Notes on the Front

What a way to spend some free time.  Over this long weekend I was going through past statements issued by the Small Firms Association.  You remember that little group – they demanded the slashing of the minimum wage. 

The SFA has never been a fan of the minimum wage.  That’s putting it mildly.  From day one they warned of all sorts of economic plagues if there was a floor put on wages.  Here’s just a taster from 2000:

Wow, thousands of jobs lost, thousands more  never to be created.  So I’m puzzled.  Why is it that between 2000 and 2007, over 400,000 jobs were created?  In the low-paid sectors – where all these jobs were supposed to disappear into the minimum wage ether – over 100,000 jobs were created?   Indeed, even the SFA’s own surveys showed considerable job creation by small businesses:

• 2000 64,201 additional jobs
• 2001 45,942 additional jobs
• 2002 36,283 additional jobs
• 2003 17,420 additional jobs
• 2004 36,238 additional jobs
• 2005 61,003 additional jobs
• 2006 50,243 additional jobs

And all the while, the minimum wage was increased, almost on a yearly basis. 

Okay, so that was in the past, during a period of economic growth (though it shows that growth and increased wages are not mutually exclusive – in fact, there intertwined); could it be that the Chicken Littles of the SFA are now, finally, right?  Not if you take their own statements at face value.

Patricia Callan, the SFA’s main Chicken Little, justified mauling the minimum wage by pointing to a survey showing that 18% of her members were concerned about the wage floor.  Okay, 18 percent – a few, but not many. 

However, according to the SFA’s own Annual Business Surveys, back in 2005, 56 percent of businesses surveyed said the minimum wage was a problem.  So, within three years the concern over the wage floor had, well, literally dropped through the floor.  So why is Ms. Callan making it all a problem when fewer and fewer of her members see it as a problem.

But what really confused me is their recent Annual Pay Survey. Now, I accept that I may be reading this wrong so please correct me.  But this is what the SFA says:

SFA 15th Annual Pay Survey reveals:

• Average SME earnings increased by 3.6% in 2007
• No one earns less than €19,077 per year
• 19% of employee grades earn up to €25,000
• 43% earn between €25,000-€35,000
• 23% earn between €35,000-€45,000
• 15% earn more than €45,000
• 4% have bonus schemes
• 22% pay maternity benefit above Social Welfare
• Average mileage allowance is 75 cents per mile

Did you get that second line?  ‘No one earns less than €19,077 per year.’  No one.  In July 2007 the minimum wage was €8.65 per hour.  Maybe my calculator is on the blink but for a 39-hour week that amounts to €17,542 per year.  So there’s no one on the minimum wage among the 1,000 + businesses the SFA surveyed. This chimes with the fact that only about 3% of the workforce is on the minimum wage.  So the question is . . . why the SFA’s attack on the minimum wage?

That’s, of course, if you analyse these things by the numbers.  The reality is more sordid.  The SFA is grandstanding, publicity-seeking, shifting the parameters; the lowest paid workers in the economy are not really a problem, not even among the SFA’s membership.  But they are a handy target for the SFA to use to gain their headlines.  To the SFA, the low-paid are not people, just an instrument in the PR department.

That’s what makes the organisation so dishonest when they feign concern over economic growth by arguing that promoting prosperity is best done by impoverishing people.  Because in the end, not even the SFA believes that.  It’s just something to say. That’s the last thing we need in these recession days.