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September 2006 Archives

If Ireland was Privatised

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With the Aer Lingus floatation en route, it would be interesting to consider an Initial Public Offering for Ireland plc. Notwithstanding a strong historic performance, I reckon that it would be considered a poor investment on the grounds that it is heavily over-borrowed, poorly managed, losing competitveneness, over-priced and over-dependent on a few sectors. In addition, large sections of its work force is very inefficient, dissatisfied, riddled with inequities and its shareholders may well depose its long-serving top management team at the next AGM.

Broadcast on RTE's Today with Pat Kenny on 14th September 2006.

Towards 2016 - Towards Greater Inequity

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The recently approved Towards 2016 agreement is, like its predecessors, unbalanced and inequitable. Based on data abstracted from the recently published National Employment Survey, total national earnings amounted to approximately €42 billion in 2003. On this basis, the 10% increase under Towards 2016 would be worth €4.2 billion and, if distributed equally, would equate to €2,900 a year per worker.

Because increases are applied on a percentage basis, workers at the lower end of the scale receive much smaller monetary increases. This means that the 233,000 workers earning less than €250 a week are likely to share about €256 million whereas the 145,000 workers earning more than €1,000 a week will share about €1,100 million. On this basis, the 10% of the highest paid workers will secure about a quarter of the total increase and the 16% of lowest paid will get just 6%. Furthermore, the extra 0.5% negotiated for low paid could cost about €25 million and amount to considerable less than one percent of the total value of the agreement.

What is so disconcerting about national agreements is the cumulative effect of awarding percentage increases across the board. This only serves to widen the gap and perpetuate inequities. Is it any wonder that, notwithstanding the size of the State, our political and administrative leaders are, thanks to these increases, amongst the best paid in the world? Towards 2016 should be viewed as a national disgrace rather than a national agreement. If the State can afford a wage increase of €4.2 billion, why can't it be distributed more fairly?

Letter published in the Sunday Business Post on 17th September 2006.

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