The minimum wage will be increased to €7.65 an hour, Minister of State for Labour Affairs Tony Killeen has announced. Business organisations have criticised the rise and said it would cost Irish businesses millions of euro.
Mr Killeen said he accepted a Labour Court recommendation to increase the national minimum wage by 65 cent from May 1st.
"The rate of increase in the minimum wage, since it was introduced in 2000, had fallen behind increases in average earnings up to 2003. The most recent increase in February 2004 and the further increase in May 2005 brings them back into line," he said.
The national minimum wage was set at €5.59 per hour in April 2000. Since then there have been three increases, the last of which was an increase to €7 an hour from February 1st, 2004.
The Chambers of Commerce of Ireland said the latest increase would cost Irish businesses up to €250,000 per hour. Its chief executive John Dunne said: "It takes no account of the knock-on effect that the increase will have on other wage levels, which we estimate will cost business an extra €250,000 per hour as low-paid workers not on the minimum wage seek to protect their relative wage status."
Small Firms' Association director Pat Delaney said: "The increase will affect 4.6 per cent of the workforce and will directly cost business €113 million, without any increase in output. The thinking behind this decision needs to be explained."
Brendan McGinty of the Irish Business and Employers' Confederation said the rise would hurt the most vulnerable sectors of the economy, such as manufacturing, and would most likely put jobs at risk. Any increase in the minimum wage would push up the costs of goods and services, he said.
Irish Small and Medium Enterprise association chief executive Mark Fielding said the decision was devastating for many small companies, which had already experienced a 30 per cent average increase in business costs in the last three years.