Chambers of Commerce oppose minimum wage rise

The Chambers of Commerce of Ireland (CCI) reiterated a call today not to increase the minimum wage in Ireland.

Speaking this morning, CCI Chief Executive John Dunne said: “We strongly oppose the latest increase sought by ICTU which, with the possible exception of Dublin, is way out of line with market clearing rates in the rest of the country and, as such, will lead to a combination of more “grey economy” jobs and less overall employment.”

“Any increase will impose a further burden on the already struggling SME sector. The rules specifically say that increases in the minimum wage will not be used to justify additional claims for pay rises. In practice however, particularly in SMEs, it is creating an inflationary impact in wage negotiations.

"The minimum wage was increased by 10% less than 12 months ago and with inflation running at 2.6%, another increase in the minimum wage level is not necessary at this stage.”

CCI also recommended that the overall approach to reviewing the minimum wage level must change.

“CCI has backed the minimum wage as a measure of social solidarity but it was never intended to be an instrument of wealth redistribution and there are several problems in the way in which it operates,” Dunne pointed out.

“Future amendments in minimum wage levels should only take place at the beginning of each national wage agreement,” Dunne argued.

“The level should be fixed at that time and should only be changed in line with the terms of the national wage agreement throughout the life of that agreement. Furthermore, the principle that the minimum wage can be adjusted up or down depending on prevailing economic circumstances must always apply.”

“Because the minimum wage has already increased by 10% over the term of this agreement it should not increase again until 2006,” he said.