The Finance Minister is going to increase the minimum wage of €8.65 per hour to €9.15 per hour. There is controversy about this between businesses and union leaders. IBEC said it would be better if the government invested in creating job opportunities rather than increasing low wages. Danny McCoy of IBEC said ‘Given the economic evidence available it is inexplicable how such a rise could be proposed. Prices across the economy are below where they were in 2008, and the real value of the minimum wage has actually increased during the crisis. The knock on impact of a rise on wage expectations across the economy is a real concern. In the boom years, Irish labour costs drifted way out of line with competitor economies. We ultimately paid a very high price in terms of job losses and business closures. We risk making the same short-sighted mistakes all over again. If the government accepts the recommendations it is vital the budget reduces employer PRSI to offset the negative labour cost implications.’
The Restaurant Association of Ireland fears that raising the minimum wage will cause job losses in the trade. Adrian Cummins of the Restaurants Association of Ireland said: ‘An increase in the national minimum wage will have a devastating effect on the restaurant sector and will lead to cuts in hours and job losses. Ireland will have the second highest minimum wage in Europe after Luxembourg and our competitiveness will be destroyed.’
Chief Executive Ian Talbot said that this wage increase will cause an expectation of an increase in salaries throughout the country, which is not sustainable. Jimmy Kelly secretary of trade union Unite said that €9.15 per hour is still below the living cost of 11.50 which was calculated by the Living Wage Technical Group. He continued by saying “Once again, it seems that low paid workers are at the back of the queue when it comes to sharing in the fruits of our recovery.”
Sinn Fein MEP Lynn Boylan said that a rise of 50c will not be enough to support low paid workers. She said an increase of €1 per hour would be more beneficial for them. She went on to say that if Sinn Fein were elected they would increase the minimum wage to €1 or more per hour.
