chronic underfunding of the services and the subsequent failure to meet the HSE’s recruitment targets in, for example, disability services. For every member of staff freshly recruited, another experienced staff member is walking out the door. The situation is both unacceptable and unsustainable.

“Government action is essential. It needs to address the funding of organisations in the sector, to make pay improvements for staff, stem the high rate of staff exits each year and fulfil recruitment targets for vital health services, including disability and homeless services,” he said.

Until 2008, workers in these agencies received pay increases under national wage agreements. At the onset of the financial crisis they were subject to FEMPI pay cuts in line with the same cuts applied to public sector pay. Limited pay restoration measures were eventually won by unions in 2019 but pay in these agencies remains significantly behind, and no formal mechanism for collective pay bargaining exists for workers in the sector.

Fórsa’s research has revealed that recruitment and retention of professional health staff in these employments has become a major challenge. The union said Section 39 employers are burdened with higher recruitment costs and growing waiting lists for services.

There’s never been a better time to join a union, and it’s never been easier. Join Fórsa today.

 

What is the Industrial Relations Act?

An excellent article from the Socialist Voice website in explaining the Industrial Relations Act.

The Industrial Relations Act (1990) was introduced on 18 July 1990, replacing the Trade Disputes Act (1906), the main principle of which was that anything done in a trade dispute, provided it was not illegal in itself, would be free from criminal and civil liability.

The 1990 act was introduced as a control mechanism on trade unions. It was a response to equivalent legislation being introduced in Britain because of increasing levels of industrial unrest and strikes, as dissatisfaction rose during the 1970s and 80s when the post-war gains made by workers under social democracy were slashed. Unions were being softened as they became cosy with the state under “social partnership,” and allowed it to be introduced with a minimum of fuss.

Among some unions there were serious issues with many parts of the act, covering political strikes, secondary pickets, individual workers’ rights, and the change in requirements covering strike ballots; but the act was passed and accepted. Reassurances and guarantees were given by the then minister for labour, Bertie Ahern (a former union official), who was regarded as a friend and sympathetic to workers’ rights. This has not proved to be the case, as his guarantees have proved to be about as reliable as his memory over his financial affairs.

The act introduced many changes to the accepted norms of industrial relations up to that time.

The definition of a worker was very loose and left self-employed and contract workers vulnerable, with the “gig economy” and bogus self-employment on the rise. This is something that has huge implications today.

In single-worker disputes the individual worker is very vulnerable, as all agreed procedures must be exhausted before action is taken. So the issue has to be dealt with first by a rights commissioner, the Workplace Relations Commission and the Labour Relations Commission before collective action is taken. This could take months, if not years; and there will be no guarantee of reinstatement at the end.

This leads to individual workers being at a huge disadvantage, which strikes at the very heart of the trade union principle of “an injury to one is an injury to all.”

Political strikes are banned. This would rule out tax marches. It would rule illegal the strike by the ten brave workers in Dunne’s Stores who stood up to the South African apartheid regime by not handling South African goods in 1984. (Even Ben Dunne has said of this strike that, on reflection, you cannot defend the indefensible.) It rules out a similar action against Israeli products today.

The CIE companies are very vulnerable in this regard, as during the dispute in 2015 over the selling off of 10 per cent of the service to private operators the implication by the Government was that this was deemed a political issue. With more of this coming down the line in the three CIE companies, it is an industrial minefield. It will also have huge implications for the ESB and all state-sector workers as the spectre of privatisation hovers over Ireland.

Secondary picketing and support strikes are also banned. During the Bus Éireann dispute recently it was the secondary picketing on Dublin Bus and Irish Rail depots that eventually forced the company to the negotiating table; but this was illegal and could have been very expensive for the trade unions involved.

A secret ballot of all members must be carried out before a strike can take place, and seven days’ notice must be given to the employer involved. The executive of the union has the final say on whether a strike is to go ahead in the case of a majority vote in favour, but there is no similar authority where a minority vote for strike.

