Jobs growth slows due to fear of wage increases, says ISME

The Irish Small and Medium Enterprises Association (ISME) has warned the Government that their “leading remarks” on minimum wages and wage costs have left SME owners fearful of creating new jobs.

The Monthly Unemployment figures for June revealed that 208,100 people remain on the dole, with the standardised unemployment rate at 9.7 per cent – no change on the revised May figure.

The ISME wants the Government to implement pro-enterprise policies to encourage SMEs to expand their workforce and grow.

But at present, the government’s pre-election promises of wage increases and a recent cave-in on public sector pay has caused new job creation to stall amid SME owners’ fears of increasing business costs.

Mark Fielding, CEO, ISME, said: “The creation of wage increase expectations and the ever increasing costs of business are having a stultifying effect on employment growth.

“Government must understand how fragile the recovery is in the SME sector and that unless it is economically viable to hire more staff, SMEs simply cannot do it.

“What is urgently required is a clear and targeted policy to include employment maintenance and job creation, moving individuals from the dole queue back into employment.

“This policy will only succeed as part of overall pro-enterprise policies, specifically aimed at the labour creating SME sector.

“If the proper platform is in place, including availability of credit and a competitive environment free of excessive bureaucracy, SMEs will create and sustain jobs.”

The ISME has implored the Government to consider the following:

• Stop interfering in private sector wage bargaining

• Reduce government-influenced business costs to below the EU average

• Ensure real measurable access to credit for viable SMEs

• Reform the social welfare system to make it more profitable to work

• Attack the scourge of ever-increasing black economy activity

“It is crucial that the Taoiseach and his cabinet cease the interference and begin to deliver on their promises, which will provide SMEs with the impetus and security to create badly needed jobs,” added Fielding.



Image: rich_w

Date published 1 Jul 2015 | Last updated 1 Jul 2015