Matt Shanahan (Waterford, Independent)
Link to this: Individually | In context | Oireachtas source

I return for a moment to the idea of a national median wage as opposed to a sectoral median wage. For example, in the pharmaceutical sector, the median wage would be far different to that of a courier company. How will the Low Pay Commission's research in the future reflect that? We have such a strong foreign direct investment component in the economy at present. It is probably skewing where the median should fall, certainly at the high end.

I have already raised the future analysis that the witnesses are doing. I believe they need to seek greater engagement with more employer bodies in the future to develop their analysis. From what I am hearing, there has not been the level of engagement that is required, particularly with the small and medium enterprise sector, which, at the end of the day, is the largest employer in this country. I have spent time working in the enterprise sector. I hear about the difficulties to business. Mr. Courtney mentioned the number of businesses that fail at start-up. That is because it is so hard to start a business. Senator Ahearn was talking about where the living wage might fall when looking across economies. Looking at the component costs of utilities in a business compared with five years ago, they are significantly higher. That has an effect on the profitability of businesses and what they can pay.

Regarding the research and analysis that the Low Pay Commission is providing to Government, would it consider doing research to support the value of low-paid work and how low-paid sectoral employers could be supported? For example, if a guy is coming back into employment on a job activation scheme, the chances are that he will be paid the minimum wage. He or she may be low skilled and doing a low-value job. With the rising cost of the minimum wage, employers will reduce that amount of activity.

That means the person will not remain in the workforce. The commission needs to carry out a sectoral analysis for small businesses in order to highlight to Government circumstances where we may have to continue providing support. If we are going to provide support via social welfare for people who are not working, it is far better to keep them employed for the myriad of reasons, such as social and economic, that we are aware of. I ask that the commission might look at something like that because I believe the Government has, in its drive to move on and to reflect economic activity and the number of people working, made a very advanced step, but we have imposed a significant cost on small businesses in particular. I can tell our guests that, in light of where the minimum wage rate stands, trying to start a microbusiness and employ two or three people is very difficult to do.