Retail and business groups have expressed their concern about the impact increasing the minimum wage to 9.55 on small business’ ability to remain profitable.
Yesterday, Taoiseach Leo Varadkar announced that the minimum wage is set to rise to €9.55, an increase of 3.2%. The increase comes after recommendations from the Low Pay Commission. The increase will come into effect from January 1st, 2018. It will be the fourth increase in the past five years and at least 150,000 workers will benefit.
Business groups, including Retail Ireland, have pointed out that Ireland’s minimum wage is already one of the highest in Europe and have claimed there is “no economic basis” for a 30 cent per hour increase in the minimum wage as Brexit looms on the horizon.
Retail Ireland warned it could impact on jobs in the sector. Its director Thomas Burke said: “With little to no inflation in consumer goods and growing concern over the impact Brexit is already having on the retail sector, there is absolutely no economic basis for a further increase to minimum wages.
“Such a rise at this juncture would significantly affect retailers’ ability to remain competitive against a backdrop of falling prices and rising costs within the sector.”
Taoiseach Leo Varadkar, speaking at the announcement yesterday said “It’s an increase well ahead of inflation, well ahead of average wage growth in the economy. It is modest. It works out at about an extra €12 per week but it is still an important step in the right direction,” he said.
Mr Varadkar said the cost would fall primarily to private sector employers in industries such as retail and hospitality. He said they had more than five months’ notice before the increase took effect on January 1st, 2018.