Retail Excellence Ireland (REI) has revealed that employer costs have increased by over €1 billion annually since the beginning of the economic crisis.
The news comes from a report commissioned by REI from DKM Economic Consultants to quantify the costs for employers of measures introduced throughout the period of austerity.
The report analysed the costs associated with changed overseen by the Government, including the abolition of the redundancy rebate, changes to illness benefits, employer’s PRSI reverted to 8.5% for some Class A workers and the abolition of employer PRSI relief on employer pension contributions for employees.
It also examined the consequences of the treatment of owner managers and the self-employed versus the employed.
REI chief executive David Fitzsimons commented, “Employers, over 90% of whom are SMEs, have taken major and significant cost hits over the period of austerity while also grappling with an unprecedented collapse in consumer demand.
“The cost of this burden transfer from the Department of Social Protection, in particular, is why the Irish Retail Industry is so sensitive to talk of additional compulsory State-mandated employment cost increases,” he said.
Fitzsimons also explained that the €1 billion plus financial ‘hit’ has also deeply affected the cost environment in which Irish retailers operate and explains why growth in Retail has been relatively soft compared to other sectors.
Annette Hughes, Director of DKM Economic Consultants, acknowledged that all segments of Irish society have been affected by austerity, but noted, “The specific analysis contained in this report illustrates the considerable employment cost burden passed on to employers, including the self-employed, as a result of austerity measures, which is estimated in a full year to be in the region of €1 billion.
“The burden has been particularly harsh for small-scale enterprises, which include many sole traders/self-employed, as the analysis estimates that the latter group suffered over one-half of the costs transferred to employers,” she explained.
As the Government begins planning Budget 2016, REI says that the Department of Social Protection and Finance must recognise the broader macroeconomic climate in which domestic industry operates, and that microeconomic jobs incentives schemes cannot overcome the cost burden being passed on to employers preventing them from creating employment.
“The Irish Retail Industry needs practical measures that reduce employment costs and support employment. This is why retailers and other SMEs look askance at talk of pay increases to the Public Sector, the cost of which roughly mirror the employment cost increases taken on by employers over the course of the economic crisis,” Fitzsimons concluded.
© 2015 - Checkout Magazine by Jenny Whelan.