"Harney refuses to rule out cuts in minimum wage"

the_syco · 21-07-2009 1:20am #1

http://news.eircom.net/breakingnews/16117366/
http://www.fingal-independent.ie/breaking-news/national-news/politics/minister-refuses-to-rule-out-cuts-in-minimum-wage-1831696.html

The Minister for Health has refused to rule out a reduction in the minimum wage. Mary Harney said that that for Ireland to remain competitive in spite of current economic difficulties, every option must remain on the table.
The minister was speaking following comments by economist Peter Bacon, who said downward adjustments of the minimum wage could not be avoided.

What sort of la-la land does she live in? If the minimum wage goes down, everything else stays the same price, and the poor will become homeless, as they won't be able to afford houses.

Pride Fighter · 21-07-2009 1:40am

Who cares what she thinks, her party is dead and she is not the minister for finance.

She is a political nobody.

The_Minister · 21-07-2009 1:50am

Firstly, no minister will rule anything out until the government has made its plan public, so I wouldn't read into this too much.

the_syco wrote: »

http://news.eircom.net/breakingnews/16117366/
http://www.fingal-independent.ie/breaking-news/national-news/politics/minister-refuses-to-rule-out-cuts-in-minimum-wage-1831696.html

What sort of la-la land does she live in? If the minimum wage goes down, everything else stays the same price, and the poor will become homeless, as they won't be able to afford houses.

The minimum wage reduces the number of jobs in the economy and raises prices.
This isn't really disputed by anyone with economic knowledge (as in professionals).

The trick is to balance those two concerns with the need for people to have a certain standard of living.
In the boom times, when there were more jobs than people to fill them, it didn't really matter if we had a high minimum wage - we didn't need more jobs.
In the recession, when we need more people working, we need more jobs.
Lowering the minimum wage is one way to create more jobs and preserve existing ones.

Pride Fighter wrote: »

Who cares what she thinks, her party is dead and she is not the minister for finance.

She is a political nobody.

She is one of the most senior ministers in the country, and one of the longest serving deputies.
She is not a political nobody.

Biggins · 21-07-2009 1:52am

She doesn't give a crap. She's out of here at the next election by her own choice I'm lead to believe.
She isn't going for re-election. I wonder why! :rolleyes:

She is one of the most senior ministers in the country, and one of the longest serving deputies.
She is not a political nobody.

Aye, at at one minister pension for every four years served, once again like she sits in the Dail bar, she's sitting comfortable.
She's not a political nobody, she's a political disgrace!

Permabear · 21-07-2009 8:09am

This post has been deleted.

Fulton Crown · 21-07-2009 8:18am

donegalfella wrote: »

This post has been deleted.

Spot on poster,,as previously said this was not an issue in a time of full employment.

I see Bacon is also advocating a review of the minimum wage.

I see no reason why this should not happen given the recent substantial drop in the cost of living.

rcecil · 21-07-2009 8:34am

It's easier to target victims than those with political power and connections. Ireland has done nothing to gangsters and banksters who ruined the economy through crass speculation.

Minimum wage earners pour all of their income back into the local economy.

Start cutting wages for the pigs at the trough and I might listen to an argument about cuts at the bottom.

gurramok · 21-07-2009 9:23am

Fulton Crown wrote: »

I see no reason why this should not happen given the recent substantial drop in the cost of living.

That drop in the cost of living was mostly from mortgage rates. There are no mortgage holders on minimum wage.

Soldie · 21-07-2009 9:52am

The government needs to strip at least a couple of euro off of the minimum wage, but the dole would need to be reduced simultaneously. They should reduce VAT to 15% while they're at it, too.

Fratton Fred · 21-07-2009 10:02am

half the country has had their wages hit, why should those on minimum wage get away with it?

It is fine to knock Tesco and Debenhams for charging more in Ireland than they do in the UK, but no one is able to point out that the minimum wage in Ireland is 50% higher than the UK.

Lockstep · 21-07-2009 10:06am

donegalfella wrote: »

This post has been deleted.

€8.65 is the minimum for experienced employees over the age of 18. To earn this you need to be over 18 and have at least 2 years employment experience.
If you're young and inexperienced then you earn less than €8.65.

What we have in Ireland is a "phasing in" of the minimum wage.

