Increasing labour costs should be a key election issue.
ISME, the Irish Small and Medium Enterprises Association, welcomed the latest CSO Live Register figures released today (7th January) noting that 2015 was a successful year in terms of employment growth. However, the Association cautioned that the rate of growth has been slowing down in recent months due to business owners’ concern over increasing business costs, continued economic uncertainty and unsustainable wage pressures.
The seasonally adjusted Live Register figure decreased by 1,800, leaving 328,600 people signing on the dole. Long-term claimants still account for 45.4% of the total.
ISME CEO, Mark Fielding commented on the figures, “The figures show that progress has been made in relation to employment growth in 2015. The economic recovery strengthened during the year and gradually began to benefit small businesses. This was reflected in the employment growth figures but, as the year drew to a close, there has been a significant slowdown”.
“Many factors influenced this slowdown but the most critical is the increased labour cost being forced on owner-managers. Government’s decision to increase the National Minimum Wage without adequately considering the detrimental knock-on effect on businesses will result in a slowdown in the jobs market this year.”
“The high level of long-term unemployed shows that labour-force activation measures are not working adequately. These need to be revamped to suit the current market and schemes such as Jobsplus must be promoted to help get the long-term unemployed back to work.”
The Association called on the Government to:
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.
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.
“Government must address these pressure points through structural and policy changes to ensure that the fragile recovery is guarded as Ireland returns to positive growth. Loose pre-election pay promises must be replaced by proper debate on business costs. We must nurture the wealth and job creating SME sector through cost curtailment and focused incentives, resulting in a virtuous circle of jobs, welfare reduction and revenue”, concluded Fielding.