News

Private sector employees should seek pay increases of between 2.5% and 4.5% during 2022, guidance issued by the Private Sector Committee of ICTU and the Nevin Economic and Research Institute has recommended.

The bodies say such claims are justified on the basis of the strong and rapid economic growth expected next year, with personal consumption expected to grow “very strongly” next year as pent-up demand increases and household savings unwind.

They also think that a tightening labour market leading that is leading to high private sector job vacancy rates, the highest in 13 years, will drive compensation upwards.

“Employers were generally able to suppress wages below the long-run average when unemployment was high, as was the case in Ireland for much of the last decade,” the guidance document claims.

“However, the tightening labour market represents an opportunity for workers to redress this imbalance and obtain wage growth in excess of the long-run average.”

Inflation is also a driver, with NERI predicting it will peak during this quarter, before settling back to average around 2% from the second half of next year.

“In approaching pay bargaining unions should have particular regard to the disproportionate impact of inflation on lower paid workers,” the advice states.

The organisations claim this inflation will be coupled with productivity gains of 1.3% over the next three years based on Department of Finance forecasts.

Workers in the private sector are making a significant contribution to the profitability of the firms they work in, Dr Tom McDonnell, Co-Director of NERI said.

As a result, they deserve to share in the wealth being created, he argued.

Under the current public sector pay deal, Building Momentum, civil and public servants received a 1% pay rise in October and will receive a further 1% rise in October 2022.

A further pool of money equal to an addition 1% pay increase has also been set aside to deal with other issues, pay claims or outstanding awards in particular parts of the public service in February of next year.

Article Source – Private sector staff should seek pay rises up to 4.5% – RTE – Will Goodbody

Copyright and Related Rights Act, 2000