If you are under 18 then are entitled to €6.06 an hour.
If you are over 18 and in your first year of employment, then it's to €6.92 an hour.
If you are over 18 and in your second year of employment you can get €7.79.
I'm 20 and have worked in enough crappy jobs that I'm now entitled to the minimum wage for experienced adults. I'm not saying you in particular but I find it annoying when it is claimed that inexperienced youngsters are able to demand €8.65 an hour; they're not. Those who can claim it have put in work in order to be at that level of experience.

The_Minister wrote: »

The minimum wage reduces the number of jobs in the economy and raises prices.
This isn't really disputed by anyone with economic knowledge (as in professionals).

http://press.princeton.edu/titles/5632.html

Would you say that the above writers have no economic knowledge/aren't professionals?

Economists are just like historians/scientists etc. They will disagree on things, taking the opposing viewpoint does not mean a total lack of knowledge in the subject.

gerry28 · 21-07-2009 10:09am

There are no mortgage holders on minimum wage.

You would be surprised at the number of mortgage holders on min wage, particularly in the west of ireland and more rural areas.

irish_bob · 21-07-2009 10:10am

thier is no point in reducing minimum wage unless social wellfare is reduced significantly and thier is no appetite among the majority for cutting social wellfare , its by far the most sensitive and contensous area in an bord snip

instead public sector salarys should be cut across the board , starting with politicians , this will be much more palatable with the general public

Soldie · 21-07-2009 10:29am

kickoutthejams wrote: »

€8.65 is the minimum for experienced employees over the age of 18. To earn this you need to be over 18 and have at least 2 years employment experience.
If you're young and inexperienced then you earn less than €8.65.

What we have in Ireland is a "phasing in" of the minimum wage.

If you are under 18 then are entitled to €6.06 an hour.
If you are over 18 and in your first year of employment, then it's to €6.92 an hour.
If you are over 18 and in your second year of employment you can get €7.79.
I'm 20 and have worked in enough crappy jobs that I'm now entitled to the minimum wage for experienced adults. I'm not saying you in particular but I find it annoying when it is claimed that inexperienced youngsters are able to demand €8.65 an hour; they're not. Those who can claim it have put in work in order to be at that level of experience.

The current minimum wage is an entirely arbitrary figure. The government pumped up the dole and minimum wage during the boom years, both at rates exceeding that of inflation. This was nothing more than a vote-buying exercise, and was hopelessly naive on behalf of the government. I'm convinced that we'd still hear the 'targeting the most vulnerable' pleas even if the minimum wage was 10 euro. The problem is that we're 20 billion euro in the hole, and the lavish increases in government expenditure over the past 10 years simply need to be reversed. We're borrowing 400 million euro per week, and we have almost 500,000 people on the live register. Despite this, the government has not lowered the minimum wage, the dole, or VAT - it's shocking!

Fulton Crown · 21-07-2009 10:47am

gurramok wrote: »

That drop in the cost of living was mostly from mortgage rates. There are no mortgage holders on minimum wage.

Cost of living has dropped substantially even excluding mortgage rates.

Although I would hve no confidence that a reduction in the minimum wage would see a further price drop.

I would bet on our noble band of "entrepeneurs" and self employed pocketing the difference ..as they have always done.

Lockstep · 21-07-2009 10:52am

Soldie wrote: »

The current minimum wage is an entirely arbitrary figure.

THe government didn't just go "Ah sure we'll stick it at this sum"
http://www.irishstatutebook.ie/2000/en/act/pub/0005/sec0011.html
As incompetent as this government is, they do take outside factors into account.

Soldie wrote: »

The government pumped up the dole and minimum wage during the boom years, both at rates exceeding that of inflation. This was nothing more than a vote-buying exercise, and was hopelessly naive on behalf of the government.

Not really as those relying on the dole/ minimum wage are the least likely to vote.
If you're going for vote buying the middle class is the best bet.

Soldie wrote: »

I'm convinced that we'd still hear the 'targeting the most vulnerable' pleas even if the minimum wage was 10 euro. The problem is that we're 20 billion euro in the hole, and the lavish increases in government expenditure over the past 10 years simply need to be reversed. We're borrowing 400 million euro per week, and we have almost 500,000 people on the live register. Despite this, the government has not lowered the minimum wage, the dole, or VAT - it's shocking!