Some industrial disputes require immediate action and can’t wait for the seven days’ notice required. This could happen in the case of a health and safety issue, when immediate action might be needed in the interests of workers’ safety. The recent situation with Clery’s department store required immediate action, but this was not available to the workers in question.

Sit-ins are also illegal.

These are all weapons whose use (or even the threat of their use) workers no longer have available to them. This weakens workers’ power and strengthens employers.

Judicial interpretation of what is a strike and what is a legal ballot or dispute are the essence of the 1990 act. The possibilities for litigation are endless. The decision is put in the hands of the judiciary, who have never been friends of workers. Strikes and industrial action can be delayed for weeks, which allows employers to take action to lessen the effect of the strike.

There is a willingness and an ability by employers to sue unions and officials for loss of income caused by industrial action, which has been made possible under the 1990 act. Under the 1906 act this was not possible, as unions were deemed exempt from such action. This is a huge weakening of the labour movement.

Trade unions act to promote values of social solidarity and to provide a check on the socially corrosive effects of the markets and individualism. The 1990 act is the worst dilution of workers’ rights in the history of this state. It facilities employers and gives them the power to question how ballots are carried out. A ballot was purely an internal matter for a trade union, but not according to the 1990 act.

In a survey in 1997 of union officials, 73 per cent said that the 1990 act was a mistake that should not have been accepted in its present form.

With pay and conditions under attack, rising inequality, and poverty at crisis levels, for workers to defend themselves in this neo-liberal climate we need to repeal the 1990 act and to strengthen workers’ power, and bring a bit of pride and solidarity back among workers if the trade union movement is to survive.

People in struggle gain class-consciousness from that struggle. It’s time for the trade union movement to fight back against the class war being waged against us. To do this we need to tip the balance of power from capital to labour. The first step is to repeal the 1990 act, and the equivalent anti-union legislation in the North.

Unions must become radical or become redundant.

 

Read this: 

https://socialistvoice.ie/2020/11/the-industrial-relations-act-must-go/

 

 

 

Everything you need to know about sick pay

Dr Laura Bambrick explains what workers need to know about their new legal right to be paid sick pay if they are too unwell to work.

Up until New Year’s Day 2023 Irish employment law did not require employers to pay their staff when absent due to illness or injury. Sick pay was treated as a perk of the job that employers had the power to decide whether or not to include in a contract of employment. 

As a result, half of the workforce, over one million workers, are not covered for paid sick leave in their terms and conditions. 

The outbreak of Covid-19 clusters in meat processing plants among low-wage workers denied paid sick leave by their highly profitable employers put our failed voluntary approach to sick pay under the spotlight.

A campaign by the Irish Congress of Trade Unions for legislation to make sick pay mandatory won cross-party support and widespread public support. Polling carried out by Ireland Thinks found nine in 10 people (87%) support workers having a guaranteed right to sick pay from their employer.

Two years on, the new Sick Leave Act became law from 01 January 2023. 
This followed lengthy consultations with trade unions, business bodies, and the public to agree the rules for statutory sick pay (the legal minimum employers must provide) and the passage of the Bill legislating these rules through the Oireachtas.
Here’s what you need to know about your new workers’ right to sick pay.
Who is covered
All employees who have worked for their employer for at least 13 weeks have a right to sick pay. 

Part-time employees are also covered and you don’t have to earn above a certain amount to qualify. This is to ensure people working irregular hours and in low wage jobs will have their wages paid when sick. 

In the UK, for example, where you must earn over £120 a week to qualify over 2 million workers aren’t covered for sick pay, 70% of whom are women.

Unfit for work

You must be certified by a doctor as unfit for work. But your employer can choose to waive this rule.
While it is common in other European statutory sick pay schemes to have a rule that sick leave is medically certified, workers in Ireland are unusual in having to pay for a GP visit.
Following repeated highlighting by ICTU that this out-of-pocket expense will be a barrier for low wage workers to access their right to paid sick leave, the income threshold for a GP visit card was increased to €46,000 in the Budget23.

