Business Irish

Monday 22 January 2018

IBEC: Minimum wage rise bad for economy

IBEC, the group that represents Irish business, has said the government's plan to reverse the minimum wage reduction was at odds with the economic needs of the country and would undermine job creation.

The group also said a total overhaul of regulated wage rules was needed. The two issues form part of the ongoing review process by the EU/IMF teams in Dublin.

IBEC Director of Industrial Relations and Human Resources Brendan McGinty said: "If Ireland is to recover, labour costs right across the economy need to come back into line with those of our competitors, including the minimum wage. At the increased rate of €8.65 the minimum wage would be nearly 30pc ahead of the rate in Britain and the North.

"Increasing the rate will make it even more difficult for companies to compete and create jobs, including those in sectors not covered by ERO's and REA's.

"With 440,000 on the live register, it is the wrong approach and sends out a very negative message internationally about how Ireland is dealing with its very serious economic challenges.

"Current wage rules are putting viable businesses in jeopardy. Many of Ireland’s regulated wage rates are too high by international standards and are a major obstacle to job creation.

"A complete overhaul, rather than a tinkering with the system is required. Many of the affected sectors, such as retail and hospitality where labour amounts to 60pc of domestic input costs, have already been hammered by the economic crisis.

"Antiquated wage rules are making matters worse. The ERO system in particular should be abolished."

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