ISME, the Irish Small and Medium Enterprises Association, welcomed the drop in unemployment figures for February, released by the CSO today (4th March) but warned that incessant calls by trade unions and labour ministers for wage increases were impeding job creation in the SME sector. The Association cautioned on the results of surveys from Ibec and PWC as they are only representative of big business and semi-states and do not show an inclusive picture of the whole economy.
The seasonally adjusted Live Register figures for February confirm that 355,600 people are still signing on the dole, of which long-term claimants still account for 45.8%. The standardised unemployment rate has continued to fall and is now at 10.1%.
Commenting on the figures, ISME CEO, Mark Fielding, said, “We are starting to see signs of possible growth in the still fragile domestic economy, however, the situation for SMEs remains precarious. Our own figures indicate that the majority of SMEs will not be in a position to increase wages during 2015 and in a small percentage of cases further reductions will be necessary.’
“While forming an important part of the economy, big business, semi-states and multinationals do not, in any way, reflect the reality on the ground for the 200,000 SMEs, representing over 99% of all businesses in the country. We know that there is a dual economy and that big business is doing better. The headline figures from big business surveys, which are unrepresentative, have created strange bedfellows, as they have been embraced by trade unions and labour ministers to create unrealistic pay expectations, and cannot be used across the economy as the ISME survey proves.”
The Association called on the Government to:
Reduce government influenced business costs to below the EU average.
Ensure real measurable access to credit for viable SMEs.
Outsource more state sector services to SMEs.
Reform the social welfare system to make it more profitable to work.
Expand the export capacity of the SME sector through soft supports.
Attack the scourge of ever-increasing black economy activity.
“Our Labour politicians, trade unions and, now it seems, our big business and semi-state lobby group must be reminded that competitiveness and productivity growth provide the fastest and clearest route to higher living standards. The incessant calls for ‘pay rises’ must be focussed on ‘take home pay’ and a reduction in the ‘tax wedge’, rather than another increase in business costs through wage increases,” concluded Fielding