TÁNAISTE MARY Coughlan has said there have been no discussions or proposals on the reduction of the minimum wage during the current social partnership negotiations.
She also said it would be inappropriate for her to make any comment on the minimum wage because, as Minister for Enterprise and Employment, she may be asked by the social partners to make a decision on it arising out of the negotiations.
However, in an indication that the proposal is unlikely to be taken any further in negotiations, she emphasised on three occasions when talking to journalists yesterday that the issue had not arisen during the talks.
The Tánaiste was responding to a call by the Small Firms' Association (SFA) that the minimum wage be cut by €1 to €7.65 an hour in order to maintain competitiveness and keep labour costs down.
Explaining why she could not give a view, Ms Coughlan said: "If there was a decision to do something on the minimum wage it may actually happen that I have to make the final decision on the recommendation from social partnership.
"Therefore I would not be seen to be independent if I was now to comment on anything that may or may not happen."
Ms Coughlan said the SFA had made its proposals and others had said it was unacceptable. "Therefore the only way in which this could be resolved, if it needs to be resolved, is through social partnership."
The SFA said a reduction in the minimum wage rate was needed to allow small businesses to regain lost competitiveness vis-a-vis their international competitors and to boost job prospects among younger people.
It said at €8.65 per hour the Irish minimum wage was the second highest in Europe, and was a major contributor to youth unemployment.
SFA director Patricia Callan said: "Ireland has 'lost the plot' in terms of having a competitive labour market. These minimum wage comparisons are symptomatic of what Ireland has become - a high-cost uncompetitive economy. If we continue in this way there is no future in Ireland for labour-intensive industries."
She said the minimum wage rate here was more than twice that of the US and 19 per cent higher than the UK. It was 13 times that of Bulgaria.
The SFA proposal was strongly rejected by the country's largest union Siptu. Its president Jack O'Connor described the proposal as "nonsensical grand-standing".
He said apart from the immorality of suggesting the country's economic difficulties could be resolved by crucifying those earning the minimum wage, it would do nothing to address the problems we face.
He said these problems had arisen from "spiralling, largely imported inflation and collapsing business confidence".
He said cutting the minimum wage would do nothing to resolve these problems, but could exacerbate them by depressing the spending power of consumers further.
The SFA proposal were also criticised by the Labour Party.
