Anger over plans to cut minimum wage
Published 22/11/2010 | 05:00
THE Government is set to face a storm of protest over its plan to cut the minimum wage by 13pc -- while reducing payments for those out of work by just 5pc and leaving pensioners untouched.
The minimum wage is set to be cut from €8.65 to €7.65 in an effort to reduce the cost of paying and hiring workers for employers. But the measure, to be announced in the Government's four-year budgetary plan this week, sparked warnings that it will act as a "disincentive to work" last night.
If the cuts are implemented, a worker doing 39 hours a week on the minimum wage will get €298.35 before tax, while someone on jobseekers' allowance will get around €186.20 (down from €196) -- as well as potentially qualifying for other benefits such as a medical card, rent supplement, fuel allowance and free third-level education for their children.
Finance Minister Brian Lenihan moved yesterday to lay the ground for a cut in the minimum wage by saying it had been "increased far beyond the rate of inflation" in the past decade.
"Clearly it's an issue that has to be addressed by an Irish Government," he said.
The minimum wage here is the second highest in the European Union and higher than the rate in Britain, which currently stands at £5.93 (€6.92) per hour.
But SIPTU general secretary Jack O'Connor said cuts in the minimum wage did not offer any meaningful contribution to the resolution of the economic crisis.
"Brazenly, they [business leaders] are exploiting the weakened position of the Government to oblige the most vulnerable in society, and middle and lower-income families, to shoulder the burden of adjustment while they escape scot free," he said.
Mr O'Connor called for a big turnout at next Saturday's "March for a Better Way" protest in Dublin -- the largest of its kind by the trade union movement this year.
It is being organised by the Irish Congress of Trade Unions, which has said that a big turnout would force the Government to re-think its "quick fix strategy".
Labour social protection spokeswoman Roisin Shorthall said she was very concerned about the Government's plans to make people on very low incomes pay the price for its own "mishandling of the economy".
She warned that if the minimum wage was cut, it could act as a disincentive to take up employment.
"We have to ensure that it's worth a person's while to go out to work. If a person is earning just over €8 an hour, they are not exactly rich," she added.
Ms Shorthall said her party wanted to reform the €500m rent supplement scheme, so that people did not instantly lose their state rent payments as soon as they got a job.