Wage deal bad for the economy, says ISME

ISME, the independent lobby group for small to medium companies, warned yesterday a heavy price will be paid for the new wage deal singed off on by employers and trade unions on Monday.

ISME said the new pact was “a bad deal for small business, a bad deal for the economy, a bad deal for democracy but a good deal for the public sector unions and CORI”.

The association warned that this ‘agreement at all costs’ would have serious repercussions for Irish competitiveness and the overall welfare of the State.

Attacking the pay element in particular, ISME boss Mark Fielding warned pay increases of 4.5% annually, almost twice the EU average, were not feasible and would damage competitiveness and force firms to shed jobs or close down.

“It is beyond comprehension that these rates, negotiated by the subservient, weak-kneed negotiators in IBEC, provide for no initiatives that would help to introduce a comparable increase in productivity. This is economic madness and will lead to a further undermining of the competitiveness of the economy,” said Mr Fielding.

“The control of costs is pivotal in the current economic environment and many small businesses simply do not have the resources to meet these increases,” he said.

“To add insult to injury, the ‘Partners’ have agreed to increase the minimum wage, a significant increase in social welfare entitlements and a green paper on pensions, which will lead to mandatory pensions raising its ugly head in the next 12 months.”