Labour Court wants minimum wage of €8.65

DonJose · 29-11-2006 11:16pm #1

Labour Court wants minimum wage of €8.65
http://www.rte.ie/business/2006/1129/wage.html

Is this country a sinking ship? Are we calling out for a recession? We have lost over 30,000 manufacturing jobs in the past 4 years due to high operating costs and low productivity. Now the labour court wants to raise the minimum wage by 13% from €7.65 to €8.65 an hour.

Karoma · 29-11-2006 11:20pm

Moved to the new and wonderful Economics forum from old and dirty AH. Feel free to bounce it ...um,back if needs be.

John R · 30-11-2006 2:17am

Most of those manufacturing jobs have gone to places where €8.65 a week would be uncompetitive. there is no way of competing with the likes of India or China in certain sectors without putting severe import rtestrictions in place.

The vast majority of people effected by the minimum wage are in the service industry in jobs that cannot be outsorced. Of course they are increasingly jobs that are dominated by immigrants so we are now importing the low wage workers, a much better system.

Frankly people who complain about improving the condition of the lowest paid in our country because it might have an effect on the economy make me sick.

They are inevitably people who enjoy a high standard of living in our booming economy and are quite happy to do so on the backs of others who they would deny a similar standard of living to.

OTK · 30-11-2006 2:24am

Minimum wage in European countries:
http://www.fedee.com/minwage.html

DonJose · 30-11-2006 3:00am

John R wrote:

Frankly people who complain about improving the condition of the lowest paid in our country because it might have an effect on the economy make me sick.

Who is complaining, I'm just stating that Ireland is pricing itself out of the competitive market. The minimum wage in the US is $6.50, thats €4.95. How many companies can absorb 13% pay rises, plus the upcoming 20% ESB rise. What few manufacturing jobs are left will be going to eastern europe. Multi-national companies make up 20% of the Irish GDP. One of them, Dell are planning on opening a plant in Poland, expect to see job cuts in Limerick when this plant is up and running. LOL Ireland is training the foreign nationals to take their jobs abroad.

Tricity Bendix · 30-11-2006 10:54am

While it is obvious that a €1 increase would be too drastic and immediate a change, the minimum wage should be reviewed regularly so as to keep in line with inflation and inter-temporal PPP.

Also, Google continue to increase their investment in Ireland, so I don't think the good ship Ireland Inc is sinking anytime soon.

mountainyman · 30-11-2006 11:37am

There are no multinationals setting up in Ireland to pay 8.65 an hour. On the other hand abolishing VAT would effectively guve the lowest paid a 20% pay rise.

MM

Andrew 83 · 30-11-2006 1:46pm

DonJose wrote:

Who is complaining, I'm just stating that Ireland is pricing itself out of the competitive market. The minimum wage in the US is $6.50, thats €4.95. How many companies can absorb 13% pay rises, plus the upcoming 20% ESB rise. What few manufacturing jobs are left will be going to eastern europe. Multi-national companies make up 20% of the Irish GDP. One of them, Dell are planning on opening a plant in Poland, expect to see job cuts in Limerick when this plant is up and running. LOL Ireland is training the foreign nationals to take their jobs abroad.

While transfer pricing remains legal in Ireland they won't be in that much of a hurry to leave.

J.S. Pill · 30-11-2006 3:42pm

OTK wrote:

Minimum wage in European countries:
http://www.fedee.com/minwage.html

IBEC have pointed out today (see here) that Ireland has the highest minimum wage in Europe. According to the above chart they're absolutely right but, Just to point out the obvious, these figure aren't much good without cost of living figures.

eclectichoney · 30-11-2006 7:38pm

DonJose wrote:

Labour Court wants minimum wage of €8.65
http://www.rte.ie/business/2006/1129/wage.html

Is this country a sinking ship? Are we calling out for a recession? We have lost over 30,000 manufacturing jobs in the past 4 years due to high operating costs and low productivity. Now the labour court wants to raise the minimum wage by 13% from €7.65 to €8.65 an hour.

