Wage reforms ‘could cause poverty’

ENTERPRISE Minister Richard Bruton has been warned that his proposals to reform wage-setting mechanisms could cause poverty for hundreds of thousands of low-paid workers.

A coalition of unions and social justice groups has written to Mr Bruton, calling on him to release the economic analysis behind his proposals to reform the joint labour committee (JLC) mechanisms.

The coalition includes SIPTU, UNITE, Mandate, the Communication Workers’ Union, the National Women’s Council, the Migrant Rights Centre, the Community Platform and the Anti-Poverty Network.

Mr Bruton’s proposals are set to be discussed by the Cabinet today, but it is thought no decisions will be announced until after Taoiseach Enda Kenny and Tánaiste Eamon Gilmore address an Irish Congress of Trade Unions conference next week.

In its letter to the minister yesterday, the coalition said JLCs protected the wages and conditions of hundreds of thousands of Ireland’slowest-paid workers.

Mr Bruton has suggested that “radical overhaul” is necessary to help reduce costs for businesses and to encourage them to hire more people.

But the coalition has taken issue with that claim, and is demanding to see the research underpinning Mr Bruton’s argument.

In its letter, the coalition said European Commission research from 2008 showed hourly labour costs in Ireland’s hotel, restaurant and retail sectors were 6% below the average of other EU countries.

“Since then, Irish labour costs have fallen while in the remainder in Europe they have increased — meaning that we have fallen further behind the European norm,” the coalition wrote.

The group also asked how reductions in labour costs would save jobs when this has not happened to date.

“In the last two years, labour costs have fallen by between 4% and 5% in the retail and hospitality sectors. But during that period businesses have closed and workers have lost their jobs. Yet you insist that cutting wages even further will create jobs.”

The coalition also warned that consumer spending will fall even further if wages are cut.

“Given that the low-paid spend almost all their income, every euro taken out of their pocket means one euro less in the tills and cash registers of businesses.”

The coalition said the premium for working Sundays was “already low by EU standards”, and challenged the minister to produce analysis which demonstrated otherwise.

“We urge you to publish the data and analysis that informs your proposals.

Under the last government, we had too much policy-making based on unsupported assertions. In many instances, policy operated in a fact-free zone.

“We hope you will agree that policy-making that is not rooted in evidence is like flying blind in a storm without radar. Recklessness is the last thing we need in this crisis. Look where it has got us today.”

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