Employers and Government must resist uneconomic wage demands.
Government must concentrate on reducing the wages tax wedge.
At the release of the latest CSO Live Register figures today (3rd March), ISME, the Irish Small and Medium Enterprises Association, warned against preemptive wage increase demands by the trade union movement, which would scupper any signs of a recovery across the economy. The Association called on politicians from all sides for a united front against premature and selfish wage demands as the unions prepare their wish lists.
The seasonally adjusted Live Register figure for February decreased by 2,700, leaving 321,000 people signing on the dole. Youth and long-term claimants are still too high as activation measures fail to reach targets.
Commenting on the figures, ISME CEO, Mark Fielding said, “The madcap wage demands of Luas drivers is only the beginning of an onslaught by the unions across the public and private sectors. We now need strong political and economic leadership, it is imperative that the message of wage restraint is delivered loud and clear, as we cannot allow a wage free- for- all to ruin the recovery”.
“While we are seeing signs of possible growth in the still fragile domestic economy, the situation for many SMEs remains precarious. ISME figures indicate that the majority of SMEs will not be in a position to increase wages during 2016 and in a small percentage of cases the increase will be in the range of one to two percent.”
“The growth in big business, semi-states and multinationals does not, in any way, reflect the reality on the ground for the 200,000 SMEs, representing over 99% of all businesses in the country. The headline figures from big business surveys, which are unrepresentative, have created strange bedfellows, as they have been embraced by trade unions to create unrealistic pay expectations, and cannot be used across the economy as the ISME survey proves.”
“The next Government must also focus on activation measures for youth and long-term unemployed. At the moment there is a core group of people who are just not finding employment for a variety of reasons. Further training and educational opportunities must be offered to those who want to work, while those who don’t, need to be assessed and encouraged into the workforce.”
The Association advised employers to stand firm on wage claims and called on the Government to:
Introduce new and improve existing activation schemes in conjunction with employers.
Increase job-rich infrastructure investment.
Reform the social welfare system to make it more profitable to work.
Attack the scourge of ever-increasing black economy activity.
Focus on cost competitiveness for the SME sector.
Reduce government influenced business costs to below the EU average.
Ensure real measurable access to credit for viable SMEs.
Outsource more state sector services to SMEs.
“Competitiveness and productivity growth provide the fastest and clearest route to higher living standards. The incessant calls for ‘pay rises’ must be focussed on ‘take home pay’ and a reduction in the ‘tax wedge’, rather than another increase in business costs through wage increases,” concluded Fielding