actually i think you'll find productivity in the manuf. sector in recent years hasn't been as low as for the overall economy. With nominal compensation growing by around 5% p.a. there is certainly some justification for increasing it, i mean people can't really argue that it is causing unemployment as an awful lot of minimum wagers work in hotels and restaurants sector where employment has been increasing! It is the second highest in Europe (as a % of ave wages) though but overall compensation is also similarly in excess of the EU average. From a competitiveness POV there are certainly problems, but that's not due solely to the min wage.

netwhizkid · 30-11-2006 7:48pm

It is funny to hear people complaining about the Minimum Wage, I bet if they had to live off it for a week or two they would sing a different tune. This country is a total disgrace in terms of wages and the cost of living. People earn pure pittance say €7 or €8 an hour and they are then hit with PRSI. PRSI is the biggest disgrace in Europe, you get nothing in return for it considering there is African Dictatorships with better healthcare systems.

Hundreds of thousands of people are paying huge PRSI that is worthless (anyone visit a public hospital lately??) I think that PRSI should be made voluntary for people who are paying Private Health Insurance, and over half the country are at this stage, you should be allowed to choose do you want Private or Public Health and Pension. Paying both is a joke and a burden to the average workers who cough out usually over a €1000 a year for say two people eg. married couple.

While the majority of people on the Minimum wage are exempt from PAYE, go a little bit above the Minimum and the tax you pay lets you with less than the Minimum making you better off to be on it in the first place. Our taxation is a disgrace and while the common worker is constantly being exploited and left with pittance the fat cats of industry who make multiples out of the worker end up paying no tax hardly.

It is the employers and business of Ireland who should be taxed and reward the common worker. I know for instance in my own area one business who was paying its workers the minimum €7.65 an hour in a domestic situation yet were charging the client over €100 an hour for what the employee was doing. This is exploitation and is openly encouraged and rewarded by the Fianna Fail/Progressive Democrats government.

Don't waste your vote people!

eclectichoney · 30-11-2006 8:07pm

actually prsi funds social insurance i.e. jobseeker's benefit. then there's the health levy - 2% which funds the health part afaik??

nesf · 30-11-2006 10:27pm

Netwhizkid, I don't think you understand how our tax system works and how PRSI works etc.

Plus ever been to the dentist?

FlutterinBantam · 30-11-2006 10:49pm

I see an increase in the min wage up to 8Euro coming up

BigWilly · 01-12-2006 1:57am

mountainyman wrote:

There are no multinationals setting up in Ireland to pay 8.65 an hour. On the other hand abolishing VAT would effectively guve the lowest paid a 20% pay rise.

MM

In one way it will. However, because they earn less money and have less spending power, it will only be the rich who benefit in any major way. I don't think you've really thought that through.

keynesian · 01-12-2006 12:51pm

John R wrote:

Most of those manufacturing jobs have gone to places where €8.65 a week would be uncompetitive. there is no way of competing with the likes of India or China in certain sectors without putting severe import rtestrictions in place..

I think you ment inconsevable in sted of uncompetitive. DonJose, get a grip, who do you think get €7something, we lost our competitive edge back in the 90s in manufacturing. Poeple in Idia with degrees in Clown College, have better qualifitions & work harder. Retail, Contruction, services, and the list goes on get more then €8.65per hour, with the exption of maybe brown thomas and ugc.{pennys get more, think about that}. The increase is in reality not that big if any thing.

Ask the cleaner in college/work place how much they paid Or ask how much they get paid in aldi. This will efect the marginalized and will not efect over all compeditivens. We are know compeating for jobs whos wage are safely above min wage, a point I beleive made earlyer.

Time Magazine · 01-12-2006 1:09pm

netwhizkid wrote:

People earn pure pittance say €7 or €8 an hour and they are then hit with PRSI ... PRSI is the biggest disgrace in Europe ... our taxation is a disgrace and the common worker is constantly being exploited and left with pittance ... This is exploitation and is openly encouraged and rewarded by the Fianna Fail/Progressive Democrats government ... Don't waste your vote people!

Okay...

