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20.07.2015

HOTELIERS URGE GOVERNMENT TO REJECT PROPOSED INCREASE IN MINIMUM WAGE

5.8% Increase in Minimum Wage Would Have a Seriously Negative Impact on Competitiveness

 

 

Monday, 20th July 2015: The Irish Hotels Federation (IHF) today called on the Government to reject the almost 6% increase in the national minimum wage proposed by the Low Pay Commission. Mr Fenn, Chief Executive of the IHF, stated that such an unsustainable increase in the minimum wage would be seriously damaging to Ireland’s economic recovery in terms of future job creation and international cost competitiveness.

 

“The Commission’s proposal would place Ireland at the top of the minimum wage table in Europe, second only to Luxembourg. This makes no economic sense at a time when we’re coming out of the worst recession in the history of the State and our economic recovery is still fragile. The proposal is incompatible with the current economic situation and would act as an unjustifiable barrier to competitiveness and employment growth,” said Mr Fenn.

 

“The proposal puts at risk the viability of many small and medium sized tourism businesses, including hotels outside the main urban areas which are still struggling to recover,” says Mr Fenn. “Regional tourism is still heavily reliant on the domestic market, which remains subdued, so it is unrealistic to expect these businesses to absorb further costs. We’re therefore calling on the Government to reject this increase in the minimum wage.”

 

Mr Fenn states that hotels are very labour intensive business activities with payroll costs accounting for approximately 40% of turnover, up from 28% over the past 20 years. Many hotels, particularly in rural areas, operate on payroll costs well in excess of 40% of turnover. With the economy still fragile, an increase would jeopardise the hard-won competitiveness gains achieved and risk excluding young people from employment and opportunities for advancement.

 

 

ENDS

 

FOR INFORMATION:

Eoin Quinn/Barry Ryan                                                  Dublin office: 01 6798600    

Weber Shandwick                                                           Mobile: 087 2332 191 / 085 7287 326             

 

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