A Summer of Discontent

By John Spain

THOSE of you who are old enough may remember a turbulent period in recent British history called the Winter of Discontent. It was the winter of 1978–’79, and the discontent was seen in a series of widespread labor strikes across the U.K. that winter by trade unions looking for substantial pay rises for their members.

The reason the unions were so demanding at the time was that a Labor government was in power in Britain, led by the personable but not very competent James Callaghan (his nickname was Sunny Jim because of his sunny disposition when faced with difficulties).

The British economy was struggling badly then and Callaghan, even though he was a Labor prime minister, saw it as his duty to resist high wage demands so that business and jobs would be protected.

The unions, mainly those representing workers then in the state sector like mining, railways, water, garbage collection and so on, regarded the Labor government as their government, and when Callaghan stood up to them they were outraged. The result was that strikes paralyzed much of Britain that winter.

There were violent clashes between workers and the police, and in London a long strike by garbage workers meant that uncollected refuse piled up in the streets and public parks. The pictures in the papers of the mountains of rubbish seemed to sum up the decline of Britain.

Even the gravediggers went on strike and burials were seriously delayed. The phrase Winter of Discontent (borrowed from Shakespeare) was used repeatedly in the papers as the misery went on that cold winter.

The result for Callaghan’s Labor government was disastrous. Even though the strikes were over by the spring of 1979 his government was seen as ineffective, and Margaret Thatcher and the Conservatives were swept to power in the election that followed. One of her main policies was tackling union power which she did soon after getting into government with a raft of legislation restricting union action.

Why the history lesson? Well, they say you should learn from history. And when I look around at what’s happening here now, I see some uncomfortable parallels.

We’re coming up to an election, tens of thousands of state workers (the nurses) are looking for more money and threatening strikes to get it, and there is a general feeling of dissatisfaction in the air.

It’s not on the same scale as what happened in Britain 40 years ago. But the mood of discontent in the air is palpable.

Could this be Ireland’s Summer of Discontent? Could Taoiseach (Prime Minister) Bertie Ahern lose power as a result?

So far only the nurses are in open conflict with the government. But the medical consultants (the senior doctors) are shaping up for a dispute as the government tries to force them to work harder for the huge earnings they get. If the nurses get their way, other health workers paid by the state are also likely to join in.

And that’s just the hospitals. There is a long line of other workers who are also unhappy with their pay levels.

They feel that much of their Celtic Tiger prosperity is now being eaten away by huge rises in the cost of living. The result is that wage demands across the economy look set to rise, and the general mood of unhappiness could threaten the government’s hopes of being re-elected.

The most recent figures show that inflation here has now reached an annual 5.1%. And of course interest rates are still on the way up which adds to the pressure.

Homeowners here have been hit by a 47% increase in mortgage repayments over the past year, not easy to cope with when you borrowed to the absolute maximum to get on the property ladder.

State workers always see the run-up to an election as an opportunity to force extra money out of the government. Given the way inflation here is creeping upwards, the government would like to tighten public spending to curb inflation in the coming year. But two of the two key teaching unions here are now backing the nurses in their claim for better pay and conditions.

Everyone has sympathy with the nurses they want a 35-hour week, although in practice that will mean not that they will work less hours but that more of their working week will be overtime. And that will push up their wages bill.

There are many other workers, not just in the state sector but in the private sector as well, who are watching this situation develop. As one reporter here put it, Ahern is now facing a long, hot summer of industrial disputes which could severely damage the government’s chances of being returned to power for a third consecutive term after the election which is expected to take place next month.

Business leaders are already warning of massive dangers if this kind of wage spiral sets off here we are already losing jobs to low cost countries. The perception out there that jobs are on the line is also worrying people and damaging the government, although it is not stopping workers from trying to keep up with inflation.

This is the core of the problem, the increases that most workers have got have been almost totally wiped out by dramatically increased inflation. Everything seems to be expensive here, and even hardworking families are finding it hard to keep up.

This perception is supported by the official figures. Prices in Ireland have been rising at twice the rate of the rest of the Eurozone.

There is another reason why all this is causing concern here. To stop one group of workers leap-frogging another in a never-ending wages spiral, the government uses a system called bench-marking for setting the overall rate of pay increases for workers in the state sector. Any deviations have to be proven as special cases.

This has worked particularly well in avoiding disputes and strikes in the public sector, but it has come at a price. Over the last 10 years or so, benchmarking has delivered annual increases of an average 5% to state workers.

That’s 5% a year every year, and it comes on top of their guaranteed jobs and secure pensions. Private sector workers here, many of them in companies which have to face fierce international competition, can only look on in envy.

And of course, the public sector in Ireland — workers paid by the state — is huge, now between 15% and 20% of the entire workforce. Which means that every five private sector workers are paying the wages of a state employee. And what that means is that if public sector wages go out of line, it costs everyone else heavily.

Given the jobs being lost to other countries and the fast emerging property slump, it seems like good news is in very short supply for Ahern right now.

A testy, impatient and irritable electorate could well turn on him, especially if we do find ourselves heading into strikes, disruptions and a summer of discontent.