Good afternoon delegates.
I would like to start by wishing you a very warm welcome, on behalf of the Irish people, to Dublin.
We were pleased to be able to host.
After all it’s not every year the European Federation of Public Service Unions comes to town.
We always have to be careful with an organisation of 8 million members, that’s more members than Ireland has citizens!
I must commend you on the impeccable timing of your discussion on the future of work.
There are real and substantive issues here which need to be carefully thought through.
I note the theme of the Congress is titled “Fighting for a Future for All”.
However, if you are “fighting”, you are not alone, because ultimately we are all concerned about the future of work.
And this Government is committed to working with all groups to ensure high and rising standards of living over time.
This Government is also committed to a future for all.
We see the trade union movement as important stakeholders in policy making.
And there are now well established mechanisms for this to happen.
We set Public Service Wages through Collective Agreement, make progress on wider labour market issues through the Labour Employer Economic Forum, and discuss budgetary priorities through the National Economic Dialogue.
We do this because we know, and the history of the 20th century shows, that progress can be made when trade unions and the government work together to improve standards of living for all.
For example when negotiating on public service terms and conditions we believe that working together through a collective approach offers benefits to both the state as an employer and your members as employees.
Firstly a stable collective agreement gives greater certainty to public service pay, and by extension the Public Finances.
This certainty allows us to go out and make progress on other societal priorities, such as health, housing and childcare, knowing that tackling these issues can provide a better, more sustainable, way of increasing living standards.
It has also allowed us to recruit an additional 45,000 public servants over the last 4 years.
These are all issues which trade union members have a considerable interest in and stand to benefit from.
This would not have been possible without a level of sensible wage restraint.
Secondly we believe that all public servants should be treated with respect and equality.
We do not believe that pay increase should be given solely to public service workers who have the capacity to shout the loudest.
Finally a situation where improved terms and conditions can be negotiated fairly through dialogue rather than through strike action is better for public service workers and citizens who depend on public services.
Drawing further on the theme of the Congress, I would like to contribute a few thoughts on
1. The Current Status of work – where we are now.
2. The Future of Work – where we want to get to.
Current Status of Work
The Economist last week had an interesting piece about what it called the “Great Jobs Boom.”
Perhaps a little provocatively the article details how employment levels were at record highs across the OECD and unemployment at record lows.
It argued that work is not more insecure with consistent proportions of part time to full time employment and a limited share of workers in the gig economy.
Participation rates are climbing.
Wages, initially slower to react are now rising more quickly.
It concludes with pointed comments to both the left and the right of the political spectrum:
“The left needs to accept that many of the criticisms it levels at capitalism do not fit the facts……However the lot of workers is improving and entry-level jobs are a much better launch pad to something better than joblessness is”
“The right should acknowledge that jobs have boomed without the bonfire of regulations that typically form its labour market policy. In fact labour market rules are proliferating”
These trends of improving labour market conditions exist in Ireland.
Since the lowest ebb of the recession employment has increased by almost a quarter, to 2.3m.
The unemployment rate has declined from a high of 15.9 to a figure of 4.4%.
The split between full time and part time employment is at pre crisis levels – 4/5ths full time 1/5th part time.
Income inequality has consistently reduced in Ireland since the mid-2000s and this trend was maintained during the economic crisis and bailout period.
Female participation over the last 20 years has increased by 10 percentage points, with a structural shift underway in younger women’s participation in the labour force, as reforms designed to support working families take effect.
Wages which were initially slow to follow the growth in job numbers, possibly because of the size of unemployment, are now responding. Since Q3 2014 average weekly wages have increased by nearly a hundred euro or 14%.
If you told many in 2012 when the economic sovereignty of our country was compromised, that by 2019 we would have near full employment wage growth and significant increasing investment in our public services, it would have appeared difficult to believe.
Yet this is the reality of what has been achieved, not just in Ireland, but elsewhere in the European Union and the OECD.
And I readily acknowledge the significant and responsible part played by the Trade Unions in that recovery here in Ireland.
The fact that this has happened needs to be recognised as the starting point from which a consideration of the future of work should evolve.
Why this has happened deserves serious consideration.
