Freeze our minimum wage for years, say employers
IBEC say rate is costing jobs
Published 21/07/2010 | 05:00
EMPLOYERS want a lengthy freeze of the €8.65-an-hour national minimum wage to bring it in line with EU rates.
In some EU countries -- including the UK -- the minimum wage is more than 20pc lower than here.
Employers body IBEC said it wants the rate to remain the same for a "substantial" period of time, until comparable wage rates in other European countries rise to the same level.
It is also seeking the abolition of agreements which set minimum wage rates in a variety of sectors, including hairdressing, retail and contract cleaning.
It claimed these rates, agreed by union and employer representatives on Joint Labour Committees and sanctioned by the Labour Court, are pushing up prices, costing jobs, and putting businesses at risk.
The group also said social welfare rates and benefits should be "adjusted" as they were preventing workers from taking up jobs.
IBEC director Brendan McGinty told an Oireachtas committee that the national minimum wage is the third highest in the EU, after Luxembourg and France.
He pointed out that businesses in the UK have a particular competitive advantage because of its lower minimum rate of €6.80 an hour.
He told the Oireachtas Joint Committee on Enterprise, Trade and Employment that the UK rate was over 30pc lower than the Irish rate when sterling was at its weakest last year.
"If Ireland is to become competitive again in the EU market, and in particular against the UK, all of our wage rates -- including the national minimum wage -- must revert towards the average rates in these countries," he said.
However, equality think tank TASC argued that a cut in the minimum wage would be a double strike against economic recovery.
TASC Director Paula Clancy said any cut in rates would take more money out of people's pockets and this, in turn, would affect businesses and job creation.
"Instead, TASC argues that the best way of protecting and creating jobs is to take steps to boost demand in the economy," she said.
She said lowering minimum rates would reduce income tax, income levy, PRSI and VAT receipts, and would have a negative impact on the public finances.
Ms Clancy said it would cost the Exchequer €1,143 per worker if Joint Labour Committee rates were slashed from €9.27 an hour to the minimum wage rate of €8.65.
Retail union Mandate branded IBEC's call for a minimum wage freeze "irresponsible" and said comparing the rate with those in other European countries was like "comparing apples with oranges".
"Our VAT rate is higher, our cost of living is higher and our income tax is lower," said Mandate general secretary John Douglas.
He said the National Competitiveness Council's report last January said the main challenges for competitiveness are the high costs of utilities -- including energy costs, waste charges and commercial rates.
Sinn Fein deputy Arthur Morgan said taking the Joint Labour Committee minimum rates "off the page" would create "yellow pack" employment.
At a separate Committee on European Affairs, IBEC argued that the introduction of amending legislation on an EU directive would cost employers €90m a year.
It said a section of the Working Time Directive that means employees absent for long periods of sick leave should get annual leave, would be an expensive "windfall" for a small number of workers
The Irish Congress of Trade Unions said the Minister for Enterprise, Trade and Innovation was denying workers the benefits enjoyed by EU colleagues by failing to introduce the legislation.