Those on the minimum wage are also consumers, and when you're earning sub€9 an hour, the majority of your wages are going to be spent as you'll be paying for necessities (which is what we need these days as people are spending less)
I'd agree with the need for cutting VAT to stimulate spending.

Lockstep · 21-07-2009 10:53am

Fulton Crown wrote: »

Cost of living has dropped substantially even excluding mortgage rates.

Although I would hve no confidence that a reduction in the minimum wage would see a further price drop.

I would bet on our noble band of "entrepeneurs" and self employed pocketing the difference ..as they have always done.

I've heard that the COL has dropped.
Do you know by how much?

Biggins · 21-07-2009 11:25am

Fulton Crown wrote: »

I see no reason why this should not happen given the recent substantial drop in the cost of living.

http://www.independent.ie/business/irish/we-pay-up-to-27pc-more-for-food-than-rest-of-eu-1826424.html

*sigh*

the_syco · 21-07-2009 11:35am

Fulton Crown wrote: »

I see no reason why this should not happen given the recent substantial drop in the cost of living.

What recent drop? Food prices are the same.

Fratton Fred wrote: »

but no one is able to point out that the minimum wage in Ireland is 50% higher than the UK.

Pretty sure that's only a recent thing. IIRC 3 years ago, when the english pound was stronger, our minimum wage and their minimum wage was pretty similair...

gerry28 wrote: »

You would be surprised at the number of mortgage holders on min wage, particularly in the west of ireland and more rural areas.

There are also a few in the east, no doubt, who got 100% mortgages from sub-prime lenders (I think that's the phrase).

=-=

If you want to lower the minimum wage, you'd have to cut €100 off everyones dole money, or you run the rick of people being be better off on the dole than working minimum wage. And if you cut €100 off everyone on the dole, there'll be a lot of people unable to afford the basics.

=-=

To be honest, if you lower the minimum wage to 1998 levels, you'd have to lower the cost of everything else as well, including drink. 4 pints and a packet of tayto for a tenner? Ah sure :pac:

spank_inferno · 21-07-2009 11:37am

Fulton Crown wrote: »

Cost of living has dropped substantially even excluding mortgage rates..

Has it?
If its dropped I dont think its dropped by much.

The CPI may show drops in the price of mortgage costs, Clothing, travel, or luxury items like eating out & entertainment.

Such things arent exactly the staple purchases of those on the lowest rung.

Housing, food, the costs of heating your home, getting your kid ready for school in september, putting a couple of euro aside for xmas.... etc
These are the things minimum wage earners spend money on.

And very importantly almost all of it goes back into the local economy.

Shopping trips in New York, 3 weeks in Thailand, purchasing that nice german car, There are plenty of people in Ireland who this is their continued spending intention this year.

And I wager their numbers are much higher than those who actualy are on Min wage.

And besides... how much money would be saved anyway?
What difference would it make considering we allowed the government to give BOI/AIB/ Anglo-Irish almost 10 billion between them

Lets keep it in perspective people!

Fratton Fred · 21-07-2009 12:33pm

the_syco wrote: »

WPretty sure that's only a recent thing. IIRC 3 years ago, when the english pound was stronger, our minimum wage and their minimum wage was pretty similair...

£5.80 as opposed to €8.65 like for like. Based on an exchange rate of €1.40 to the £ the irish MW is still slightly higher.

Soldie · 21-07-2009 1:49pm

kickoutthejams wrote: »

THe government didn't just go "Ah sure we'll stick it at this sum"
http://www.irishstatutebook.ie/2000/en/act/pub/0005/sec0011.html
As incompetent as this government is, they do take outside factors into account.

I'm not quite sure how the link proves your statement.

Not really as those relying on the dole/ minimum wage are the least likely to vote.
If you're going for vote buying the middle class is the best bet.

The dole and minimum wage rose by most in election years, so I think it's safe to say that it was a vote-buying exercise.

Lockstep · 21-07-2009 1:53pm

Soldie wrote: »

I'm not quite sure how the link proves your statement.

