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SFA Oppose Wage Hikes

A delegation from the Small Firms Association lobby group has told new junior enterprise minister Jed Nash not to increase the minimum wage.

SFA Chairman, AJ Noonan stated: “The small business sector currently employs half the private sector workforce, some 700,000 people.  Whilst an economic recovery is starting to take hold, many small businesses are just getting back on their feet, and their balance sheets remain challenged after 6 years of recession. 

“In order to secure the recovery and set small businesses on a path to growth, it is essential that competitiveness issues are prioritised in Government.”  

According to Noonan, Irish labour costs are now 30.8% more than our nearest competitor, the UK, 16% more than the EU average and 11th highest in Europe.

“This is putting us at a distinct competitive disadvantage, and is a particular problem for SMEs in the services sector where the cost of employing an individual accounts for over 80% of location sensitive business costs (i.e. costs which vary by location rather than being set by a worldwide market).

“Government changes in PRSI, illness benefit, redundancy rebate, health insurance and general taxation all impact negatively.  No further costs can be imposed through Budget 2015,” he said.

Noonan added: “It is entirely premature to be talking about across the board wage increases, which small businesses can ill-afford and which would destabilise the government's job creation targets.

Jed Nash

“Even with the 3% increase in the UK national Minimum Wage from October 2014, it will still only be the equivalent of €8.17 per hour, compared to Ireland's rate of €8.65 per hour.

“We are opposed to any increase in the statutory minimum wage and mandatory sick pay or pension provision, which would have a devastating impact on the fragile recovery that is taking place in small firm employment.

“The small business sector has consistently demonstrated that given the right economic conditions, small business owner-managers will, with confidence, continue to invest, create and grow new businesses, thus increasing employment levels and overall revenues to the government in both business and personal taxation.

“Our new enterprise minister and the rest of government must remember that this model of creating a supportive environment for indigenous small business has been and will continue to be the cornerstone of Ireland's economic success.”  (August 2014)

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