PLANS to increase the National Minimum Wage have been met with divided opinions by a number of business groups.
The Small Firms Association has condemned the Low Pay Commission’s recommendation of an increase in the National Minimum Wage.
Linda Barry, SFA Acting Director, said “There is no justification for any increase in the National Minimum Wage at this time. Small firms, many of which have yet to feel the economic recovery, have been further destabilised by Brexit. On behalf of the small business community, the SFA calls on the Government to reject the increase proposed by the Low Pay Commission.”
“Small businesses are the backbone of the Irish economy, accounting for 98% of all businesses and half of private sector employment. Small firm owner-managers have identified wage inflation as the biggest threat to their businesses in the coming year. The recommendations of the Low Pay Commission are out of touch with the reality that these businesses are facing. Additional cost pressures will put jobs in small firms in jeopardy,” Barry continued.
“Many small companies will give pay rises this year, but the minimum wage must take into account the situation of the most vulnerable businesses. Brexit-related exchange rate movements have already left Irish firms 19% less competitive in the British market than they were in December 2015. Competitiveness is crucial if small businesses are to maintain and create jobs – the Irish minimum wage is already 6% higher than the UK equivalent and an increase will only make the situation more challenging,” Barry concluded.
The Restaurants Association of Ireland say that an increase in the minimum wage will have a disproportionate negative impact on rural restaurants and the rural economy which is yet to see signs of recovery like that of urban areas. If the recommended increases are accepted, the RAI predict restaurant closures in rural and border counties.
Trade union Unite has slammed what it termed an “insulting” recommendation by the Low Pay Commission.
If this recommendation is accepted by the Government, the lowest-paid workers will suffer a real pay cut after inflation at a time when profits in some low-paid sectors have been soaring.
Commenting, Unite Regional Secretary Jimmy Kelly said:
“The Low Pay Commission has missed an opportunity to use the National Minimum Wage as a strategic tool to start ending the scandal of low pay and ensuring that no-one earns below the Living Wage.
“Instead, at a time when some low-paid sectors – such as hospitality – are booming, with profits over 40 per cent above pre-crash levels, workers are being told that they are worth just 10 cent more. That is an insult to low-paid workers.
“The recommendation makes almost no progress on bringing low-paid workers up to the Living Wage: instead, it may actually drive workers further into poverty, since they will suffer a real pay cut after inflation.
“Unite is urging the Government to reject the Commission’s recommendation and announce a real increase in the Minimum Wage – thus telling low-pay employers that poverty pay is not OK”, Jimmy Kelly concluded.
