Socialist Worker

Ireland - no payback for “social partnership” pay deals

The Irish boom of the 1990s was allegedly based on national wage agreements known as "social partnership"—it led to a low wage, casualised workforce

Issue No. 2084

During the 1990s the Irish Republic was the world’s fastest growing economy, creating the so-called “Celtic Tiger”.

The economy boomed on the back of US investment and today Ireland is among the world’s 25 richest nations. Between 1988 and 1998 manufacturing output increased by 9 percent a year.

The boom was allegedly based on national wage agreements known as “social partnership”. All the main trade unions signed up to the deals, arguing that they were in the “national interest”.

The result was a major increase in inequality. Ireland comes second only to the US in having the highest percentage of low paid workers in the developed world.

Casualisation and low pay have became major features of the workforce. Between 1988 and 1997 part-time, temporary and short-term contract employment rose by 165 percent.

When the wage agreements began in 1987, the share of the national economy going to profits, dividends, interest and rent – in other words to the bosses – was 31 percent. A decade later it had risen to 41 percent.

The aim of social partnership was to disarm the labour movement by co-opting its leadership.

Its supporters argued that it was designed to reduce poverty and end social exclusion. But instead the programmes facilitated a transfer of wealth to the super-rich.

The national wage agreements broke the link between pay, profit and productivity. Between 1990 and 1997, industrial profits grew by 144 per cent but wages lagged far behind.

One study estimates the output of each manufacturing worker increased by more than £97,000 in the decade between 1987 and 1997.

Wage controls did not result in low prices. After the first ten years of social partbership, Ireland had the highest rate of inflation in the European Union.

Long term national wage agreements were a disaster for workers in Ireland during a boom – they will be even more damaging for workers here in the midst of an economic crisis.

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