THE CHIEF EXECUTIVE of the representative body for small Irish businesses has urged jobs minister Richard Bruton to put his cabinet colleague Joan Burton “back in her box” over hopes of raising the minimum wage.
Joan Burton yesterday 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.
The idea met with wrath from ISME, however, which has urged other ministers to shoot down the plans.
“Her job as Social Welfare minister is to make sure that people have some sort of living income,” its chief executive Mark Fielding said this morning.
“It is not an employer’s job to actually do that. An employer can only pay what the going rate is.”
Fielding called on enterprise minister Richard Bruton, who is the cabinet minister directly responsible for pay issues, to put Burton “back in her box” by ruling out any move that made it more expensive for firms to hire workers.
He told Today FM’s ‘Savage Sunday’:
This type of kite-flying will stop business from looking at taking on new people in the next number of months. This time last year she flew a kite about sick pay, and it actually pulled back people who were planning on taking on new people.
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.
“Loose lips in this case will cost jobs, I’m afraid,” he said.
Fielding said 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,” Fielding said, referring to the factors considered by multinational. “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.
Fielding said Burton should instead concentrate on a minimum income policy “rather than foisting her responsibility on an employer and saying you must pay a certain wage to a person, if that is beyond the going rate for their job.”
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