Ibec targets minimum wage

 

Employers’ group Ibec has said the national minimum wage must be brought back into line with the average in other European countries.

In a submission to an Oireachtas Committee Ibec said the national minimum wage – currently set at €8.65 – is “clearly part of Ireland’s overall competitiveness disadvantage”.

While the submission did not call for an immediate reduction in the current rate, sources close to the organisation said it could be frozen until it came into line with levels in other countries.

Ibec director of industrial relations Brendan McGinty told the Oireactas Committee on Enterprise that although wages had fallen slightly since the start of the downturn, there were numerous obstacles facing employers who needed to reduce wages for competitiveness reasons.

“The national minimum wage contributes to Ireland’s high wage costs. It means higher cost for those working at the minimum wage, but it also impacts on the cost of employing other workers whose wages are linked to the minimum wage”, he said.

Mr McGinty said the national minimum wage in the United Kingdom was currently £5.80 per hour which at current exchange rates equates to €6.80.

“This represents an over 20 per cent wage cost competitive advantage for businesses based in the UK. When sterling was at its weakest in early 2009, the UK national minimum wage was just €5.90 and over 30 per cent below the Irish rate. Such large differentials in wage costs impact on prices; the viability of many enterprises and ultimately on employment.

“If Ireland is to become competitive again in the EU market, and in particular against the UK, all of our wage rates including the NMW must revert towards the average rates in these countries”, he said.