Duration of cover

There are no waiting days. You will be paid from the first day of absence from work due to illness or injury. 
You will be covered for a minimum 10 statutory sick days a year from 2026. If your employer provides longer paid sick leave, the extra days are known as contractual sick days.
The 10 days will be gradually introduced over 4 years, starting with 3 days on 01 January.
•    From 2023, 3 working days covered. 
•    From 2024, 5 working days covered.
•    From 2025, 7 working days covered.
•    From 2026, 10 working days covered.
Sick days can be taken together or separately, as needed. You cannot carry over unused sick days to the following year.
If you run out of sick days before you are fit to return to work, you will transfer over to Illness Benefit if you have the required PRSI contributions.

Rate of payment

Sick pay will be paid at 70% of your daily rate of pay, up to a maximum of €110 a day or €550 for a five-day working week. 

Workers earning below €41,000 a year won’t be impacted by the €110 daily payment cap.

Compliance

All employers must comply with the rules of the Sick Leave Act, with two exceptions. 

Employers in financial difficulty who demonstrate an inability to pay can be exempt by the Labour Court from paying sick pay for up to a year. 

In such cases, employees’ sick pay will be paid from the Social Insurance Fund so that you won’t be out of pocket.

Also, if your employer has a company sick pay scheme where the benefits of the scheme are ‘on the whole as favourable’ to employees they too are not obliged to follow the rules in the Act. 

If you believe your employer has not followed the Sick Leave Act rules, you can make a complaint to the Workplace Relations Commission or Labour Court. The penalty for non-compliance is up to four weeks’ full pay on top of your unpaid sick pay.

Some will argue that this new workers’ right will bankrupt small businesses and that workers cannot be trusted to not abuse sick leave. These claims are baseless. 

Because sick pay has long been a workers’ right in almost every EU country and the UK we know how it will work when it is rolled out. There is no evidence of businesses closing down under the strain or widespread abuse by workers.
The new workers’ right to sick pay belatedly brings our employment law in line with the rest of Europe and will be a positive and long-lasting legacy of the pandemic. 

International News- The WFTU general secretary, Pambis Kyritsis addressed the 42th National Conference of the AITUC

The 42nd National Conference of the All-India Trade Union Congress is taking place in Alappuzha, Kerala on 17-20 December 2022 with the participation of delegates from all regions and sectors of India.

A big international delegation of trade unionists from different continents is attending the Congress.

The WFTU general secretary, Pambis Kyritsis addressed the AITUC expressing the solidarity of the international class-oriented trade union movement with the struggle of the heroic Indian working class.

You can read below the whole WFTU intervention.

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WFTU General Secretary Pambis Kyritsis Speech in 42nt National Congress Of AITUC India

Dear comrades,

First of all, I would like to thank for the invitation and the possibility  to attend yours historic 42nd  National Congress.

I especially thank the General Secretary of AITUC, Comrade Amarjgeet Kaur  a prominent leadership figure of the Indian but also the international class labor movement, who we have the honor of being a vice-president of our World Federation.

On behalf of  more than  105 million members of the World Federation of Trade Unions from 133 countries from all corners of the earth,  I convey to you and through you to the workers of India, militant class greetings.

AITUC has been and remains, one of the foundation blocks upon which the strong edifice of our World Federation is built. Since the establishment of the WFTU in 1945, it has steadily and continuously participated actively, occupying a leading and irreplaceable role in the development of the World class-oriented trade union movement.

That is why it rightfully leads our regional office for Asia and the Pacific and the regional coordinator Comrade Sri Kumar is a member of the Secretariat and one of the deputy G.S. of our Federation.

