Industry & Business

ISME calls on employer representatives on the LPC to resign

ISME calls on employer representatives on the LPC to resign

ISME calls on employer representatives on the LPC to resign
July 21
09:00 2017

ISME, the Irish Small and Medium Enterprises Association, has called on the three employer representatives on the Low Pay Commission to resign from it. According to the Association, it fully supports the points raised by them in their dissenting opinion to the Commission’s recommendation. However, since the LPC has departed from its terms of reference in recommending a wage increase that is not evidence based and since the Government has accepted this recommendation, ISME says their continued membership of the LPC is futile.

Commenting on the LPC’s recommendation, ISME CEO Neil McDonnel said: “The phenomenon whereby increased minimum wages do not translate to increased earnings for workers has been well researched as late as last year, in a detailed study of Seattle’s minimum wage increase by the University of Washington. This found that increasing the hourly minimum wage had little effect on the earnings of low paid workers, because their worked hours fell, or in some cases they lost their jobs. Where wages were rising, there was little correlation with the minimum wage increase: where labour is in demand, wages will rise even in the absence of a minimum wage”.

ISME surveys its members on wages quarterly. Its latest trends survey shows that:

27% of its members will increase wages by between 0.5% and 2.4%

26% of its members will increase wages by between 2.5% and 5%

Just over 5% of its members will increase wages by more than 5%

However, 36% of its members will not increase pay this year.

Neil McDonnel added: “When we asked business owners about their own pay this year, 62% said they would not increase their earnings from the business.

“The businesses which can afford pay increases are paying them. The businesses which cannot, will not. It is that simple. Low-skilled and no-skilled workers will not have their earnings increased by lifting the minimum wage. This can only happen through gains in productivity.

“If Government is earnest in improving the lot of the lower paid, it will invest heavily in skills-based training in this year’s budget.

“Meanwhile, it is clear that the Low Pay Commission has ceased to provide objective, evidence-based reasoning behind setting the minimum wage. The employer representatives should no longer grace this political charade with their presence and should resign from the LPC now.”

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