Media reports indicate that the Low Pay Commission (LPC) has recommended an increase in the minimum wage of at least one euro increase for 2025, which represents an eight per cent increase on the current rate of €12.70 per hour.
This recommendation comes on top of the 12.4% increase which took place in January this year. Now, Ireland’s minimum wage is second highest in Europe after that of Luxembourg. With inflation currently running at just 2.2%, there is no justification whatsoever for a minimum wage increase almost four times that rate. ISME and many other trade associations have advised Government that any increase in the minimum wage, if there is to be one at all, should not exceed the rate of inflation.
This is a counter-intuitive move; the fact is that Small businesses, especially those in the services sector, will require more supports from the government to meet this increase. The alternative will be business closures and job losses.
“Media reports today also suggest that the LPC continues to rely on research undertaken by Maynooth University. This research has been comprehensively debunked by research undertaken by the Department of Enterprise,” said Neil McDonnell, CEO, ISME “It is deeply concerning that a state sponsored entity is ignoring the state’s own data which is reflected in the very poor quality of guidance provided and the LPC’s understanding of issues facing businesses in Ireland.”
While we completely understand the issue of availability of affordable accommodation for workers, this can never be fixed by artificially driving up the minimum wage. Only an increase in the supply of accommodation will push down the cost of accommodation.
This latest recommendation by the LPC unfortunately demonstrates a complete lack of awareness of small businesses within the Commission, which ISME has continually asked Government to address. It comes on the back of huge increases in costs over the past couple of years.
“It is unfortunate there is no recognition that the SME sector is the engine room that drives the economy in Ireland and is far and away the largest creator of sustainable employment. The sector is less robust than the LPC would have you believe,” said Neil McDonnell.
(Ends)
Issued on behalf of ISME by Heneghan
For information
Neil McDonnell / ISME – (087) 299 5658 (available for comment)
Nigel Heneghan – (086) 258 7206 – nigel@heneghan.ie