In the historical records of WFTU are recorded many names of important trade unionist leaders of the AITUC, who served the World Trade Union Movement through important posts.   I mention only a few of them, like S. A. Dange founding leader, member of the executive committee, Debkumar Ganguli, founding member, Secretary for Asia Pacific and Deputy General Secretary,  Sukomal Sen, General Secretary of  TUI Public Servants, Indrajit Gupta and KL Mahendra, WFTU  Presidents and of course com. Mahatevan who served for many years as coordinator of the regional office and one of the deputy secretaries of WFTU.

To those fighters and so many others I haven’t named to whom we owe, honor and glory.

Dear comrades, delegates of the 42nd National Congress of AITUC.

The world is going through a phase of extreme intensification of political, economic, and military antagonisms, aiming at controlling and exploiting the economic resources of our planet.

The peoples pay the price of the imperialist wars and interventions.

After the Russian invation in Ukraine the USA, the NATO and the EU they attempt to present the situation as a war between liberalism and authoritarism.  Thinking that this way, their own criminal role in the developments can be hushed up.  But  so many bloody  wars and interventions to promote their own selfish imperialistic interests are clearly visible.   Palestine, Syria, Iraq, Afghanistan, Libya, Yugoslavia, Cyprus and so many other places.   The world peace is not being protected by even more militarism or patronage of all kinds of far-right nationalists and fascists.  It cannot be based on blockades, sanctions and economic wars.

WFTU is fighting for peace, for an end to this war and to imperialist wars and interventions in generally, for the dissolution of NATO and all military coalitions and for the abolition of nuclear weapons.

The crisis of capitalism it deepens and strengthens, resulting the open violation of democratic and trade union rights,  the deterioration of working and living conditions and the dramatic widening of social inequalities, poverty, and exploitation. The results of the war of NATO and Russia in Ukraine, attempted to be loaded to the shoulders of the working class.

The sharp and uncontrollable increase in prices of all basic necessities, dissipates the living standard of the working people families at the same time that multinationals and monopolies are reaching new records in profits.

For WFTU it is clear that there is only one path to follow and this is the path of dignity, the path of the struggles.

The workers refuse to pay for the capitalist crisis and the imperialist wars, through remarkable struggles, strikes and mobilizations, all over the world.  WFTU affiliates are at the forefront of these struggles for the satisfaction of the contemporary needs of the workers at all levels: salary, employment, security, culture, and mental. To defend the democratic and trade union freedoms, the collective bargaining and the stable, permanent, and agreements-regulated labor.     The sharpening of state repression and authoritarianism,   is the response of the bourgeois governments to the just popular demands. Unfortunally with the cooperation or intolerance of surrendered trade union leaders together with yellow unions.

The arrest of the recently elected Secretary General of the International Trade Union Confederation (ITUC),  Luca Visentini brings to the surface one more time the issue of corruption within the Trade Unions and the necessity to intensify the struggles  to protect their autonomy and their class orientation, away from bureaucracy, corruption, and manipulation by the capital and employers.    In this particular case the arrest linked with the cover-up of terrible crimes committed against thousands of workers, many of whom lost their lives during their daily work.

The incorporation of the leadership of ITUC and ETUC to the neoliberal, anti-labor policies, the absence of a substantial reaction on its part, clearly coexists with the corruption and use of Trade Union positions for purposes foreign to the class interests of the workers.

Dear comrades, brothers and sisters

Concluding my intervention, I would like to wish you every success in the works, of your congress.  I am sure that with your pure class orientation and the militant guidelines of the WFTU 18th Congress, your future initiatives and struggles will meet  the demands and the  expectations of the working class of India.

I assure you that we watch your daily militant action  and you can always rely on the support and solidarity of the WFTU. For the defense of the political, social and Trade Union rights  of Indian workers,  against capitalist barbarity, for a world free of wars and interventions, without any kind of discriminations and man by man exploitation.

  • Long live the working class straggles for peace and social justice
  • Long live AITUC and the working class of India
  • Long live the WFTU

Thank you

 

Nurses in Six Counties go on Strike

Nurses in the Six Counties who are members of the union Unison have faced freezing conditions to take part in a day of strike action to demand better pay.

