Job creation could be better if wage demands from unions, based on unrepresentative figures, ceased.
SMEs have capacity to increase jobs if cost increases are curtailed.
At the release of the Quarterly National Household Survey today (24th May), ISME, the Irish Small & Medium Enterprises Association, welcomed the gradual increase in jobs figures and warned the new Government to stand firm on exorbitant trade union wage demands. The Association cautioned on any premature rush back to the days of high wage increases while so many businesses struggled to meet their daily cost commitments, due to continued increases.
The Quarterly National Household Survey shows that 46,900 jobs were created in the last twelve months. There are still 179,500 people unemployed, of which 56.1% are long-term claimants. The seasonally adjusted unemployment rate has reduced from 9% to 8.3% over the quarter.
According to ISME CEO, Mark Fielding, “while there is positive jobs news, the predictable wage demands and ultimatums from trade unions must be met with firmness, based on real economic facts and not coloured by political wishfull thinking and cheerleading. This message must be consistent from both Government and IBEC, the representative of all semi-state companies and some large businesses, who together lost the plot in the tiger years”.
“ICTU, for its part, must focus on the expectations of the public sector and allow for a recovery before reasonable wage demands can be entertained. It must also stop the extremists within its ranks, holding the Dublin commuters to ransom for a 53% pay rise. Or have they lost control?”
“Meanwhile in the real world, the SME sector, representing 99% of all businesses in the country, is slowly recovering and those who can afford wage increases are agreeing between 1.5% and 2.5% increases, based on productivity improvements.”
The Association demanded that Government address the concerns of smaller businesses, the main job creators by;
Focusing on cost competitiveness, with a concerted effort to tackle SME business costs.
Using the tax and social welfare system to encourage employment.
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.
Introducing an independent Public sector Pay Commission.
Monitoring the availability of bank credit in the economy.
“In these days of e-commerce and globalisation it is imperative that indigenous Irish businesses can compete with their foreign counterparts. Wages are by far the largest component of business costs and must be managed. Now is the time for Government to be innovative and use the tax and social welfare systems to stimulate employment, rather than increasing employers’ costs”concluded Fielding.