State-influenced business costs a cause of concern.
At the release of the Quarterly National Household Survey today (17th November), ISME, the Irish Small & Medium Enterprises Association, called on Government to better support SMEs, the primary job creators in the country, in their efforts to grow their businesses and increase employment. The Association noted that, while 56,000 jobs had been created in the past twelve months, there has been a general slowdown in job creation as a result of wage pressures and the increase in the minimum wage is acting as a brake on new employment.
The Quarterly National Household Survey, the official recording of the labour force, shows that 56,000 jobs were created in the last twelve months. There are still 203,000 people unemployed, of which 54.1% are long-term claimants. The seasonally adjusted unemployment rate reduced from 9.6% to 9.1% over the quarter.
According to ISME CEO, Mark Fielding, “As we move towards the end of the government’s term we must re-evaluate the current business environment and the obstacles that are hindering job creation. The increase in the minimum wage which will come into effect in January is acting as a disincentive to owner-managers who might otherwise have considered employing extra staff. The resurgence in the economy is simply not stable enough yet to withstand this extra labour cost and the resultant knock-on wage pressures from other employees. It was a policy decision borne of re-election ambitions rather than fiscal or economic prudence.”
“SMEs are struggling with rising business costs and diminishing competitiveness. The economic recovery is not being felt across the country and even in the capital it is mostly benefitting big businesses. The next administration will have to go back to the drawing board and tackle the ever increasing business costs that actually hamper economic growth and employment.”
The Association demanded that Government address the concerns of smaller businesses, the main job creators by;
Focussing on cost competitiveness, with a concerted effort to tackle SME business costs.
Tackling the Social Welfare Trap and the surge in the black economy.
Ensuring flexibility in the labour market through reasonable regulations.
Carrying out the promised reform of the public sector.
Continue to monitor the availability of bank credit in the economy.
“The Government must put the economy before its re-election ambitions; reduce state influenced costs, eliminate welfare bottlenecks and allow entrepreneurs to get on with driving the economic recovery“,concluded Fielding.