Improved competitiveness and flexibility will increase employment.
ISME, Wednesday 25th February 2015.
ISME, the Irish Small & Medium Enterprises Association, welcomed the increase in employment measured by the CSO Quarterly National Household Survey (QNHS) for the 4th quarter of 2014, released today (25th February) but warned that wage pressures and uncertainty regarding the minimum wage are hindering job creation. The Association called on Government to focus on assisting businesses to create new jobs by cutting business costs and focusing on competitiveness.
The seasonally adjusted unemployment rate has reduced to 10.4%, showing a total of 213,600 jobless, as confirmed by the QNHS, the official recording of the labour force. Long term unemployed account for 57.8% of the total and, while reducing, still continues to be a cause for concern.
Commenting on the figures, ISME Chief Executive, Mark Fielding said, “While the overall labour market is improving, it is clear that it is a very gradual improvement and it is coming off a very low base. There is still a long way to go to get the economy back to full employment, and it is important that policy makers avoid actions that could damage employment creation. In this context, keeping wages under control is essential”.
“The current administration, in a blatant attempt to garner votes, seem intent on setting unsustainable and uneconomic wage expectations. This ‘loose talk on wage increases’ has little basis in economic reality and is discouraging business owner-managers from expanding their workforce. The uncertainty around a possible increase in the minimum wage and the knock-on effect this would have on wage expectations is resulting in a ‘wait and see’ approach to expansion from SMEs.”
“The main work-related issue is not rates of pay, it’s creating jobs for the large numbers who are still unemployed and particularly for the long-term unemployed. One quarter of our citizens under the age of 60 live in a jobless household. This has huge social and economic consequences and cannot be allowed to continue. Government Ministers need to focus on getting people back to work, that was their promise to the electorate in 2011 and on that they will be judged.”
The Government must address the concerns of smaller businesses, the main job creators by;
Focussing on cost competitiveness, with a concerted effort to tackle business costs.
Tackling the Social Welfare Trap and the surge in the black economy.
Ensuring flexibility in the labour market through reasonable regulations.
Carrying out the promised reform of the public sector including a pay freeze until 2017.
Continue to monitor the availability of bank credit in the economy.
“The Government must put the economy before its re-election ambitions; costs must be reduced, welfare-dependency eliminated and assistance given to the entrepreneurs who are driving the economic recovery”, concluded Fielding.