11.—(1) The Minister shall, by order, after taking into account the impact the proposed rate may have on employment, the overall economic conditions in the State and national competitiveness, declare a national minimum hourly rate of pay for the purposes of this Act.

Soldie wrote: »

The dole and minimum wage rose by most in election years, so I think it's safe to say that it was a vote-buying exercise.

So any leglislation that is introduced around election time can only be a vote buying exercise?
The minimum wage was brought in April 2000. The next election wasn't for another 2 years.
The act was brought in by the PDs, they are party with the most overwhelmingly middle class support base.
It really doesn't smack of vote buying to me.

Darragh29 · 21-07-2009 2:08pm

I think we need to start looking at the concept of a MAXIMUM wage, particularly in the public sector...

oppenheimer1 · 21-07-2009 2:16pm

irish_bob wrote: »

thier is no point in reducing minimum wage unless social wellfare is reduced significantly and thier is no appetite among the majority for cutting social wellfare , its by far the most sensitive and contensous area in an bord snip

instead public sector salarys should be cut across the board , starting with politicians , this will be much more palatable with the general public

I'd actually disagree with that, public sector pay is far more contentious than social welfare payments. Its not as if unemployed people can go on strike!

Soldie · 21-07-2009 2:22pm

kickoutthejams wrote: »

11.—(1) The Minister shall, by order, after taking into account the impact the proposed rate may have on employment, the overall economic conditions in the State and national competitiveness, declare a national minimum hourly rate of pay for the purposes of this Act.

The current situation shows that the minister didn't take into account any of those things. Also, it's not as if they'll admit that it's adjusted to an arbitrary figure.

So any leglislation that is introduced around election time can only be a vote buying exercise?

I didn't say that.

The minimum wage was brought in April 2000. The next election wasn't for another 2 years.
The act was brought in by the PDs, they are party with the most overwhelmingly middle class support base.
It really doesn't smack of vote buying to me.

It was increased every year, but the biggest increases were in election years.

severely · 21-07-2009 2:24pm

Dropping the minimum wage and the Dole is a necessary evil. FF geared the country up to an unsustainable level, and the only solution to our woe's is to down-gear it just as fast. We have to become competitive on an international level. Take a look at the link below for a world comparison of where we are. Spain has a minimum wage of €600 per month. Our Dole is €800. It just doesn't add up. We aren't more talented,beautiful or hard working as FF like to tell us. Cheap credit caused a crazy boom and now its time to get back to reality.

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

Lockstep · 21-07-2009 2:30pm

Soldie wrote: »

The current situation shows that the minister didn't take into account any of those things.

This recession didn't occur because of the minimum wage.

Soldie wrote: »

Also, it's not as if they'll admit that it's adjusted to an arbitrary figure.

The Act provides guidelines as to what the minimum wage is built around. If it goes strongly against this, then it can be struck down as unstatutory.

Soldie wrote: »

I didn't say that.

Grand so, I as asking for clarification.

Soldie wrote: »

It was increased every year, but the biggest increases were in election years.

I can see why it would be increased every year (rising costs of living)
Source for "increased most during election time" please.

jmcc · 21-07-2009 2:37pm

Someone should put that useless eater on the minimum wage and see how she likes it.

Regards...jmcc

Lockstep · 21-07-2009 2:43pm

To be fair to her, she did introduce the minimum wage in the first place.

mike65 · 21-07-2009 2:45pm

CPI fell 5.4%, the reduction sans mortages - the "harmonised" index, is reckoned to fall 1.5% for 2009.

If you want a better idea of sector inflation or rather deflation, then clicky this PDF link

For the lazy, the below are year on year changes to end June.

Consumer Price Commodity Group Indices, June 2009
01 Food and Non-Alcoholic Beverages - 3.3
02 Alcoholic Beverages and Tobacco + 7.6
03 Clothing and Footwear - 12.2
04 Housing, Water, Electricity, Gas and Other Fuels - 25.6
05 Furnishings, Household Equipment and Routine Household Maintenance - 3.2
06 Health + 3.4
07 Transport - 6.1
08 Communications + 0.9
09 Recreation and Culture - 0.4
10 Education + 4.5
11 Restaurants and Hotels - 0.3
12 Miscellaneous Goods and Services + 8.5

"Harney refuses to rule out cuts in minimum wage"

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