Why Brexit could stop the Irish minimum wage rising

Small Firms Association says an increase could damage our SMEs...

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The the flag of the United Kingdom flies alongside the European and Irish Republic flag on a building in Sligo Insititute of Technology | Image: Potocall Ireland

The Small Firms Association (SFA) has cited the threat posed by Brexit as a major reason not to offer Irish workers an increase in the minimum wage.

The employers group has pointed to the falling value of sterling as making the country less competitive compared to our business counterparts across the Irish Sea – the country's goods are now 19% more expensive in the UK market than they were at the end of last year.

The SFA has said raising the minimum wage would only serve to place additional cost pressures on vulnerable small businesses and there is "no justification for doing so". One member said that it had "maxed out" at the current €9.15 hourly rate.

SFA's acting director Linda Barry said:

“Brexit must be a wake-up call to the Irish Government – competitiveness is crucial if small businesses are to withstand the impact of the vote.

"Exchange rate movements have already left Irish goods 19% more expensive in the British market than they were at the end of 2015.

"Now is the time for action to enhance the Irish business environment, not to create additional pressures for businesses.

"SFA members have identified wage inflation as the number one threat to their businesses over the coming year.

"This is despite the fact that many small businesses plan to give pay increases, where – crucially – the performance of the business allows."

The Low Pay Commission is set to present its report on whether the national minimum wage should be increased to the Government this week.