The devil is in the detail
Back in the day our old maths teacher revelled in showing us that oh so simple trick, asking us to increase a hundred by a half and then dividing that number by half and showing us that the figure was not the same. To reach the same figure it was 50% up but only 30% down. Something similar happens when you look at the volume and value of sales. Today’s CSO September retail figures show that sales increased by 0.3% in volume but actually fell by 0.1% in value when motor sales are excluded. For smaller businesses value is what pays the bills and that amount of money is actually falling.
All ISME members are diamonds. And why do we say that? That’s because diamonds are ordinary carbon atoms that have borne extreme pressure for a very long time. Our small and medium enterprises members have withstood the extraordinary business and economic pressures of the downturn and are now emerging from the ground and hoping to shine. That’s why we’re really worried about self-congratulation from the Government while in truth, they did little or nothing to help the retail trade in the Budget. Except add to costs by increasing the minimum wage.
Government to give away money they don’t own…again
The ISME position on the minimum wage is well known. The 6% hike increases the cost base and is a disincentive to new jobs. It is wrong, both economically and morally, of the Government to make small businesses who can’t afford it, pay it. We acknowledge that the Googles and the Facebooks of the world could probably afford to pay €915 an hour and not just the proposed €9.15 but it’s about time that commentators recognised the vast, vast, gulf between huge corporations and the small sweet shop. They are both in business but one is on Venus and the other is on Mars.
A perfect example
A sectoral breakdown of today’s figures perfectly demonstrates our concerns regarding the smaller retailers. The larger merchants such as motor dealers saw a 16% rise year on year. Furniture sales were today’s winners with big out-of-town names like Harvey Norman increasing furniture and lighting sales by a whopping 18.7%. But other sectors such as books, newspapers and stationery hardly grew at all, rising just 0.6% over the year. Larger companies can possibly afford pay increases but it’s self-evident that others clearly cannot? However the minimum wage is a blunt instrument and all have to pay the extra 6%, with no increase in productivity.
Killing town centres
Town and village streets are populated by smaller business units. These are the very units that are still struggling. Adding to the minimum wage will see small shops closing. Closed shops will further destroy town and village centres, their very hearts. This is not the law of unforeseen consequences. This is the law of couldn’t care less about the consequences.