Minimum pay report calls for increase of 10 cent

A proposed 10 cent an hour increase in the minimum wage has received a mixed reaction, with unions saying it is not enough and employer groups saying it will cost jobs.

At its weekly meeting yesterday the Government was presented with a report from the Low Pay Commission which recommended the 10 cent increase to €9.25 an hour.

The commission recommended the 10 cent increase by a majority of six to three, with the trade union members issuing a minority report proposing a substantially larger increase.

At the beginning of this year the minimum wage was raised by 50 cent per hour to €9.15 following the Government’s acceptance of the first report of the Low Pay Commission.

Competitiveness

Minister for Jobs Mary Mitchell O’Connor said that the “balanced and non-political commission” had been tasked with carrying out an evidence-based assessment in proposing an appropriate level of the minimum wage, taking into account issues such as impacts on job-creation and competitiveness.

“I brought the commission’s report and recommendation to Government, and it will be considered in detail in the context of Budget 2017,” she said.

Labour Party spokesman on jobs and enterprise Alan Kelly said the commission's recommendation was "very disappointing" and fell well short of what was needed if the Government's commitment to increase it to €10.50 an hour by 2021 is to be achieved.

Anti-Austerity Alliance TD Mick Barry described the proposed increase as a "slap in the face" for low-paid workers, saying it amounted to a minuscule increase of 1 per cent, or €4 a week, for 70,000 of the lowest paid workers.

Fine Gael TD Noel Rock appealed to Ms Mitchell O'Connor and her Cabinet colleagues to ensure it was raised by more than 10 cent.

Poverty

Siptu, the country’s largest union, condemned the increase as “a completely inadequate response to the issue of low pay and poverty”.

The Unite union described the 10 cent increase as “insulting”.

However, the employers’ group Ibec said the proposal for a further increase in the minimum wage would heap extra pressure on vulnerable sectors already reeling from the sharp drop in the value of sterling. “While the proposed increase is broadly in line with wage trends elsewhere in the economy, many businesses simply cannot afford pay rises,” said Ibec director of employer relations Maeve McElwee.

She said exporting companies most exposed to the sterling fall in areas such as tourism, retail, manufacturing and food processing were least able to absorb wage increases.

Chief executive of Chambers Ireland Ian Talbot also criticised the proposal, saying it did not reflect the realities of the trading conditions faced by Irish business post-Brexit, and it would further erode our competitiveness.

Retail Ireland director Thomas Burke said there was no economic basis for a further minimum wage increase following the 6 per cent increase earlier this year.