Joan Burton, Minister for Social Protection, has come under enormous criticism from the Irish Small And Medium Enterprises Association (ISME) as a result of her call to increase the minimum wage from €8.65. Minister Burton, who previously called for employers to provide paid sick pay to employees, told Labour Youth’s Tom Johnson summer school in Co Cork that the State was effectively subsiding employers by paying certain benefits to workers who earned the minimum wage – and suggested the minimum wage should be increased to shift this burden.
In response an ISME representative (Mark Fielding) said SME recruitment had increased in January, specifically because firms were waiting for Budget 2013 to ensure they would not be forced to cover sick pay costs. He said workers paid more than the current minimum wage of €8.65 an hour were likely to also seek increases, to maintain their differential above the bottom wage, if the €8.65 minimum was increased. Ireland’s economic competitiveness would be “shot” if Ireland paid relatively more in wages than rival firms in the UK or Europe, as Irish products would therefore have to cost more.
He said attempts to increase the cost of recruiting a worker would also leave multinational firms more reluctant to set up shop in Ireland. “The first thing that you look at will be wages, after that it’s energy costs and after that it’s local charges and all the rest.” Ireland already had one of the highest minimum wage structures in Europe, particularly when sector-specific labour arrangements were taken into account, he added.
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