Everyone is encouraged to discuss topics on this forum and air their views. The odd satirical rant, where relevant, is worthy of space. However your post was completely irrelevant and basically constitutes spam. Your gripes with the government are well-known and if confined to the right place, like a reasonable discussion on the social consequences/fallout(?) from the Celtic Tiger, would be welcome. However your qualms with PRSI, completely unjust I might add, are definitely not welcome on the completely unrelated topic of minimum wage and the issue of competitiveness that the OP raised. Furthermore although economic policy is played out through the framework of political institutions and thus bias is inevitable, comments such as "exploitation ... is openly encouraged and rewarded by Fianna Fail/Progress Democrats[sic] government" will result in a ban. Founded criticism of the government is encouraged, but this is a relatively high-brow forum and any more of this tripe will get you banned. Sorry.

I'm not trying to scare you from posting here, and I hope your next contribution will be more beneficial to the discussion.

Tricity Bendix · 01-12-2006 2:46pm

An increase on the minimum wage would almost definately lead to an increase in food prices as wage bills in slaughter houses rise. I'd prefer to focus on making the minimum wage accessible to all workers (e.g. mushroom pickers) than artificially inflating the incomes of those already in receipt of it.

DonJose · 01-12-2006 4:15pm

b.ie curious wrote:

Google continue to increase their investment in Ireland, so I don't think the good ship Ireland Inc is sinking anytime soon.

To be honest, workers in the manufacturing sector are not highly educated and the Googles and Microsoft won't be wooing these workers with job offers. Most of the new jobs created by Google are going to those with language skills, which sadly the Irish are not renowned for.

Another manufacturing company bites the dust in Ireland, even before the 13% minimum wage increase comes into effect. Magna Donnelly has decided to close its plant in Naas, Co Kildare by the end of 2007 with the loss of 280 jobs. The company blamed, "fierce competition and high costs for its decision"

http://www.rte.ie/business/2006/1201/jobs.html

Glanbia shuts down its Roscommon cannery and then 2 weeks later invests €27m in Nigeria & China. Expect more and more closures over the next year.

Glanbia to shut Roscommon cannery
http://www.rte.ie/business/2006/1114/glanbia.html

Glanbia invests €27m in Nigeria & China
http://www.rte.ie/business/2006/1130/glanbia.html

keynesian · 01-12-2006 8:48pm

I do conseed that rise in min wage would have an inflationary preaser, to want could be a stressed ecomony. National wage agreement is there to curve this, ok, as long as it holds together. I think you'll find min will help the marginelized and I beleive have little efect on inflation.

Does any have stats on who's getting less then E8.64 at the moe.

We're probly going to loss alot more jobs befor '08. Goble Open Market can really suck sometime, but it does have it's benifits. If we are going to compete on the goble job market it's not going to be on price. I think it's too late for that.

Right_Side · 03-12-2006 1:00am

Does it really matter what the minimum wage is (once its not too high!)? What’s the point of it? I very much doubt many people have to work for €7.65 an hour. Therefore, the market is leading to a clearing rate above the set minimum wage and therefore the minimum wage itself is redundant. Companies just wouldn't get and certainly wouldn't retain staff at that rate.

I am a mere student and there is no way I would would work for €7.65 an hour in any capacity.

Time Magazine · 03-12-2006 1:27am

Right_Side wrote:

Does it really matter what the minimum wage is (once its not too high!)? What’s the point of it?

Seriously Michael, aside from netwhizkid's rant, that's the most ignorant sentence I've read on this forum yet. The minimum wage is the main valuation for low-value work. Often these people are the least educated and poverty-endangered in our society, the people we should aim to protect and aid the most. In case you've forgotten since last year, we have pretty substantial problems with regard relative poverty in this country which is the source of many of the social problems which affect us all. Furthermore, the minimum wage is the main point of reference for the encouragement for long-term unemployed to enter the labour market.

I very much doubt many people have to work for €7.65 an hour.

And therefore they should all be allowed to eat cake? Tesco hire 11,800 people, probably 75% being foot-soldiers. Spar employ 5,000 people with similar figures. Tens of thousands of people are hired in the low-value services sector, the minimum wage being the main point of reference for their wage-rate. Thousands of people, probably tens of thousands of people, are on minimum wage

Therefore, the market is leading to a clearing rate above the set minimum wage and therefore the minimum wage itself is redundant. Companies just wouldn't get and certainly wouldn't retain staff at that rate.

