WORKERS will demand significantly larger pay increases in the 'second-half' of the Sustaining Progress national pay agreement next year after an International Labour Organisation (ILO) report found that, in 2002, Irish workers closed the productivity gap with workers in the leading economies of US, France and Belgium.

The biennial ILO report found that Ireland's productivity, or output per worker, had increased by 2.2% between 2001 and 2002, well ahead of the 1.2% increase in the EU and the 1.1% increase in Japan. In cash terms, output per Irish worker increased to $52,486 in 2002, which makes us the third most productive workers in the world behind the US at $60,728 per worker and Belgium at $54,338. The UK and Germany were back the field with outputs per worker of $42,000 to $45,000.

Eamonn Devoy, secretary of the private-sector committee of ICTU and assistant general secretary of the TEEU, said that the ILO report bolstered manufacturing workers' claim for a larger slice of company profits than they got under the 'first-half' of the Sustaining Progress national pay agreement. Workers agreed to a 7% increase phased in over 18 months or over 4.5% per year.

A substantial minority of private-sector unions in ICTU were unhappy with the 7% over 18 months, complaining that they were bounced into the deal at the 11th hour largely by the powerful public-sector unions who were getting the average 9% benchmarking award on top of the 7%.

"We will be pushing for pay increases significantly in excess of the 7% for the first 18 months ofthe three-year deal when talks open on the second-half of the national pay deal in the new year, " said Devoy.

However, Brendan McGinty, HR director of IBEC, said there was "no question of larger pay increases" being conceded, particularly given the current environment in which the country was losing 500 jobs a week in the manufacturing sector. If the unions were going to push for larger pay increases, he said, he would question whether they had their members' real interests at heart. Pay increases above Ireland's main trading partners "cost us jobs". Wages in Ireland grew by 6.2% last year against a Eurozone average of 3.8% and just 1.7% in Germany, he said.

The reported increase in productivity among Irish workers takes no account of sectoral variations, said McGinty, and while some sectors, such as pharmaceuticals, are doing well and pushing up the average, other sectors are "on their knees" and would go out of business if forced to pay above the norm increases.

McGinty also pointed to the reduction in hours worked among Irish workers in 2002 in the ILO report as reflecting the downturn that hit that year.

Irish workers are working less and less hours, dropping from around 1,900 annually in the 1980s to 1,668 in 2002, although this is in line with trends in all developed economies. Indeed, the report points out that the persistent drop in hours worked over the last number of years in Ireland "provides a good example of the changing pattern in working hours that occurs when an economy moves through the developmental process".