Minimum wage ‘threatens recovery’

IRELAND is not actuallyemerging from recession – with the minimum wage keeping the economy uncompetitive – according to a new survey of accountancy professionals.

The survey of more than 500 accountants, from the Institute of Certified Public Accountants, showed that 60% of respondents believe the current minimum wage of €8.65 per hour is making Irish business uncompetitive.

More than half either disagreed with, or strongly opposed, the notion that Ireland is emerging from recession and that the economy is primed for growth.

The minimum wage issue has already been raised by various industry representatives, with calls from the hospitality sector for a 10% reduction in order to guard against forced job cuts due to high costs.

Only 20% of respondents to this new report said that the introduction of the minimum wage has had a significant impact on their business. However, half also said that they did not expect to employ more people in their company even if the minimum wage level was reduced.

The institute has called for “urgent action” to be taken in order to ensure a competitive operating environment for business.

This action could, it added, include reductions in the cost of utilities and services and the relieving of the administrative burden on small businesses. More than 80% of respondents to the new survey were from small firms.

“Ireland is a small, open economy with a relatively small population, but our size can be our strength as it bestows on us agility and adaptability. In order to adapt and innovate, concerted action is required on costs, infrastructure improvements and continued measures to encourage innovation, research and development,” said Geoff Meagher, president of the Institute of Certified Public Accountants.

“Improving Ireland’s export performance and raising productivity across all areas of the economy are the only sustainable strategies for securing long-term prosperity and creating jobs,” he added.

The institute recently addressed the Dáil Committee on Economic Regulatory Affairs and made the point that the Government had failed to act on recommendations of high-level review groups, which had added to the regulatory and administrative burden on SMEs.

Mr Meagher added: “Over 90% of businesses in Ireland are either micro, small or medium enterprises. These companies are critical to our economic recovery and deserve to be supported.

“It’s important to recognise that even small changes to ease the administrative burden can make a meaningful difference to the viability of a business.”