It seems the answer to this question involves some blend of the following:
- Fiscal and monetary policy that reflects where we stand in the economic cycle
- Labour laws that strike the balance between security for those in work the flexibility to respond to a changing labour market
- Active labour market policies that provide a safety net tailored to helping individuals re-enter the workforce
- Better matching of job search to job vacancies
- Increased skills and education in the population as a whole
Of course this relatively benign narrative of progress could change quickly.
We talk in the shadows of Brexit.
If the UK leaves the European Union without a deal on the 31st of October the biggest losers will of course be the UK.
The second biggest losers will be Ireland given the level of interconnectivity that exists between these two islands.
Our Department of Finance projections for a disorderly hard Brexit is that ten years after, the real output of the Irish economy would be 5% lower.
Such a shock would inevitably impact on domestic demand, employment levels and the public finances.
And Brexit is just one of a number of structural changes that could impact on future work.
- The outlook for the international trading environment is challenging;
- The pace of technological change and its adaptation by society is ever-quickening. We are now experiencing a fourth industrial revolution – where the impact of digitalisation is advancing in new and unanticipated ways. This will entail fundamental changes in many occupations that exist today, and the creation of entirely new roles in the workplace.
- The imperatives of climate action mean we must accelerate the decarbonisation of our economy;
- The demographics of our society, and an aging population, put pressures on welfare, pensions and services, and on a generation coming forward whose jobs do not yet exist;
- The productivity of our domestically owned small and medium enterprises lags far behind the foreign owned firms.
In facing all of these changes, I am confident that Ireland can make a positive response.
Future of Work
In response this Government has just published a strategy called Future Jobs Ireland that seeks to put our economy in a better place to withstand shocks when they come.
It sets out a deliberate policy shift to increase firstly quality jobs that will allow for better living standards and secondly, sustainable jobs which will be less vulnerable to loss.
For Ireland, in the coming decades, the structure of our economy will undergo profound transformation as the impact of new technologies and decarbonisation reshape industries and jobs.
The nascent revolution in robotics, artificial intelligence and automation will transform our future labour market.
This means certain job roles will disappear or be redefined and adapted to new technologies and brand new job roles will appear requiring new and different skillsets.
Many of today’s school children will be employed in jobs and industries yet to be conceived.
And while there is ongoing debate about the scale and timing of automation’s impact in the workplace, it is generally acknowledged that technology is going to significantly alter many occupations and create new ones which will demand different skills in the near future.
As the role of automation increases, the best way to mitigate all of these risks is to improve the resilience of the economy through higher productivity.
As an indicator, productivity is widely regarded as one of the most important in economics, given that a country’s ability to increase its living standards over time depends almost entirely on its ability to improve its output per worker, in other words its productivity level.
As Paul Krugman once said, “Productivity isn’t everything, but in the long run it is almost everything”.
This is why the OECD in its most recent economic survey of Ireland, stated that in order to further raise living standards in Ireland, we must raise the productivity levels of Irish firms.
CSO data published last year showed that between 2000 and 2016, foreign-dominated sectors in Ireland experienced productivity growth of more than four times that recorded in sectors dominated by domestically-owned firms.
While this divergence is not uncommon in developed countries, it is more pronounced in Ireland.
The resilience of the Irish economy and the future jobs market hinges on unblocking the productivity potential of Irish businesses.
This is why productivity is one of the key pillars of the Future Jobs Ireland strategy.
We must therefore work to ensure that our labour market offers attractive, high quality jobs; that people are enabled and incentivised to seek employment; and that barriers to participation are minimised.
So in conclusion.
We must, as the economist Paul Collier states in his recent book, “The Future of Capitalism” enhance a sense of belonging – whether it is to a decent job, an affordable home or a strong community – because “belonging is the foundation for reciprocal obligations.”
The political case for this is so strong. Creating good work now and in a changing future is an essential element of how we can create this inclusivity, the lack of which is at the centre of many political challenges.
While we are starting from a good place, the agenda for action is all encompassing.
In making this journey we will reach out to the Trade Union movement to agree constructive and creative solutions to the challenges we all face.
I can assure you that in Ireland and in Europe you have a Government that is willing to listen carefully to your contribution.
I look forward to hearing the results of your deliberations at our National Economic Dialogue at the end of June.
Thank you
Ends.
Word Count: 2,181
Speaking Time: Approx. 15mins