Ireland

220,000 unemployed...Recession looms…end of ‘Celtic Tiger’ economy

www.socialistworld.net, 05/08/2008
website of the committee for a workers' international, CWI

Unions must defend jobs & fight cuts

Stephen Boyd, from July/August 2008 issue of The Socialist (newspaper of the Socialist Party - CWI Ireland)

Signs of the oncoming recession are all around us. Ten thousand signed on the dole, in June, taking the total unemployed to 220,000 – on average 650 people are losing their jobs every day! Nearly 55,000 have joined the dole queue in the last 12 months; this represents the biggest increase since 1975.

The economy has gone into a dramatic decline. Long gone is talk of Ireland being one of the fastest growing economies in the world. Now all we seem to be getting from the government is that workers must accept a pay freeze and that there has to be at least €500 billion in cuts. However, they are not called cuts anymore; apparently they are adjustments or savings! But the reality is that working class people and communities will suffer all around the country, as public services are slashed. Government minister Mary Harney stated that there will be more cuts in health spending, “Health spends about 25 per cent of all the money we spend in the country, so clearly the health system can’t be immune from the overall context in which the government finds itself.”

On top of rising unemployment, prices are spiralling out of control. A survey by the National Consumer Agency showed that shoppers in the South are paying 30% more than shoppers in the North. Supermarket giants like Tesco and Dunnes are profiteering and ripping their customers off, it is no wonder their profits are counted in the billions!

Inflation is now a major burden on working class families and price rises across the board are eating away at their standard of living. And there is more to come. It is predicted that the price of oil may rise to $200 a barrel in the next six months – that’s almost a 40% increase and will drive up the cost of everything we buy.

Home heating oil costs 14% more than the EU average and Bord Gais are seeking a 19% price increase and the ESB are looking for a 30% price increase.

Yet, the government and IBEC (big business) want workers to accept a pay freeze – although there is no such thing as a pay freeze. If you do not receive a pay rise and inflation is 5% that means your income will have dropped by 5%, in other words, the bosses want you to take a pay cut!

Rising inflation across the EU has resulted in the European Central Bank (ECB) raising interest rates to 4.25%. They may increase the rate twice more by January. This is adding a huge burden onto mortgage holders and on the majority of working class people who owe money to the banks. The Irish Congress of Trade Unions (ICTU) is predicting that inflation may rise to 6.5% by January. Yet they are still sitting around the table negotiating a new "social partnership" agreement with the government and IBEC. But the bosses will not willingly concede pay rises that are going to protect workers standard of living.

‘Social Partnership’ does not work for working class!

The Irish Times reported that David Begg said: “He would not advocate sacrifices by workers to keep the current social partnership model. He said social partnership was not working for the trade union movement and the test now was whether it could be made to work” (26 June 2008).

The Socialist Party for once agrees with David Begg – yes, “social partnership” is not working for trade unionists, but we depart with him on his belief that it can be made to work. “Social partnership” has never worked to the benefit of workers. The most recent agreement Towards 2016 saw a pay cut for all workers.

Inflation for 2007 was 4.7%, yet full time weekly earnings increased by only 2.3% in business services, 3.6% in public sector, 4% in the civil service and only 0.8% in the semi-states! The average increase for manual workers earnings was only 2.5%. Every single sector of workers saw their pay fall last year because of the constraints of “social partnership.”

The ESRI is predicting the economy will enter recession this year and big business and the government will do everything they can to protect profits and to make working class people pay for the crisis. ICTU should walk away from the “social partnership” talks; they failed to deliver for workers during the boom and they certainly will not stop the job losses or cuts in pay and conditions during a recession. What working class people need now are trade unions that will fight against redundancies, that will campaign for above inflation pay rises and that will combat the “race to the bottom.”

We were told that the capitalist market would transform this country. Yet after 15 years of unprecedented growth and wealth, the health service is worse, the education system is in crisis and 50,000 are still waiting for social housing!

All of the major political parties support the capitalist market, including Labour and Sinn Fein. Only the Socialist Party is committed to building a political alternative based on struggling for socialism – the only system that can deliver a decent quality of life and proper public services, by democratically using society’s wealth and resources for people’s needs.