Comment: Cost of living crisis needs to be tackled with action and creativity

It seems we are in for a winter of industrial unrest and strike action as workers – in both the public and private sector – are mobilising to secure pay increases in the face of the soaring cost of living.

The Government and public sector unions have been tussling in recent months over pay and conditions. Teachers have not yet returned from their summer holidays and are already threatening strike action if an agreement can't be reached.

Under the current public sector pay deal, 'Building Momentum', workers received a one per cent pay increase last year, with a further one per cent due in October, but unions triggered a review clause contained within the agreement because of soaring inflation.

The Association of Secondary Teachers in Ireland (ASTI) has already said it will ballot its members next month on possible industrial action.

The Irish National Teachers' Organisation has also said it would ballot its members on potential strike action unless the Government puts “a respectable pay offer on the table". The Unite trade union is also set to ballot its public sector members on possible industrial action in the wake of rising inflation.

And last month SIPTU said it was commencing a consultation exercise with its members across the public service in advance of ballots for industrial action.

Forsa, which represents 82,000 mostly public sector workers, is also expected to endorse a planned Irish Congress of Trade Unions (ICTU) campaign that includes the prospect of industrial action in the autumn.

The Government is ready to return to talks with unions at the Workplace Relations Commission (WRC) over public sector pay.

The Minister for Public Expenditure, Michael McGrath, has already conceded that public servants deserve a pay rise and pointed out the offer on the table is currently seven per cent over two years. However, he cautioned that the Government has a duty to ensure that the public pay bill is affordable.

"We just need to be careful not to have a situation where we have wages chasing inflation and we end up driving it higher and making the situation worse."

He makes a valid point.

But something has to give. Householders and families are enduring the biggest cost-of-living squeeze in nearly four decades.

Figures from the Central Statistics Office (CSO) showed consumer prices here rose by an average of 9.1 per cent in the 12 months to June 2022 – the fastest rate of price growth seen in the Irish economy since 1984 – and up from 7.8 per cent in the year to May.

The main drivers of higher living costs are energy, fuel and food. Electricity prices, for example, are up almost 41 per cent and the cost of home heating oil has soared by 115 per cent since this time last year. That's going to hit households hard in the winter – especially the so-called squeezed middle who don't benefit from fuel allowance and such measures.

People can't sustain these rises and many households are already making difficult choices with some being pushed into poverty.

The solution here is not just increasing wages – though some increases are needed. That is a blunt and unsustainable solution that would just exacerbate the situation further.

The Government has already hinted at further measures to ease the cost of living pressures in the forthcoming budget in October.

These need to be creative and include changes to income tax bands and codes, Social Welfare improvements and other initiatives.

There is talk too over an overarching agreement between unions, employers and government covering pay, economic and taxation policy.

This is in the early stages and make look at issues such as housing and childcare.

Some sort of social partnership agreement could incorporate small pay increases but factor in tax cuts, welfare increases and improvements in services.

Employers in the public and private sector are already developing remote working and hybrid models, which can deliver benefits – financial and otherwise - for all concerned. This could be expanded or formalised.

And perhaps it's time to look at the four-day working week model again.

Some creative thinking is needed and everyone needs to be flexible and open to compromise.

You can't crack a nut with a sledge hammer.

But we need to start hoarding those nuts for the long winter months ahead.