ICTU cites 18.9% inflation over four years as workers’ purchasing power erodes
The Irish Congress of Trade Unions (ICTU) has demanded pay increases of up to 6% for next year, citing sustained inflationary pressures and erosion of workers’ purchasing power over recent years.
ICTU recommended private sector unions seek pay rises between 4.7% and 6%, pointing to the consumer price index rising 18.9% over the past four years—significantly outpacing wage growth and diminishing household living standards.
Recent inflation figures show prices rose 3.2% in November, up from 2.9% in October, demonstrating persistent cost pressures affecting millions of workers.
“The unions have no choice but to include this in their pay negotiations for next year,” ICTU stated, criticizing the government for allocating €700 million in aid to the hospitality industry while failing to provide adequate tax breaks for workers.
ICTU also recommended unions seek additional non-wage benefits tailored to employers’ profit levels and competitive positions, including pay increases for new entrants, guaranteed weekly working hours, reduced working hours, additional annual leave, enhanced sick pay benefits, and improved pension provisions.
The guidance was issued unanimously in conjunction with the ICTU Private Sector Committee. General Secretary Owen Reedy emphasized that “in a time of full employment and a strong economy, it was essential for workers to seek to maintain and improve their living standards through collective bargaining.”
The Financial Services Union (FSU) strongly supported the position. FSU General Secretary John O’Connell argued that low-paid workers deserved pay increases above inflation rates.
The demands come as Ireland experiences strong economic growth, record corporate tax receipts, and near-full employment—conditions unions argue should translate into meaningful wage improvements rather than continued real-terms pay cuts through inflation.
Workers across sectors face mounting cost pressures from grocery inflation hitting 6.5%, motor insurance rising 9%, housing costs increasing, and electricity bills set to rise with grid upgrades. The cumulative impact has strained household finances despite nominal wage growth.
The ICTU position sets the stage for 2026 pay negotiations across private and public sectors, with unions signaling determination to recover purchasing power lost over recent inflationary years.
Employers may resist substantial pay increases, citing competitive pressures, input cost increases, and economic uncertainty. However, unions argue that corporate profitability, particularly among multinationals, remains strong and can accommodate fair wage growth.
The 4.7-6% range reflects different sectors’ capacity to pay while establishing a clear expectation that wage increases must significantly exceed current inflation to compensate for previous real-terms losses.
Public sector workers, who have seen pay increases constrained under centralized agreements, may also seek substantial rises, potentially creating fiscal pressures on government budgets despite strong tax revenues.
The stance reflects growing worker militancy amid cost-of-living pressures, with unions leveraging tight labor markets to press for meaningful improvements after years of restrained wage growth relative to inflation and corporate profits.