Investment and recruitment decisions being delayed.
Fragile recovery in danger from rash election promises on wages.
ISME, Tuesday 1st April 2015
At the release of the latest CSO Live Register figures, today (1st April), ISME, the Irish Small & Medium Enterprise Association, welcomed the growing pattern of monthly decreases in unemployment but warned against any wage increases in either the public or private sector. The Association cautioned that SMEs, already crippled by rising costs, are holding back on new employment in fear of unwarranted and uneconomic wage hikes as a result of political promises of increases in the national minimum wage.
There are now 350,600 people signing on the dole, a reduction of 4,700 in the month and 42,556 in the last year. The standardised unemployment rate has continued to fall and is now at 10%, however the worrying number of long-term claimants still account for 46% of the total. In addition there are still 86,000 people on activation programmes.
Mark Fielding, ISME CEO, commented, “Continued calls for wage increases are a huge cause of concern for SMEs already struggling to overcome rising costs and decreasing competitiveness. If the Government adopted a real enterprise focus rather than making populist wage calls, jobs growth in the economy would be much faster.
“The recent rhetoric and lip-service paid to the SME sector from government politicians must now be backed up by real action. We need a concerted effort to reduce the overall cost of doing business in Ireland. Consumer confidence will be restored through increased jobs; jobs will be created when costs are addressed. The issue and the solution are clear, hard government decisions and action rather than promoting populist wage increases.”
The Association called on the Government to:
Focus on cost competitiveness for the SME sector.
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.
“Government must address these pressure points through structural and policy changes to ensure that the fragile recovery is guarded as Ireland returns to positive growth.The very notion of pushing up wage costs fails to recognise the business realities, in what is still a very challenging economic environment”, concluded Fielding.