During the worst of the recession the media was peppered with articles about the so-called ‘race to the bottom’ as ICTU and others accused business owners, trying to keep their businesses afloat by cutting costs right across the board, of trying to impoverish workers for the benefit of their own pockets. The reality was that it was the business owner who ended at the bottom, along with their bust businesses – surrounded by the collateral damage of tens of thousands of lost jobs.
No skin in the game
But now, even though we aren’t out of the economic emergency room, we’re seeing a race to the top – not by still struggling employers, but by those who have no skin whatsoever in the game, people eager to give away money that is not theirs, happily oblivious to the economic damage they are causing while doing so. They must feel like Santa Claus – happy to give presents to all, but at no cost to themselves.
Snake oil economics
Take for example Fianna Fáil’s enterprise spokesman Dara Calleary. A TD since 2007 he previously worked for an industry body as well as with a bank. There’s no evidence that he has created a business and employed people. He therefore, in our book, can be said to have had ‘no skin in the game’. According to this morning’s Irish Times Mr. Calleary is quoted as saying “The department’s (of Finance) position was that any increase (in the minimum wage) would reduce employment and put at risk gains made since 2008.” At ISME we take that as a fact. All our thousands of members who have created hundreds of thousands of jobs take that as a fact. Mr. Calleary seems to think otherwise.
Cutting to the chase
In fact Mr. Calleary’s party has made a submission to the low pay commission looking 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. And why? Can it be due to inflation? No. There is no inflation within the economy or… we were going to list possible other (incorrect) reasons here as to why he thinks a wage increase is necessary but we decided to cut to the chase.
Votes not jobs
It’s this simple. There’s an election coming down the tracks and what we are about to see is the usual promise on promise on promise by all the political parties. We’re apolitical at ISME so we damn all their false promises. This is a ‘race to the top’ – who can offer the public the most of their own money, taken by taxes, back in order to get votes?
250,000 unemployed don’t seem to matter
There is no credible economic argument that says that by paying higher wages, when it’s not economically sustainable, will help in getting the 250,000 people unemployed back to work. In fact the opposite is the proven truth. Offering the public false hope based on snake oil economics is simply disingenuous.
We hope all those ‘race to the bottom’ commentators will be equally vociferous about the ‘race to the top’?