Tommy Broughan (Dublin North East, Independent)

I strongly commend my colleague, Deputy Willie Penrose, for using Private Members' business this week to highlight the appalling decision by the Government to cut the national minimum wage from €8.65 an hour to €7.65 an hour under the Financial Emergency Measures in the Public Interest (No. 2) Bill. The campaign to introduce a national minimum wage in Ireland was a long, difficult struggle led by the labour movement and by the Labour Party. One of the key figures in the campaign for a minimum wage was Mr. Peter Cassells, who prioritised this important campaign during his tenure as ICTU's general secretary.

I was honoured to be involved in the minimum wage campaign and I was delighted, as Labour's then spokesperson on enterprise, trade and employment, to support the introduction of the national minimum wage of IR£4.40 per hour under the National Minimum Wage Act 2000 - more than 100 years after the first minimum wage was introduced in New Zealand in 1896. I argued strongly at the time that the existence of a national minimum wage is a "statement of core values, providing a threshold of decency under which society agrees that workers' wages should not fall" and this is reiterated in our motion. However, it is also clear that since the introduction of the national minimum wage, it has operated in an effective way and has not been a disincentive to work. However, the appalling proposal to reduce the minimum wage will clearly have the opposite effect.

The experience in the US and the UK, for example, has proved that the introduction of a minimum wage is overwhelmingly positive in protecting the pay and conditions of the lowest paid, reducing the cost of social welfare payments and encouraging consumption. It has also been found that the existence of a minimum wage does not have a negative effect on job protection or creation. Landmark research in two US states by economists David Card and Alan Krueger in the 1990s found that an increase in the minimum wage did not lead to job losses. In general, they concluded that the existence of minimum wage regulations have negligible negative effects. This research has been supported by other Nobel Prize winning economists such as Paul Krugman and Joseph Stiglitz. In the UK, the impact of the minimum wage has been monitored since its introduction by Tony Blair and Gordon Brown in 1999. Various studies by the low pay commission and other bodies have found the minimum wage and increases in the hourly rate to have had a positive impact.

However, even in the face of all of this evidence to the contrary, the Minister for Finance and his colleagues continue to insist that they are reducing the minimum wage to address our high unemployment rate and fall in competitiveness. The Minister for Enterprise, Trade and Innovation said two weeks ago in the debate on the IMF/EU bailout: "On labour costs, we will reduce the minimum wage by €1 per hour...(based on ) research showing that a reduction in the minimum wage would result in an increase in employment in the medium term." There is no such research and slashing the national minimum wage by a euro an hour and by €40 per week will simply not achieve this objective.

The Government and, especially, our delusional Minister for the Environment, Heritage and Local Government, have also tried to argue that cutting the minimum wage was forced on us by the ECB, IMF and EU as the cut in is included as part of the "structural reforms" to facilitate a so-called "adjustment in the labour market" in the EU/IMF programme of financial support for Ireland. This is clearly untrue and the Minister was clearly lying-----

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