Strikes have been taking place since just after midnight and have seen nurses, ambulance staff and other health workers walking out and standing with placards in temperatures as low as -4C.

 

“It was extremely cold, but they were very determined to stand out and speak up” Anne Speed

Anne Speed, head of bargaining and representation at Unison Northern Ireland, told Nursing Times thousands of nurses were striking.

She said the atmosphere on the picket lines was one of determination and frustration and that there was “great solidarity among the workers”.

Members of the public had also shown support and had brought striking staff hot drinks and snacks.

“In freezing temperatures, that response from the public has been a real morale boost,” said Ms Speed.

On Strike placard sits in garbage pail post strike. Narrow depth with soft background. Shot in sun setting light.

 

Ms Speed said she was at the picket at Antrim Area Hospital this morning and the first group of staff who came out were nurses.

“It was extremely cold, but they were very determined to stand out and speak up,” she added.

One staff nurse on the picket line, who has been nursing for more than 40 years, described the current pay and conditions for health staff as “terrible”.

Nurses in Northern Ireland only received confirmation of their 2022-23 pay award last week, following an eight-month delay.

The award will see most staff on the Agenda for Change scheme receive a boost of £1,400 to their full-time equivalent salaries, as per the recommendations of the NHS Pay Review Body.

 

The below-inflation pay package is the same as that received by nurses in England and Wales which is causing them to strike too this month.

 

With the 10,000 nurses on strike for better pay in the North today.
We have two pay rates for Nurses in Ireland.
Nurses in NHS in the North are paid £29,710 (€34,810) in the South the HSE pay nurses €40,563 (£34,620)
Both health services are drastically short of nurses.
This is directly linked to low pay and chronic working conditions in two health services that are on their knees through underfunding.
As the debate for Irish unity continues unity must not mean the cobbling together of two failed health services or two failed states.
Unity must mean in health one fully funded all-Ireland health service, free at the point of entry from the cradle to the grave and offers decent pay and conditions for those working in it.
Partition is not good for our health.

ICTU submission on Auto-enrolment

ICTU submission on Auto-enrolment

Union says employers need to make customers aware of importance of respect and Government needs to strengthen laws

The Mandate Trade Union has called on members of the public to respect retail workers during the busy and intense Christmas shopping season. The call coincides with UNI Global Union’s international day of action which seeks to raise awareness about the importance of combatting violence and harassment across the retail sector.

Mandate General Secretary, Gerry Light, said that this is an extremely important issue for those working in the various precarious employments across the retail sector.

“The last two years have been extremely difficult for everybody but particularly for retail frontline workers, who continuously served their communities throughout the pandemic and prior to the rollout of a vaccination. The recognition of this fact alone should be the key motivating factor for customers to ensure that retail workers and the environment within which they work is free from violence and harassment. Dignity and respect must transcend across all workplaces, across all people and sections of society.

“Unfortunately, evidence from across the globe seems to indicate that this type of unacceptable behaviour towards retail workers is on the rise resulting in some cases with workers tragically losing their lives. Evidence also supports the reality that women are more likely to be subjected to unacceptable behaviour.”

Gerry Light called on all employers to implement a zero-tolerance approach to safeguarding the safety, health and welfare of all workers.

“Employers cannot remain silent on this issue and Mandate is calling on employers to generate greater customer awareness around this critically important matter and in this regard our members would welcome in-store point-of-sale signage that sends out this clear message.

“As part of our ongoing campaign ‘Respect for Retail Workers’ campaign Mandate is further calling on the Government to review and introduce – as necessary – stronger legislation which outlaws the abuse of workers and prohibits violence in the workplace. Examples of such robust legislation hve already been introduced in other countries like Scotland, Sweden and Australia.” 

