The Private Sector Committee of the Irish Congress of Trade Unions, in conjunction with the Nevin Economic and Research Institute, today issued guidance to unions on pay bargaining in 2022. The guidance advises unions that they should seek pay increases in the range of 2.5 to 4.5 % in the coming year.
The guidance takes account of:
- Strong and rapid economic growth is expected in 2022 with personal consumption growing very strongly next year as pent-up demand increases and household savings unwind. (this projection assumes minimal disruption from Covid-19 restrictions.)
- Within a tightening Labour Market, the economic-wide and private sector job vacancy rates (JVR) of 1.5 and 1.6 are at their highest since 2008. The Central Bank and the European Commission project that compensation per employee will increase by 4.8% and 5% respectively.
- On Inflation, the Nevin Institute is of the view that inflation will peak in the fourth quarter of 2021 before settling back to circa 2% in the second half of 2022 and an average of close to 2% thereafter.
- ‘Inflation plus Productivity’, based on Department of Finance forecasts will be close to 3.5%. A tightening labour market affords workers the opportunity to obtain wage growth in excess of the long-run average.
Dr. Tom McDonnell CO-Director of NERI, said that workers in the private sector of the economy are making a significant contribution to the profitability of the firms in which they work. They deserve to have a share in the wealth that is generated as a result of this contribution. It is recognised that collective bargaining is the most effective way of bringing about wealth re-distribution and this guidance should assist workers and their unions in seeking decent, fair and sustainable wage increases in 2022.
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