Government has lost the plot on minimum wage : SFA
The Government’s intention to introduce a €7 minimum wage payment from next February has led to claims that it has ‘lost the plot’ on wage competitiveness.
The move would result in Ireland having the third highest minimum wage payments behind the Netherlands and Luxembourg, according to the Small Firms Association.
This would place Irish labour charges at twice that of Spain and Greece while being nearly five times that of Hungary, leading to fears that employers may freeze or cut-back on employment.
SFA chairman Pat Delaney said a recent survey by the business group found that 26% of respondents cited minimum wage payments as a major problem for their business.
He also said that Ireland was in danger of pricing itself out of the future labour market particularly as European Union expansion will lead to increased competition from lower cost economies.
"From next February the Irish rate of €7 per hour will be 25% higher than the rate in USA, Canada, Japan and Germany. Are we really telling ourselves that we are so different from the rest of the competitive world that we can afford to spend wealth before we create it!
"It is not the job of business to redistribute wealth, but to create wealth which can be redistributed by Government.
"A minimum wage that is higher than the strongest economies in the world simply allows the Government to renege on its responsibility for social equity which should be achieved by prudent management of expenditure and tax reform not by making people unemployed," Delaney said.
