Ms Maeve McElwee:

I am grateful for the invitation to address the committee on the issue of low pay and the concept of the living wage. I will outline IBEC's position on the national minimum wage in the first instance and will then ask my colleague, Mr. Fergal O'Brien, to address the economic background to these matters. The important element of the issue of the national minimum wage is that it needs to reflect the economic circumstances that obtain at any time. IBEC supports the principle of a national minimum wage but believes it is vital that the wage be appropriate, competitive and affordable, taking into account at all times the cost of living in the economy. An inappropriately large national minimum wage or any excessive increases to it can potentially damage employment growth prospects, business investment and, ultimately for many small firms, ongoing viability.

The data on the national minimum wage are incomplete but CSO statistics suggest that the number of those currently engaged in the national minium wage is not significantly different from the pre-crisis level. The estimated figure for 2007 was 4.9%, compared to the current estimate of 4.7%. This suggests we are not seeing a significant change in the demographic profile of people employed on the minimum wage.

The Low Pay Commission's review of the national minimum wage must be evidence based. It should take into account a number of factors including labour market conditions, international comparisons and competitiveness, sectoral and regional affordability and cost of living trends.