EMPLOYERS’ GROUP Ibec has said the national minimum wage rate should be frozen for a significant period of time.
In a submission to an Oireachtas committee yesterday, Ibec director Brendan McGinty said the minimum wage rate – which is €8.65 per hour – was costing jobs in certain sectors which were exposed to it.
However, he said Ibec was not calling for an immediate reduction in the rate. Mr McGinty said the Government urgently needed to carry out an assessment of the impact of the minimum wage in the economic circumstances.
In its submission to the Oireachtas Joint Committee on Enterprise, Ibec also sought a review of ancillary social welfare supports.
It said social welfare rates should be adjusted in line with wage and price trends across the economy.
It also said that the system of joint labour committees (JLC), which determine minimum terms and conditions in a number of areas, was obsolete and should be abolished. However, it acknowledged it was public policy to maintain this arrangement and contended in such an event the system should be radically reformed.
In a separate submission to the committee, the independent think tank Tasc strongly opposed any reduction in the national minimum wage or cuts in JLC rates.
Tasc director Paula Clancy said such moves would be a “double strike against economic recovery”.
“Firstly, any cut in the minimum wage or JLC rates would take more money out of people’s pockets – thus directly impacting on small businesses and their ability to maintain or create jobs.
“Secondly, Tasc research shows that lowering these rates would reduce income tax, income levy, PRSI and VAT receipts – and would thus have a negative impact on the public finances,” she said.
Tasc calculated that the direct cost to the exchequer caused by reducing JLC rates from €9.27 to the minimum wage rate of €8.65 would be €1,143 per worker.
Meanwhile the Irish Congress of Trade Unions (Ictu) told the Joint Oireachtas Committee on European Affairs yesterday that the employment standards contained in the EU working time directive are being undermined in many Irish workplaces.
Ictu social and legal affairs officer Ester Lynch said some employers were “responding to the recession by putting pressure on their employees to work longer hours for their week’s wage”.
Ibec told the committee that rather than continuing with heavy regulation at EU level, working time would be best managed at national level. It said the overly prescriptive rules set out in the directive had not worked well.