Retail members of the Irish Small and Medium Enterprise Association (ISME) have expressed concerns over a proposed increase to the minimum wage, claiming that it will lead to higher grocery bills. The Low Pay Commission recently recommended raising the minimum wage from €11.30 an hour to €12.70 an hour, a 12% increase. A decision on the minimum wage will be made in the October budget.
In a letter to Taoiseach Leo Varadkar, ISME highlighted the financial burden that such an increase would place on its members. The minimum wage serves as an important benchmark for most incomes up to €30,000 per year, according to ISME. Chairman Marc O’Dwyer expressed fears that the government may proceed with an “unaffordable and unsustainable increase” in payroll costs in January. He emphasized that the majority of Irish workers are employed by small and medium-sized enterprises (SMEs) and their earnings reflect this.
ISME estimated that the 12.4% wage impact of the national minimum wage increase would result in a 1% to 2.5% increase in grocery bills, depending on the size of the store. O’Dwyer argued that social welfare support should be used to address identified gaps, rather than increasing the minimum wage. He also pointed out that the government has already introduced measures that have added to payroll costs, such as an additional public holiday for St. Brigid’s Day, an increase in statutory sick pay, and domestic violence leave. While ISME acknowledged the positive intentions behind these measures, they believe that the cumulative effects have not been adequately evaluated.
In summary, the Irish Small and Medium Enterprise Association has raised concerns about the proposed increase to the minimum wage, stating that it will lead to higher grocery bills. They argue that the majority of Irish workers are employed by SMEs, whose current earnings reflect this reality. ISME suggests that social welfare support should be used to address gaps, rather than increasing the minimum wage. They also highlight the additional payroll costs introduced by the government through various measures. The impact of these cumulative costs has not been adequately evaluated, according to ISME. The decision on the minimum wage increase will be made in the October budget.