SFA Calls for the National Minimum Wage to remain unchanged

March 29, 2022

The NMW should be appropriate, competitive, and affordable. In the current Irish context, with businesses just reopened and so many small firms getting back on their feet after being closed and reliant on government grants, warehousing, subsidies and deferrals, the SFA believes that wage increases cannot be enforced across the board. Voluntary increases are the most practical, taking account of the businesses’ ability to pay and thereby maximising job creation and retention. This is already happening as many SFA members report that it is their intention, after assessing their business’ ability to increase wages for their employees. In the majority of cases real wages in many small businesses are far ahead of the NMW.

The NMW is a blunt instrument, and the State must weigh up the other instruments at its disposal for achieving desired economic and social outcomes. The cost of housing, both rental and purchase, cannot be effectively addressed via the NMW and must be tackled at source. Further income tax changes can be deployed to increase the take home pay of employees without an additional burden on the employer. These measures along with further Government efforts to tackle the rising rate of inflation will have a much more tangible and lasting impact than an increase in the NMW.

The NMW is an absolute wage floor and as such must take account of the weakest and most vulnerable companies if it is not to cost jobs and jeopardise local economies. In an economic context where competitiveness is paramount, it is not realistic to continually increase the minimum wage ahead of average wage growth, minimum wage growth in competitor economies and far ahead of domestic inflation.