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Proposed wage rise risks repeat of crash mistakes, says Ibec boss

Published 20/07/2015

Danny McCoy called for the coalition government to instead focus on job creation.
Danny McCoy called for the coalition government to instead focus on job creation.

Business leaders have denounced a proposed 50 cent rise in the national minimum wage.

Ibec, which represents private sector employers, said raising the rate to 9.15 euro would threaten a repeat of mistakes that led to the crash.

Danny McCoy, chief executive of Ibec, said the suggested increase would heap pressure on companies still struggling to stay in business and called for the coalition government to instead focus on job creation.

"Given the economic evidence available, it is inexplicable how such a rise could be proposed," he said.

"Prices across the economy are below where they were in 2008 and the real value of the minimum wage has actually increased during the crisis.

"Many businesses still cannot afford pay increases and turnover in sectors such as retail remains up to 20% below the pre-crisis peak."

Mr McCoy said businesses have a real concern that a minimum wage increase could cause a knock-on impact of expectations of pay rises for all workers.

"In the boom years Irish labour costs drifted way out of line with competitor economies," he said.

"We ultimately paid a very high price in terms of job losses and business closures. We risk making the same short-sighted mistakes all over again."

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