The market clearing rate is well below the minimum wage. However it is not an exogenous parameter, it is most certainly an endogenous variable and the demand market adjusts to accept its legislation. I suggest you go beyond the simply neo-Classical analysis and read Myth and Measurement: The new economics of the minimum-wage. It's in the Berkeley Counter-Reserve. Companies do retain staff at that rate.

I am a mere student...

Perhaps you should have suffixed you post with this

.

...and there is no way I would would work for €7.65 an hour in any capacity.

Lucky for some. I know several people with dependents who are minimum wage.

The minimum wage is a vital element of social policy. I encourage you, the hater of the non-working class, to consider whether we should aim to maximise the returns to low-wage workers subject to obvious competitiveness constrains, or provide excuses for said non-working classes to remain on unemployment benefit.

Right_Side · 03-12-2006 1:48am

Mcdonalds.ie "Pay Commitment – yes McDonald’s in Ireland pays a significant premium on top of the minimum wage."

Struggling to find anything else online.

But my jobs email every so often would indicate that no-one is working for the minimum wage as all offers are well in excess of it.

You say "The minimum wage is the main valuation for low-value work", why exactly should the value of "low value work", as you put it, be determined by a politican? Shouldn't the market not decide it? Which it is because only people with severe information problems i.e. a foreign immigrant in the country about a week is working for the minimum wage.

As for them remaining on UE benefit if the minimum wage isn't increased, well if we went a few years without indexing that to inflation then they would be forced to come to the jobs market which will index itself to inflation without any "guiding hand" and its evidently already doing it.

Time Magazine · 03-12-2006 2:11am

Right_Side wrote:

Mcdonalds.ie "Pay Commitment – yes McDonald’s in Ireland pays a significant premium on top of the minimum wage."

I don't know about McDonald's pay schedule, but I can't imagine they pay more than €8.50 than minimum; i.e. in or around the proposed new minimum. Fair play if they do, though.

But my jobs email every so often would indicate that no-one is working for the minimum wage as all offers are well in excess of it.

The last SU email, Dec 1st: Total of 25-30 hours a week is available spread over weekdays and weekends. the salary is 8.00 Euro per hour.

Nobody is arguing that people do get over minimum wage. Tens of thousands are on, or on less than, the "minimum wage" of €7.65. This is particularly pertinent outside of Dublin.

You say "The minimum wage is the main valuation for low-value work", why exactly should the value of "low value work", as you put it, be determined by a politican? Shouldn't the market not decide it?

The market should certainly not decide it, no. Nobody else is advocating this, we're all considering whether the proposed increase would be too severe a hit on our competitiveness (I've yet decided). It should be a government decision based on the method of the market. Of course this opens the labour market to problems, but it also acts as an excellent anti-poverty strategy. Certainly an analysis of (i) poverty in the USA and Ireland, and (ii) the unemployment rate in the USA of Ireland suggests a system of equitable market re-distribution can result is lower unemployment.

Which it is because only people with severe information problems i.e. a foreign immigrant in the country about a week is working for the minimum wage.

That's absolute bullshit. Provide source please.

As for them remaining on UE benefit if the minimum wage isn't increased, well if we went a few years without indexing that to inflation then they would be forced to come to the jobs market which will index itself to inflation without any "guiding hand" and its evidently already doing it.

Ah yes, the starve the poor argument. There are, of course, no externalities in lowering real payments to the unemployed. Relative poverty stays constant; disaffection stays constant; anomie does not occur; social exclusion doesn't happen; the inability to buy school books raises educational standards and therefore social mobility and equalities of opportunity improve; less people are attracted to drugs; children don't go hungry. Of course. Of course.

Grow up.

Our unemployment rate is extremely low; near-zero. Internationally, it is the source of jealousy to all of the OECD. Yes we should work to lower it ad infinitum, but suggesting lowering it requires kids going hungry is ludicrous.

hmmm · 03-12-2006 2:56am

What are the Labour Court doing issuing recommendations on the minimum wage? They're there to adjudicate on disputes, not to act as an arm of SIPTU.

nesf · 03-12-2006 3:01am

Ibid, I think Right_Side's original question is a very important one. I would not call it ignorant. A bit general perhaps but to simply dismiss it as irrelevant is a bit pointless if you wish to actually debate this topic.