Mr Light concluded by saying that respect for retail workers is not just for Christmas – it should be maintained throughout the year – but this time of year does allow for a heightening of awareness around the issue and for a renewed call to customers to show retail workers the same level of support, solidarity, and respect that they unselfishly displayed particularly during the Covid crisis. Whilst recognising that most customers act in a responsible and respectful way, one case of abuse is one too many, Gerry Light said.

‘Keep Water Public’ campaign seeks referendum date

‘Keep Water Public’ campaign seeks referendum date

Fósa is one of the unions that has formed the coalition behind the ‘Keep Water Public’ campaign. Launched at the end of October, the campaign calls on the Government to confirm a date for a constitutional referendum on the public ownership of water services. The campaign is supported by Fórsa, SIPTU, Unite, Connect and the Irish Congress of Trade Unions.

Speaking at the campaign launch, ICTU president and Fórsa general secretary, Kevin Callinan, said the campaign to name the date for a referendum represented a shared commitment by trade unions to ensure the future of public ownership of water services: “It’s time now to end any lingering uncertainty about the future of water services in Ireland. A referendum would give people the opportunity to have their say, in addition to providing us all with a unique opportunity to safeguard public ownership of water for future generations.

“In that sense, there should be no further hesitation, and we are urging the Government now to name the date. In doing so, it would be taking a welcome and positive step,” he said.

Public ownership of water services ensures safe and sustainable access to water for everyone.

 

Assistant general secretary Catherine Keogh, who has been working closely with Fórsa members in local authorities providing water services, has said the feeling among members is very strong: “They want the Government to name the date for a referendum, to clearly indicate when we can expect to cast a vote to protect the future of our water services. That feeling is universal, so I expect we’ll see strong support for this campaign,” she said.

Fórsa’s head of Local Government Richy Carrothers said the unions had come together to maximise participation in the campaign by union members: “Privatised water services result in higher costs and poorer services for the public. Public ownership of water services ensures safe and sustainable access to water for everyone.

“A referendum would help protect Irish water services from any future attempt at privatisation, providing a constitutional guarantee of public ownership. Opinion polls show that a huge majority of the Irish public want a referendum to ensure water services can never be privatised.

“We’re inviting all union branches and members to take part in this campaign by signing the petition and talking to their local political representatives about naming a date for this important referendum.

“This is the kind of grassroots campaign that unions excel at, and I’m confident that Fórsa members will seize the opportunity to get this message across to the Government parties,” he said.

You can sign the petition here and Fórsa members are encouraged to circulate the link among work colleagues, friends and family to seek their support for the campaign.

There’s never been a better time to join a union, and it’s never been easier. Join Fórsa today.

New General Secretary of ICTU is Owen Reidy

Ireland’s High Living Costs

From the well-known blog : Notesonthefront.blog

Ireland’s High Living Costs

We all know that Ireland has a high level of living costs – second highest in the EU

Living Costs 1

Irish prices (living costs) are 40 percent above the EU average.  However, comparison with the EU average can be misleading.  High-income countries invariably have higher living costs.  In the graph above all countries in our peer group exceed the EU average.    So the better comparison is with other high-income countries and not the EU base-line.  Nonetheless, bar Denmark, we are well above price levels in those countries – even high-cost Sweden.

While there is an acknowledgement that Ireland is a high-cost country, there is less discussion over where those costs lie.

Living Costs 2

No one would be surprised that alcohol and tobacco are more than twice the price of EU levels, given our high excise levels.  Nor would many be surprised that housing and energy are nearly 90 percent higher than the EU average.  Health follows third.  At the other end, clothing and footwear, and household furnishings are at the EU average. 

While this tells us where particular categories stand in relation to the EU average, it doesn’t tell us what are the biggest contributors to Ireland’s high living costs.  For instance, communication prices – which includes both telecommunications goods and services, along with postal services – are 46 percent higher than the EU average.  But we only spend 3.4 percent of our income on communications.  So even if we were to reduce these prices to our peer group level, it wouldn’t make a significant impact on our overall living costs. 

