Business group: Minimum wage hurting jobs growth

A leading business group has called for the “blunt instrument” minimum wage to be scrapped to help kick-start the economy, saying the legal pay level is stopping firms employing new staff.

Irish Small and Medium Enterprises (ISME) chief executive Mark Fielding made the claim during an Oireachtas jobs committee meeting yesterday, as a separate business group said it is too soon to raise pay rates.

Mr Fielding told the cross-party body he is aware of small businesses that are “holding off” on employing more staff as they will not be able to afford any potential increase on the €8.65c per hour minimum wage.

He said this shows the pay level is damaging job growth and should be removed as it has not stopped poverty increases since being introduced in 2000, adding the low pay commission should instead focus on income tax credits to encourage people to come off the dole.

Amid ongoing calls for the minimum wage to be increased as the economy stabilises, and with Siptu recently saying a 5% jump is needed, separate business group Ibec said such a move is too soon and will hamper instead of help families because it could damage the national recovery.

However, Sinn Féin senator David Cullinane responded that the only way to create a “sustainable economy” is by ensuring “decent work for decent pay”. He said the minimum wage must be protected as it has not been raised since 2007.

The comments came as Government was accused of acting like “Nero, fiddling while Rome burns” by Independent TD Maureen O Sullivan during a Dáil debate on social deprivation.

People before Profit TD Richard Boyd Barrett’s motion called for the abolition of water charges, property tax, and the universal social charge for people on €35,000 a year.

He said one-parent family payment and child benefit cuts should be reversed and that future budget decisions should must undergo poverty impact assessments, among other matters.

Mr Boyd Barrett referenced CSO, Unicef, and Barnardos reports showing twice as many children live in poverty now than in 2008.

However, in a counter-motion, minister of state Ann Phelan said the Coalition’s policies have created 84,000 jobs since early 2012.

She said an “enormous” €4.25bn would be needed to pay for Mr Boyd Barrett’s reforms, and that there are “no proposals” on how this would be funded.

She said such changes “risks further instability” and could lead to more difficulties that “would be felt by everybody”.