Ibid wrote:

The market clearing rate is well below the minimum wage. However it is not an exogenous parameter, it is most certainly an endogenous variable and the demand market adjusts to accept its legislation. I suggest you go beyond the simply neo-Classical analysis and read Myth and Measurement: The new economics of the minimum-wage. It's in the Berkeley Counter-Reserve. Companies do retain staff at that rate.

I suggest you read this: http://www.epionline.org/studies/epi_njfastfood_04-1996.pdf

Then do a quick google and you'll find plenty of academics berating that book for the quite major issues in it's methodology and conclusions.

Apologies for the late edit but I only remembered that I'd heard a lot of critisism over that book a bit ago and I thought it might be an important thing to bring up since you seemed to base quite a bit of your analysis upon it's conclusions.

Oh and found this on my travels, I found it amusing.

http://ecsocman.edu.ru/images/pubs/2003/08/30/0000096063/freeman_warx20ofx20thex20models.pdf

Sonnenblumen · 03-12-2006 5:37pm

DonJose wrote:

Labour Court wants minimum wage of €8.65
http://www.rte.ie/business/2006/1129/wage.html

Is this country a sinking ship? Are we calling out for a recession? We have lost over 30,000 manufacturing jobs in the past 4 years due to high operating costs and low productivity. Now the labour court wants to raise the minimum wage by 13% from €7.65 to €8.65 an hour.

This country is buckling form overpaid underperforming Civil and almost Civil Servants. I look forward to the day when such monoliths no longer exist.
Top of my hit list will be HSE - the most fundamentally incompetent cohesive bunch ever to emerge. Blood on their hands, shame on you!!

james80000 · 03-12-2006 6:15pm

Right_Side,

Plenty of people work for the minimum wage, especially outside of Dublin. And the market clearance rate is definitely below the minimum wage in Ireland at the moment, perhaps it wouldn't affect you personally (the mere student my arse- I have never worked for more than the minimum wage and I'm a student), but if we suddenly lowered the minimum wage then our country would be awash with companies exploiting the marginalised, non-nationals and less-skilled (unfortunately).

I don't think raising the minimum wage would have any serious impact on our competitiveness, and even if it did have an effect on our industrial sector, I'm tempted to say "so what?" as we are moving into the much-hyped "knowledge based economy" anyway! We simply cannot compete on cost anymore so why not just forget it! R&D, finance etc is the way to go.

mike65 · 03-12-2006 6:46pm

Does any have stats on who's getting less then E8.64 at the moe

.

About 20% of the working population pay no income tax - that should give you some idea how many people are on or near the minumum.

Mike.

The_Minister · 03-12-2006 7:30pm

Sonnenblumen wrote:

This country is buckling form overpaid underperforming Civil and almost Civil Servants. I look forward to the day when such monoliths no longer exist.
Top of my hit list will be HSE - the most fundamentally incompetent cohesive bunch ever to emerge. Blood on their hands, shame on you!!

This post is close to offtopic, and unproductive. We try to have calm, rational debate here. That last sentence would be more at home in After Hours.

Sonnenblumen · 03-12-2006 7:57pm

The_Minister wrote:

This post is close to offtopic, and unproductive. We try to have calm, rational debate here. That last sentence would be more at home in After Hours.

How so? Don't you read the newspapers?? For example, minimum wage is no threat to national competitiveness, but IMO opinion, incompetent and hopefully in time it can also be demonstrated that criminally negligent Agents of the State are more likely to cause longer term harm to nation's well being.

We do have the highest paid political reps in the eurozone and what policies do we see?? Precisely. Look to the State structures for many examples of malpractice.

Tribunal Legal fees alone are mightier than some of the more vunerable primary manufacturing industries which are susceptable to increases in Minimum Wages.

Concerning Productive points, how's this one: the minimum wage has never been responsible for the death of innocents, we cannot say the same for state servants.

Put it where you wish, no escaping reality.

Labour Court wants minimum wage of €8.65

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