Private sector workers in unionised companies should seek wage rises of at least 3.4 per cent next year, the Irish Congress of Trade Unions (Ictu) has urged.

In a bulletin to affiliate unions representing staff in the private sector, it suggestedthat they look for larger rises in more profitable areas.

However it warns that the cost of accommodation and childcare could mean that that the suggested levels of wage increases would not be sufficient to maintain living standards.

“As such, it is the view of the private sector committee (of Ictu) that unions should seek – where possible and appropriate pay increases that would adequately compensate workers for excessive costs they are currently facing.”

In its guidance to member unions, the private sector committee of Ictu says the Irish economy is not overheating and that there is “some remaining slack in the labour market”.

It said that there is potential for further strong employment growth. “The strengthening labour market should facilitate stronger wage growth in the short-to-medium term”, it says.

The report says that conditions are improving in the private sector with weekly earnings up 3.6 per cent in the year to the third quarter of 2018 with hourly earnings up 2.2 per cent.

The Ictu document says that labour costs in the Irish private sector are the second lowest among the group of 10 high-income EU countries with a population of more than 1 million.

It says workers in Ireland have had to endure extremely high costs of childcare compared to other OECD countries and that this is a barrier to labour market participation.

It says that while much greater medium-term investment in childcare is required, higher wages in the short term are also needed to ensure that workers can remain in the labour force despite these costs. It says this is a particular issue for low-wage workers.

Ictu says that unions in the private sector would be justified in seeking baseline pay rises of at least 3.4 per cent in 2019.

“In addition where sector specific or enterprise specific performance is above the average for the economy,unions should take this into account when formulating wage claims.”

It says consideration should be given also to other non-pay benefits that may acrrue to workers on foot of negotiations.

“However factors such as accommodation and childcare mean that this level of increase will not be sufficient to improve the living standards of workers.”