Jobs Minister Richard Bruton has dismissed calls for a “living wage” for the lower paid and said tax cuts are a priority for workers to help boost the economy.
The Fine Gael minister’s comments clash with Labour’s Joan Burton, social protection minister, who wants employers to give top-up pay to low-paid workers under a living wage system.
In an interview with the Irish Examiner, Mr Bruton also outlined his department’s priorities for job creation in 2014.
A living wage system, which operates in London, provides a minimum income for a worker to meet basic needs including housing, clothing, and nutrition. It is higher than the minimum wage and Ms Burton says it would reduce the numbers reliant on welfare payments, such as the family income supplement.
In the British capital, employers pay the living wage on a voluntary basis where it is currently set at £8.80 (€10.55), compared with £6.31 (€7.56) for the minimum wage.
However, Mr Bruton indicated that his Cabinet colleague’s suggestion had raised alarm bells.
“When we look at these things, if they add to the costs of employment, we have to put up a flare,” he said. “This is something we have to be careful about. We have to look at the implications.
“You don’t want to find that you lock out certain areas from manufacturing/production jobs, that you close out the possibility of locating certain types of sectors in certain parts of the country. I don’t think that’s a wise strategy. I think we have to be cautious about anything that adds to cost and hampers our ability to win across all sectors of employment.”
The Dublin North Central TD said that job creation was the focus and that emigration was still at 25,000 annually. Forfás, his department’s jobs advisory agency, had also recently identified that labour costs were beginning to rise in Ireland, added the minister. “We are a low wage economy. We want to build a strong production base, to build on manufacturing. That does depend on wage competitiveness and cost competitiveness.”
He said he was “extremely supportive” of changes to the tax regime where the higher rate kicks in at €32,800 for workers.
Mr Bruton also shrugged off a suggestion he was a “leader-in-waiting” for Fine Gael and said the issue of him challenging Enda Kenny for the party leadership in 2011 was in the past.
Asked whether Fine Gael and Labour should share a platform going into the next general election, he did not rule it out and said it would be an issue for the two party leaders.
© Irish Examiner Ltd. All rights reserved