28th March 2024: ISME has responded to ICTU’s comments over the past week which suggest the unions are finding hard to absorb the messages in the SaveJobs campaign. It is entirely incorrect to suggest that current labour market changes “merely bring Ireland into line with EU counterparts. While trade unionists are describing the labour cost adjustments as “modest” the fact is that the open market has decided otherwise. They are anything but modest and any SME owner will confirm that fact.
“Wage inflation is the precise reason we are witnessing significant business closures around the country, particularly in the services sector,” said Neil McDonnell, CEO, ISME. “The simple fact is that consumers, including ICTU members, are unwilling or unable to pay the price increases which this year’s increase in labour costs are dictating.”
Ireland has the second highest minimum wage and the fourth highest median wage in Europe. Low wages are not the problem here, high costs and lack of accommodation are.
The manner in which the National Minimum Wage (NMW)/Living Wage is being calculated ignores the fact that workers in large firms are paid €287.67 per week (38%) more than workers in SMEs; and public servants are paid €351.92 per week (46%) more. This is based on figured from the fourth quarter of 2023. Small business cannot afford to be benchmarked against such high wages.
“As long as Ireland remains at or close to full employment, we will not see the labour cost issue impact unemployment levels,” said Neil McDonnell. “What we will see is a progressive closure of small businesses such as childcare facilities, nursing homes, restaurants and convenience stores, especially outside our main cities, where multinational chains provide many of these services.”
The business closure statistics released this week by PwC do not lie and reflect the unfortunate commercial reality for small businesses continuing to try to make a profit.
“If the trade unions do not believe the evidence-based case currently being provided, perhaps they should ask their own members about access to childcare, nursing home and hospitality facilities, particularly those in rural areas,” said McDonnell.
Recently, in response to ongoing significant concerns at the treatment of the SME sector by policy makers in Ireland, ISME and a number of other trade organisations initiated a nationwide campaign focused on the cumulative increases in labour costs and representation on the Labour Employer Economic Forum and the Low Pay Commission.
Campaigning for National Minimum Wage reform; Tax reform; and Industrial Relations reform, the slogan is “Save Jobs – Sign the Pledge” where ISME and its affiliated organisations have been securing support for these objectives.
As part of the campaign, small businesses are seeking a seat at the Labour Employer Economic Forum (LEEF). Neil McDonnell said: “The government has ignored the SME sector repeatedly in our request for representation on LEEF. This is not an acceptable situation, and it is far from equitable. In reality SME employers must be represented pro-rata on LEEF. That is sixty per cent. This is a major issue for us, which we will continue to pursue.”
Among those organisations who have initially signed up to the Savejobs.ie campaign with ISME are the Irish Hairdressers Federation; Restaurants Association of Ireland; Irish Hardware Association; Nursing Homes Ireland; Retail Excellence Ireland; Hair and Beauty Industry Confederation; Vintners’ Federation of Ireland; and Convenience Stores & Newsagents Association.
ISME has a total membership of 10,500 across Ireland, which is a combination of both individual SME’s and a number of leading affiliated trade organisations.
