Ibec Criticises Talk Of 5% Raises
Published on Feb 2 2015 1:04 PM in Retail
Talk of large, widespread pay increases is reckless, foolish and at odds with economic reality, according to Ibec. The statement comes in reaction to comments from SIPTU that businesses and Government could afford raises of 5%.
The group says that many companies are still stuck in 'survival mode' despite better overall economic conditions, and keeping costs under control is vital to sustaining current employment levels and creating new jobs.
Ibec CEO Danny McCoy commented, "Talk of widespread large pay rises is ludicrous, when the country is only starting to get back on its feet. Clearly lessons have not been learnt from the crisis. The economy in money terms is still about 6% below its pre-crisis levels and overall prices are below where they were in summer 2008.
"In retail, for example, turnover is still nearly 20% down and businesses are constrained by boom time costs and charges. This needs to be reflected in pay expectations. Many companies are still fighting to stay in business. Others will be in a position to award modest pay rises, but only if the business can afford it," he continued.
He went on to explain that while many will see modest pay rises this year, the Government plays a crucial role in increasing take home pay. Ireland's marginal tax rate is considerably higher than in competing economies, which may limit investment and job creation. He also commented that high income tax is a "disincentive to work".
© 2015 - Checkout Magazine by Jenny Whelan.