Ibec, the group that represents Irish business, today said that there is no justification for further increases to the national minimum wage in the current economic climate and called on Minister Fitzgerald to delay the implementation of the recommended increase to €9.55 by the Low Pay Commission. The group warned that any rise would fuel wage pressure across the economy at a time when businesses are facing acute challenges to competitiveness posed by Brexit.
Speaking as the Low Pay Commission issued its recommendations today, Director of Employer Relations at Ibec, Maeve McElwee, stated: “Ibec supports the national minimum wage in principle, but any increase must be in line with economic realities. Current trends provide no justification for such a substantial increase at a time when many Irish sectors are so exposed to competitive threats from Brexit. Any further cost burdens imposed by minimum wage increases would be extremely difficult for these sectors to withstand.
“The Irish minimum wage is already one of the highest in the EU, and will be 12% higher than that in the UK if these recommendations are implemented. Since July of 2015, the euro has strengthened by over 25% against sterling, the currency of the main trading market of Irish indigenous exporters. In addition, Irish producers are facing increased competition at home from cheaper British imports. It is unclear how the Low Pay Commission could have arrived at an increase of this scale with due regard for these facts. The terms for reporting of the Low Pay Commission, established by Government under the National Minimum Wage Act 2015, require adjustments in the national minimum wage only where appropriate, and for any increases to be incremental without significant adverse consequences for employment or competitiveness. We believe that Government should ensure that the minimum wage is competitive and affordable while also taking into account the cost of living. An inappropriately high minimum wage will lead to a reduction in employment, hours worked, job creation, and ultimately business viability."