Government says ‘serious risks’ in increasing minimum wage

A Department of Finance submission to the commission on low pay has warned of "serious risks" in increasing the national minimum wage, the Dáil has heard.

Fianna Fáil enterprise spokesman Dara Calleary said the department's position was that any increase would reduce employment and put at risk gains made since 2008.

He criticised its call for a system to allow the minimum wage to be reduced in the future. Mr Calleary said “that was done once before and it was a mistake” and it should not be allowed to happen again under the new system.

Mr Calleary was speaking during a debate on the National Minimum Wage (Low Pay Commission) Bill which puts the low pay commission on a statutory footing.

The Fianna Fáil submission to the commission calls for a 6.4 per cent increase in the minimum wage to bring it to €9.20 an hour, or a gross annual increase of €1,115 based on a 39-hour week.

Mr Calleary also said the time had come to “name and shame rogue employers who fail to adhere to the law and pay the minimum wage”.

He said the Revenue Commissioners should keep a quarterly register of employers prosecuted under the legislation.

“People will then know those companies playing with their workers’ lives and seeking competitive advantage.”

International standards

Introducing the Bill, Minister of State Ged Nash said Ireland's national minimum wage was "relatively high by international standards".

He said taking the cost of living into account, Ireland’s rate was sixth highest of the 22 EU states that had a national minimum wage.

Central Statistics Office figures showed just under 4.4 per cent of all employees were on the minimum wage.

Mr Nash said the ESRI in 2006 said adjusting the minimum wage by a substantial amount with lengthy gaps between increases “is more likely to have a detrimental impact on employment and contribute to uncertainty” than smaller, more regular increases.

The low pay commission has nine members with an independent chair. It will examine and make recommendations to the minister of the day on the national minimum wage in a way that it is “progressively and incrementally increased”.

Sinn Féin enterprise spokesman Peadar Tóibín criticised the Government’s commission as “limp” and said it would not scratch the surface with regard to the damage done to this society over the past eight years”.

Mr Tóibín said Britain's experience with a low pay commission offered Ireland the opportunity to create one that was "relevant and ambitious" but "what we are constructing is a generation behind our counterparts in the rest of Europe".