Concept of minimum wage comes under strong attack

 

The planned introduction of a minimum wage came under sustained attack from a number of economists at the conference who warned of massive job losses if the Government proceeds introduce it.

The minimum wage, which is expected to be introduced in April 2000, could result in the loss of as many as 56,000 jobs, according to Dr Frank Barry of UCD. Other economists such as Mr Brian Geogeghan, of IBEC, and Mr Jim Power, chief economist at Bank of Ireland, were also highly critical of the proposal.

According to Dr Barry, 23 per cent of Irish jobs pay below the minimum wage of £4.40 an hour. He added that this would point to as many as 56,000 job losses. Of these, up to 18,000 would be in manufacturing and 38,000 in the services sector.

However, Dr Gerry Boyle, of the University of Maynooth, said minimum wages can represent an improvement in welfare and do not necessarily lead to job losses. Dr Boyle also worked on the report for the Minimum Wage Commission.

However, the employers' lobby group, IBEC, is still to opposed to the minimum wage concept. It argues that at a time when Ireland is entering into monetary union, it must maintain flexibility. IBEC is also calling for compensation for employers who employ "less productive" workers.

Mr Jim Power also stressed that Ireland needs flexibility as it enters EMU. He pointed out that the minimum wage could lead to higher wage demands from those who currently earn just over the minimum, to maintain the differential.

"It may also entice young school leavers into the workforce to earn an easy buck," he said.