Business Irish

Monday 18 November 2019

Retailers hit out at minimum wage increase

Taoiseach Leo Varadkar with Tanaiste Frances Fitzgerald and Finian McGrath at the announcement regarding the minimum wage at government buildings. Photo: Damien Eagers
Taoiseach Leo Varadkar with Tanaiste Frances Fitzgerald and Finian McGrath at the announcement regarding the minimum wage at government buildings. Photo: Damien Eagers

Cillian Sherlock

Business groups have claimed there is "no economic basis" for a 30 cent per hour increase in the minimum wage as Brexit looms on the horizon.

Taoiseach Leo Varadkar yesterday announced the wage will rise to €9.55 from January 1 on foot of recommendations from the Low Pay Commission.

"It's an increase well ahead of inflation, well ahead of average wage growth in the economy. It is modest. It works out at about an extra €12 per week but it is still an important step in the right direction," he said.

It will be the fourth increase in the past five years and will benefit at least 150,000 workers.

While the move was welcomed in political circles, Retail Ireland warned it could impact on jobs in the sector.

Its director Thomas Burke said: "With little to no inflation in consumer goods and growing concern over the impact Brexit is already having on the retail sector, there is absolutely no economic basis for a further increase to minimum wages.

"Such a rise at this juncture would significantly affect retailers' ability to remain competitive against a backdrop of falling prices and rising costs within the sector."

IBEC went further, calling on Tánaiste Frances Fitzgerald, who will oversee the changes, to delay their implementation.

The body argued the minimum wage here is already one of the highest in the EU, and will be 12pc higher than that in the UK.

Ms Fitzgerald said the increase brought the Government closer to a target of eventually raising the wage to €10.50.

"It offers support to people and creates better opportunities to benefit from a better wage," she said.

Responding to the news, Fianna Fáil enterprise spokesman Niall Collins said: "Workers need a pay rise to keep pace with the increasing cost of living in Ireland, but businesses too must be supported to improving their competitiveness to ensure that employment numbers increase.

Spiralling

"High rents, spiralling childcare costs and indirect taxes are placing a huge burden on workers struggling to meet financial commitments," he added.

"Supporting workers on low pay must go hand in hand with supporting small SMEs who will have to fund any pay increase. These employers must be supported to absorb the cost of pay increases in a way that doesn't harm their competitiveness."

Trade union United welcomed the rise, but said it was still over €2 short of the Living Wage.

Irish Independent

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