ISME fears Union wage demands could sabotage recovery

Following the release of the latest Live Register figures this week, the Irish Small and Medium Enterprises Association (ISME) warned that event modest employment growth would not be possible if wage increases are given by employers.
 
The ISME urged the Government, Unions and employees alike to understand that economic difficulties and high business costs are still posing a threat to SMEs with minimal room for manoeuvre on gross wages.
 
Mark Fielding, CEO of the ISME, said: “While unemployment might be decreasing there is currently no justification for wage increases in the vast majority of SMEs.
 
“A one-size-fits-all approach from the trade union movement on blanket wage increases cannot be countenanced as many SMEs barely survive.

“The ‘Partnership’ mentality of ICTU and IBEC must be stopped in its tracks before we revisit the madness of the ‘bubble’ when our competitiveness dropped by 39 per cent due, in the main, to over-generous wage increases.”
 
The seasonally adjusted Live Register figure currently stands at 11.7 per cent. There are now 392,700 claimants of unemployment benefit; that’s a reduction of 3,400 in the last month. Long-term claimants currently account for 45.9 per cent of the total claimants.
 
Mr Fielding is calling on the Government to focus on Ireland being cost-competitive in relation to the country’s global competitors, whilst addressing the lack of bank credit for productive SMEs and overhauling the social welfare system to give people a financial incentive to get back into work.
 
“Headline wage increases are being trumpeted by trade unions involved in the multinational sphere, however in the SME sector, accounting for 99 per cent of all Irish businesses, the stark reality is that ‘survival’ is still the goal and anyone foolish enough to give in to wage pressure will perish,” added Fielding.

Date published 2 May 2014 | Last updated 2 May 2014