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Scrap minimum wage, says ISME

the Irish Small and Medium Enterprises Association (ISME) has called for the minimum wage to be scrapped.

Isme chief Mark Fielding said the wage, currently at €8.65, has done little to eradicate poverty.

He called on the low pay commission to concentrate its efforts on projects that would help to boost job creation, rather than "finding excuses to increase" the wage.

Isme said CSO figures on income and living conditions show that consistent poverty has increased since 2004, and deprivation rates are steadily increasing despite a 55pc increase in the National Minimum Wage since its introduction in 2000.

Mr Fielding told the Oireachtas Finance Committee that the "blunt instrument" of a wage and the resultant knock-on effects of pay hikes will cut employment.

"Given the still-fragile nature of Ireland's economic recovery and the very difficult environment for most SMEs, the notion of increasing the National Minimum Wage, which would have a push-through effect on wages up the line, does not make any sense," Mr Fielding said.

"It would increase the cost base for business and would undermine the cost competitiveness of the economy.

"It would fly in the face of the aspiration to make Ireland the 'best small country in the world in which to do business'."

Isme said the Government could introduce a so-called incomes policy, which could include an earned-income tax credit, which could ensure that people can earn up to €20,000 without being taxed.