So what are the biggest contributors to our high living costs?

Living Costs 3

Unsurprisingly, housing and energy leads the table.  Nearly a quarter of our living costs in excess of the EU average is due to this category.  Next up is alcohol & tobacco, hotels & restaurants, miscellaneous goods & services and health.  These five categories account for nearly 75 percent of our excess costs.  It is within these categories that we need to make progress if we are to lower living costs. 

It wasn’t always like this – not to this degree.  Back in 1995 Irish prices were actually below the EU average.

Living Costs 5

Price rose quickly during the frist phase of the celtic tiger economy, rising to nearly 30 percent above the EU average by 2002.  It stayed at that level until a price drop following the financial crash.  But once the economy started to recover, so did prices.

There are other ways to measure the impact of high prices; in particular, from a life-cycle perspective.  For instance, young people will spend more on recreation and rents; those in their 30s and 40s will spend more on children (childcare, clothes, education-related costs); those in their 50s and 60s are likely to spend more on prescription medicine.  Capturing a life-cycle approach, combined with disposable income, would add to our understanding of the impact of living costs on households.

So why are prices high?  There are a number of potential contributory factors.  But let’s first rule out two commonly cited factors:  taxes on consumption and wages.

Living Costs 4

Our high prices can’t be put down to indirect taxation (VAT, Excise) as Ireland is below most of our peer group.  Similarly with wages – Ireland is at the bottom of the table in the market (i.e. private sector) economy.

So what might be the contributing factors?

  • Periphery costs?  Given that we need to import – by sea or air – a number of our inputs or final products, this extra travel cost could add to prices.  However, we import most of our clothing and footwear – yet these prices are well below other high-income countries.
  • Lack of competition?  This is the go-to explanation for many as ‘competition’ is viewed as a panacea for consumer prices and choice.  However, the restaurant sector is highly competitive (i.e. lots of enterprises) but prices remain high.  Non-alcoholic drinks are 39 percent higher than the EU average.  Can this be explained by lack of competition? 
  • Lack of scale?  Economies of scale can reduce prices but our small domestic market can be a barrier to achieving this scale – hence, imports.  Are there some items higher priced because of market size or structural features?
  • Lack of social spending?  Childcare fees are ultra-high, due to lack of state investment.  Ditto with GP services.  Public transport fees in Dublin are higher than in other European capitals.  How much of our high prices are due to Irish people having to pay on the private market what others throughout Europe consume through social markets – for free or at below-market rates?
  • High Profits?  Are prices high because Irish business extracts higher profits?  In the domestic market sector Irish firms have a lower profit margin than most of their EU peer group countries – which is consistent with a poor performing domestic sector.  There might be exceptions in certain sectors.

We need to establish the reasons for our high prices.  We used to have a National Prices Commission.  This body monitored and regulated prices in the economy.  Businesses in many sectors would have to apply to the Commission in order to raise prices.  In this Parliamentary Question from 1978 we find the Commission giving price increase permission to products ranging from tinned strawberries to coal, cemetery charges, bread, confectionary, GP fees, energy, cheese and more.

I’m not suggesting going back to that regime.  It wouldn’t be possible (though we shouldn’t rule out temporary controls in key areas such as energy).  However, a new Prices Commission could be established to investigate the extent of high prices on key goods and services – especially in comparison with other European countries – the reasons for these high prices and what steps could be taken to lower prices would be extremely helpful in the debate.   There may be market reasons outside the control of the state.  But there may be a number of steps a government could take to tackle our high costs.  A new Price Commission could not only inform the debate, it could politicise prices and bring new light to old practices. 

Most of all, we shouldn’t be fatalistic about our high living costs.  On the other side of our inflation crisis we can intervene in a number of ways – provision of public services, taxation, import substitution, removal of barriers to competition, etc.  There is a way to bring prices under some sort of control.

It’s called politics.