People are unwilling to take up any more than 18 hours of paid employment because they want to protect their social welfare benefits, according to the president of the Cork Chamber of Commerce, John Mullins.
Mr Mullins, who is leaving as head of Bord Gáis at the end of the year, told the chamber’s business breakfast yesterday that across Cork, people were refusing to work for any more than 18 hours.
“As employers we need to be worried. And I know, [from] speaking to a lot of SMEs, particularly those in the hospitality trade, that trying to get people to take on full-time employment, you find that people come in and they want to work 18 hours. Why? Because they want to hold on to welfare benefits,” he claimed.
Mr Mullins criticised the budget for failing to hit those earning over €100,000. He said scrapping the PRSI allowance is going to be a major issue for anybody earning up to €40,000 a year.
“People like myself who earn over €100,000 were expecting, and we were softened up, to see a universal social charge introduced at 1% or 2%.
“The movement on the PRSI exemption for all employed is a bit of an issue and it may not be an issue in terms of what is in people’s pockets.
“It could be an issue in trying to motivate people to try and take up employment. It could become an issue to try and motivate people to stay in employment, and that is a critical issue, in the context of people who are working between the minimum wage and anything up to €30,000 and €40,000.”
What is needed, according to Mr Mullins, is to cut an individual’s social welfare allowance over time to force them to return to the workplace.
“It is vitally important that we make sure that there is some form of mechanism that entices 15% of those that can work back into the work place.
“In fact, even if it was a graduated reduction in welfare entitlements, 50% to 33% to 20% over a period. Any of you who have had the experience of having a conversation with people coming in off the street saying, ‘I will do 18 hours and the reason why I will only do 18 hours is that I want to retain my social welfare benefits, because I basically want to be on welfare for the rest of the week.’”
The cut in PRSI will create what Mr Mullins described as a “motivational gap” between working people and the unemployed.
“PRSI movement last week, because it was not staged over a number of years, is certainly going to create a larger gap between welfare and work, and that is a motivational gap and that is a critical issue for us as employers.”
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