Isme turns up heat on minimum pay rise

Business group Isme has upped the heat in the row over a raise in the minimum wage, saying it wants three employer representatives on the Low Pay Commission to step down as their membership was “now futile”.

The Low Pay Commission recommended the minimum wage would rise by 30c per hour. That will mean the lowest paid will receive €9.55, or an extra €12 for a 40-hour week, according to advisory group Peninsula Ireland.

But Isme said that despite the dissenting votes of the employers, the Low Pay Commission “could cite no objective evidence” in its arguments for a 3.2% increase.

“The phenomenon whereby increased minimum wages do not translate to increased earnings for workers has been well researched as late as last year, in a detailed study of Seattle’s minimum wage increase by the University of Washington,” said Isme chief executive Neil McDonnell.

“This found that increasing the hourly minimum wage had little effect on the earnings of low-paid workers, because their worked hours fell, or in some cases they lost their jobs.

“Where wages were rising, there was little correlation with the minimum wage increase: Where labour is in demand, wages will rise even in the absence of a minimum wage”.

Isme said there was no point in the employer representatives continuing to sit on the commission, which it described as a “political charade”.

Alan Hickey at Peninsula Ireland said employers should prepare now for the introduction of the wage increase.