TWO GOVERNMENT Ministers have suggested that the minimum wage should be lowered in view of the economic difficulties facing the State.
Minister of State for Labour Affairs Billy Kelleher warned that the minimum wage, currently set at €8.65 an hour, should not become a barrier to employment.
He said there were “huge pressures” on sectors such as tourism, with widespread layoffs in hotels and rising costs.
While it was up to the social partners to decide on the new rate, he hoped all aspects of the issue, including the current economic climate, would be taken into account in the review.
However, he acknowledged that if the rate is set too low, there might be no incentive to work for minimum wages and people might remain on social welfare.
Minister for Health Mary Harney said we had to be mindful of the consequences the level of the minimum wage had for the generation and maintenance of jobs. In the services sector, she said, many small restaurants were finding it very difficult to hire staff and make a return on the wage levels they have to pay.
The issue was broader than just the minimum wage, she said. “That’s the floor and all other wages are based on that. It’s also issues like premium pay where, in some places, twice that level is paid, for example, on a Sunday to all levels of employees.”
Arrangements which were introduced in good times could have the consequence now of making Ireland uncompetitive and putting jobs at risk, the Minister said.
“So I think we have to be pragmatic in the manner in which we approach this. I don’t know what the minimum wage should be in Ireland.
“I’m not competent to decide what it should be, but I know that it has risen very rapidly since it was introduced.”
The minimum wage, which was introduced in 2000, was last increased in July 2007.