Mr. Mark Fielding:

I thank the Chairman. I will be well within the five minutes. My presentation will be short, but not sweet. On the review of the general scheme of the national minimum wage, there are a few things ISME would like to bring to the attention of the committee.

Under section 12(1) the commission states:

[T]he Commission shall make such recommendations to the Minister that are designed to set a minimum wage that, is fair and sustainable, and when appropriate, is adjusted incrementally, and that, over time, is progressively increased.

When I did my mathematics, the term "incremental" would be positive but could be also negative. The phrase "progressively increased" means that instead of having an evidence-based inquiry into the minimum wage we are already stating that this will be increased. We would suggest that instead of having the wording I have read out, the section should state:

The commission shall make such recommendations to the Minister that are designed to set a minimum wage that is fair and sustainable and, when appropriate, is adjusted and that, over time, is progressively adjusted without creating significant adverse consequences for employment and competitiveness.

That brings us to the issue of competitiveness and productivity in the country. Changing the wording would allow the low pay commission to make recommendations based on empirical evidence and not to be constrained by a political implication that wages will always rise. We also feel that the deliberations of the low pay commission must be aided and supported by accurate and relevant facts and figures so as to protect businesses and the jobs therein.

Under the functions of the commission, we see words such as "productivity" and "national competitiveness" mentioned. As we know, figures like GDP and GNP mean different things to different people, and we need to be very careful that when we examine these issues that GDP figures are not used because we do not feel that would give an accurate measurement of the sectors that are mainly involved in the national minimum wage.

When we talk about competitiveness, there is much disagreement about how it can be measured. We would suggest that all deliberations within the low pay commission would be transparent and dissimilar to previous exercises like the famous benchmarking, where decisions were carried out behind closed doors, in that all of the decisions of the low pay commission would be seen in open court.

We hope the low pay commission will take into account the knock-on effect that changes to the national minimum wage will involve. It is imperative that the totality of the increases in the national minimum wage will be taken into account.

In the past relativity and differentials were used. If there is an increase of 4%, 5% or 10% in the minimum wage, people on €12, €13 or €14 an hour will look for similar increases. That then ripples through the economy and definitely has to be taken into account.

When I was here before we spoke about the fact that the real concern of workers is not the national minimum wage, which is subject to tax deductions, etc., but rather what people take home in their take home pay. The low pay commission should concentrate on growth, the net effect and the cost to employers. There is a tax on employment in this country, that is, employers' PRSI. We have been always against a national minimum wage and have always looked for a low pay commission or at least a minimum incomes policy to be put in its place. However, as this is a fait accompli, we trust that the low pay commission will be transparent and will take all relevant information into account, not just the headline figures of GDP and GNP.