Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

I agree that the rate of unemployment is disastrously high at the moment and there is a lot of poverty associated with that. I agree with the witnesses that purchasing power is the key issue for everybody. NERI came before the committee and said that if people's purchasing power increased in other areas it would decrease pressure on the demand for the living wage. That is maybe one area of agreement in this discussion. How do we increase purchasing power in the economy in general? There are 350,000 people in deprivation and we have moved from 0.7% underemployment to approximately 7.4%. That is a problem which the Oireachtas has to deal with because I am talking about families, about people going hungry and being cold and about children not getting the opportunity to which they are entitled. This gives rise to generational societal problems which cause major difficulties for cohesion in society and will be felt not just in our generation but in that of our kids too.

I believe if people work hard, use their smarts, take risks and invest money they are entitled to fair compensation and a fair profit but there also needs to be a fair wage. That balance is what is necessary in this country at the moment. We do not want companies to make supranormal profits and people to be paid poverty wages at the same time.

For competitiveness we need to look at every space in society, and wages need to be almost the last place we look. I agree that universal social charges should not be levied at higher rates for self-employed people who have exactly the same income as employed people. Ms Callan is correct that we should not arrive at an arbitrary figure but it could also be arbitrary that a person would seek a freeze for a few years. What exactly are the economic boxes that need to be ticked so that, in three years' time if we are sitting here again discussing the matter, the Small Firms Association might agree that an increase in the minimum wage was necessary?

The delegates from NERI said that minimum wage increases that are smaller but more frequent are better for businesses. Instead of an employer looking down the barrel of a €1 increase to the minimum wage, would it be more desirable to have a 25c minimum wage increase over a period of four years? This would be easier for businesses at the edge to adjust to.

A major issue in this discussion is that one side says the minimum wage does affect employment rates while the other side says it does not. There has been a lot of research into the question in Britain and an official study has found that there was virtually no negative impact on job growth from minimum wage increases. In a lot of the studies I have done, an equal number of people state that it does affect employment as state that it does not. Accordingly, in the round it has very little effect.