The Minimum Wage

22nd July, 2009

Cutting the minimum wage is now been floated by the Government as a key way of restoring our national competitiveness. I know that more changes in salaries and wages is just crucial for getting jobs again but I am very skeptical as to whether changes in our minimum wage will contribute to this at all. This is for the reason that the bulk of our competitiveness problems do not lie at the base of the salary ‘ladder’, they instead reside in the middle and upper tiers of it. Somebody earning 18,000 euro is not causing our competitiveness to be eroded.

Furthermore you cannot make decisions on this in isolation of what will happen with the tax code. For those at the end of our income ladder to be hit with tax increases and a reduction in the minimum wage would be, as Leo Varadkar said this morning on Morning Ireland, indecent.