From Socialist Voice, July 2010

The legacy of social partnership

Part 1


The future prospects of “social partnership” remain uncertain. Two decades of boom an accommodation towards co-operative union-management relations have created a union movement institutionalised in the partnership milieu and evidently uncomfortable with, or perhaps sceptical of, the possibilities for an alternative, mobilisation strategy.
     It could still be possible that a national-level social partnership regime may be revived, after the economic recession, in some adapted form. This is likely to reinforce the trajectory of declining union power and influence at both the state and the work-place level. In the absence of a more strategic union organising response, the ensuing model is likely to further reinforce the interests of capital and a higher political echelon in the labour movement to the neglect of the majority of under-represented and increasingly vulnerable workers.
     This commentary evaluates the legacy of social partnership and the general implications of the Croke Park deal.

Growth regime for capital accumulation

Partnership in Ireland was effectually about the state designing national-level structures wherein workers’ pay levels could be regulated and moderated. Initially the regime provided an institutional mechanism wherein Irish capitalism, which had fallen into an economic morass in the 1980s, could be stabilised in order to allow capital to steadily accumulate.
     As figures from the Central Statistics Office testify, this proved a successful strategy. The rate of increase in wages during partnership was considerably below attendant increases in productivity. Certainly real wages rose, but it appears that unit labour costs fell.
     In turn, the share of wages in the national economy fell, and the share of profits rose. From 1960 to 1986 the proportion of the wage share in the national economy fluctuated between a maximum of 80.2 per cent in 1974 and 70.7 per cent in 1986. By 1993 it stood at 67.1 per cent—significantly lower than Britain and the rest of the European Union. By 2001 it had declined to 54.2 per cent.
     In comparative terms, the share of labour in national income was 54.2 per cent in 2001, whereas the EU average was 67.2 per cent.
     Alongside low corporate tax rates, the regime of wage restraint made Ireland a highly attractive venue for international inflows of capital. The social partnership regime therefore complemented the policy of the political and economic elite to “internationalise” the economy and to block internal barriers to economic openness.
     Marxian economics has best explained this phenomenon as the social structure of accumulation, whereby a complex of institutions supports the process of capital accumulation. Whereas traditionally Marxists sought out the conditions that would lead to an imminent collapse of capitalism—under-consumption or a falling rate of profit—Marxian economics has evolved to examine the recuperative power of capitalism through institutional regimes that help provide for periods of relatively rapid and stable expansion, which in time, because of internal contradictions, decay, resulting in stagnation, crisis, and instability, until a new social structure of accumulation can be built.

Policy influence: real or imagined?

Thus, while unions thought they were trading wage moderation for policy input, it followed that, under the logic of partnership as a growth regime for capital accumulation, they would have very little. Indeed while trade union leaders have often made great play of their voice at the policy level during the partnership years, a review of the era demonstrates that such influence by unions was minimal.
     In keeping with the interests of the dominant coalitions, no industrial relations policies were pursued by the Government that would sully the country’s image as an attractive vehicle for foreign investment. Despite much huffing and puffing over the high-profile Ryanair recognition dispute in the late 1990s, union negotiators were unable to induce the Government to design meaningful legislation on collective industrial relations: the resulting Industrial Relations (Amendment) Act (2001), for example, explicitly ruled out the granting of collective bargaining rights.
     A similar illustration of the lack of policy influence was evident when the exploitation of migrant workers emerged. Again, despite the furore over GAMA workers, what did the union movement get from partnership on this issue? An increase in the paltry Labour Inspectorate—a collection of dusty civil servants hidden away in the back rooms of the Department of Enterprise, Trade and Employment whom most Irish workers have heard nothing about before or since.
     Other evidence of supposed “policy influence” likewise shows pitiful results. For example, work with the social partnership community pillar on developing new policies on various economic and social issues, from pensions to child-care facilities, produced little concrete result. Ditto the initiative to promulgate work-place partnership arrangements at the local level, which most commentators now conclude were a failure.
     An EU directive on information and consultation, which would have inserted German-style works councils into the Irish work-place terrain, was heavily undermined and circumscribed by a process of collusion between the Government, civil servants, IBEC, and the American Chamber of Commerce in Ireland.

Uncertain gains

Ultimately, social partnership was about providing an appropriate growth regime for domestic and international capital; and any union moves to hinder such a development would be curtailed. However, capitalist society is complex, and the social processes unleashed within it are frequently contradictory.
     In this regard it would be too simplistic to write off the partnership formula as having delivered nothing for unions, their members, or working people generally. Supporters of partnership, therefore, have often articulated the view that their participation in national wage agreements produced extra money in their members’ pocket and employment.
     Clearly, in terms of real wages, union leaders might argue that social partnership provided benefits to their members; and it is on these grounds that they should be judged. Certainly the evidence suggests that real wages rose more or less continuously during the social partnership era, and only the most ideologically blinkered would deny that the regime coincided with a considerable increase in the living standards of a significant proportion of Irish workers.
     Yet taking real wage increases as a single measure of union success is itself problematic. In all likelihood, pay increases for private-sector workers, particularly those in the foreign-owned sector, would have been higher in the absence of the wage agreements. In the context of the economic boom of the 1990s, for example, taking real wage increases as a measure of union success suggests that they might have delivered more outside social partnership.
     In any case, it might be argued that an emphasis by unions on advancing members’ interests in the arena of market relations, while valid, can be unstable: advances achieved in the economic upswing can readily recede in an economic downswing.
     An equal measure of union success should be the advancement of greater job regulation and worker control over the procedural relations of work-place industrial relations—something that Irish unions have historically ignored. This is to their peril in regard to work-place influence, because such controls can be inherently more intractable and difficult for managements to undermine.
     Finally, partnership might be said to have delivered on the employment front. Again, this might be seen as a good thing; however, we should not exaggerate. Firstly, employment may well have increased without partnership structures in any case, and secondly, an emphasis on employment, generally defined, often tends to play down the quality, type and security of jobs created and in what types of sectors.
     A considerable bulk of the employment created was often in non-unionised transnationals that have since departed our shores or non-unionised casual labour working in sweatshop conditions. This is hardly a cause for celebration.
[NC]

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