17 July 2008 Edition
Small Firms Association wants minimum wage cut
SOCIAL PARTNERSHIP talks in the 26 Counties have continued this week but made little progress as a row emerged between trade unions and the Small Firms Association (SFA) which has proposed to cut the minimum wage by €1.
The minimum wage in the 26 Counties is now €8.65 (£6.88) per hour.
SFA Director Patricia Callan made the proposal and claimed that the state had “lost the plot” and had become a “high-cost competitive economy”.
The SFA claimed that the minimum wage is contributing to the escalating levels of youth unemployment. Callan also suggested that there should be a sub-minimum wage for people in training positions in jobs.
SIPTU General President Jack O’Connor said that figures from the Statistical Office of the European Communities (Eurostat) showed Irish wages are at one-tenth of the European average. O’Connor also said that Luxembourg had the highest minimum wage at approximately €10.06 and had lower unemployment rates than the 26 Counties.
“The process in which we are engaged to tackle current economic difficulties is far too serious for people to engage in this sort of nonsensical grandstanding.
“Apart from the immorality of suggesting our problems can be resolved by crucifying those earning the minimum wage, it would do nothing to address the problems we face.”
The Irish Congress of Trade Unions has continued to propose in the talks that high earners should be targeted in order to fund and maintain public services.
Congress General Secretary David Begg said there is a major imbalance in the way workers are treated by the tax system compared with speculators who were the main beneficiaries of the state’s economic boom.
Last week, Congress launched a document named Rewarding Productivity and Promoting Social Equity – Tax Reform in the Context of a New National Agreement which outlines a strategy on taxation and other objectives that should be included in a new pay agreement for the 26 Counties which includes reducing VAT rates, winding up tax breaks, reintroducing bank levies, capping the amounts that companies can set against tax against the amount they pay senior executives at €640,000, and introducing mandatory pensions.
Sinn Féin Workers’ Rights spokesperson Arthur Morgan has rejected the SFA suggestion of a cut in the minimum wage rate. He said that the party is determined to ensure that, unlike the recession of the 1980s, the burden of this recession will not fall primarily on the shoulders of the low paid.