Ms Patricia Callan:

Our submission has been circulated. Essentially, the National Minimum Wage Act 2000 is very clear in terms of what one is meant to consider in determining that rate. In our submission we have gone through each issue one by one and set out the reason we feel it is a valid argument for not having an increase in the minimum wage at this moment in time. We have gone further, arguing that we should freeze the minimum wage at its current rate so that it is not up for discussion for the next three years. The reason we have taken this decision is that there is a very strong sense that growth is returning to the economy, but from our members' perspectives it is all about stability, getting one's feet on the ground again and rebuilding the balance sheets. Many people are still heavily in debt and have not been paying themselves as they are trying to invest in the business again, and they really cannot have cost increases imposed upon them. This is the nub of the issue and it is where it differs from other discussions about pay rates. If businesses are levied with an increase in the national minimum wage there are no productive gains, so it is actually just a cost. It is very hard for any business operating on low margins to absorb costs at that level.

In terms of the low pay commission, as our chairman has mentioned, we were disappointed, given that many of our members who put themselves forward - real business people who are running real enterprises and employing people on the minimum wage - were not selected. The process was a written application and selection. There were no interviews and there was no sense on our side that those involved were trying to have the low pay sectors represented or, on the other side, low-paid workers. Where can they be seen? We need to have another look at the commission. I am concerned that if we establish this body and we are all meant to support it, it has to be independent and outside politics. We have to stop senior politicians from saying they expect a €1 increase. One cannot expect something if one puts it into the hands of an independent commission. Certainly, we need serious reassurances as a country about the process of the low pay commission.

I will take the committee briefly through the review methodology. In terms of the analysis - I am aware of this from the previous presentation - if people want more detailed charts and sources, we can forward them. In essence, we did an assessment of inflation, which is one of the biggest indicators. People always say one has to keep pace with the cost of living but, in fact, at the end of 2014 the cost of living in Ireland was 0.6% below 2008 levels.

Therefore, there is no reason to say that the minimum wage should be increased at this time. We have calculated that the minimum wage is 19% above the level established at the time of its introduction. If it had risen in line with inflation it would be just €7. By any metric, the minimum wage rate is very good compared to the cost of living index.

In terms of the movement in earnings of employees, all the unions have said that the race to the bottom is terrible, but during the crisis the number of people on the minimum wage fell. Therefore, that is not a valid claim. Some 4.7% of the workforce were on the national minimum wage at the end of quarter two of 2014, compared to the 2007 estimate of 4.9%.

We have also done an assessment in the context of median wages. Much of the discussion in the literature is about this concept, in that the ratio of the national minimum wage to the median wage has an important impact in terms of whether jobs are likely to be lost when it is increased. Because of our position on that metric, we believe, in the context of the literature, that it is likely that we will lose jobs if the minimum wage increases, because our overall wage bill will be too high and businesses will not be able to afford it. We have examined the sectoral and regional impacts in this respect. The minimum wage is a very blunt tool. It applies regardless of the type of business one is employed in or where in the country one is based. We all know there are huge variations throughout the country and that is why we are opposed to the use of this blunt instrument. It will have a destabilising impact in the sectors most represented in our association - namely, the accommodation and hospitality sector, retail and other services, and those services being provided outside the greater Dublin region.

For us the level of unemployment is the most serious issue. People seem to have forgotten that we have a shockingly high level of unemployment.