Wages must grow by 4-6% to outpace inflation, ICTU suggests

Muireann Duffy

Nominal wages will need to increase in the region of 3 per cent this year, and over 5 per cent over the next two years, just to keep up with cost of living increases, the Irish Congress of Trade Unions (ICTU) has said.

Publishing its 2024 pay bargaining guidance for unions in the private sector on Monday, the group said "based on an analysis of the prevailing conditions in the private sector of the economy", private sector unions will need to secure pay increases in the range of 4 to 6 per cent.

Noting a decline in real wages over the past two years, ICTU's general secretary Owen Reidy said wage increases will need to be higher than the current rate of inflation "in order to begin to catch up".

"Forecasts across a range of institutions are generally projecting inflation in the region of 3 per cent in 2024.

"It is therefore likely that nominal wages will need to grow in the region of 3 per cent in 2024 (and over 5 per cent over the next two years) merely to keep pace with the cost of living," Mr Reidy said.

"Ongoing gains in labour productivity across the economy and the need for cost of living 'catch-up' must also be factored into consideration.

"As such, it is appropriate for unions to seek pay increases in the range of 4 to 6 per cent in 2024," he added.

In addition to general wage increases, ICTU's pay bargaining guidance recommended improving the position of lower-paid workers, which it suggested could be achieved by improving pay for new entrants.

The congress also suggested securing and protecting weekly working hours, and securing non-pay benefits, such as shorter working time, additional annual leave, increased sick pay benefits, and improved pension benefits.

The guidance also encourages member unions to seek to introduce and enhance service pay awards, and make use of initiatives like the Small Benefits Exemption Scheme, which allows workers to receive up to two small benefits tax-free per year from their employer, up to the value of €1,000.