Bosses Lie To Attack Minimum Wage Workers

On the surface it looks like good news. If the media leaks are to be believed, next year we can expect an increase in the National Minimum Wage from €14.15 to €14.94. A rise of 79 cent or 5.58%.

Even this small boost is welcome, especially in light of new University College Dublin research revealing 1 in 3 workers in full-time employment earn less than a living wage. The extra bad news is that this proposed rise may not happen at all if the employers’ bodies get their way.

IBEC claims a wage increase “risks damaging employment and competitiveness while driving up price inflation.” We hear these same doomsday prophecies each and every time workers are offered even a crumb of an improvement to our pay or conditions.

And as usual, next to no evidence has been provided to back up these claims. So let us look at some evidence of our own for why this is a bare-faced lie.

To begin, wage rises do not increase inflation. This myth is wheeled out by bosses every time there is a call by workers for a rise in wages. Mainstream economists falsely pin inflation on a theory of supply and demand, in which low wages lead to a lower demand for goods, which causes disinflation and an overall drop in prices.

They ignore the fact that limits are set on supply and demand by productivity, as well as the role of profits on demand. Karl Marx correctly identified that any rise in wages will not affect the value or price of a produced item. What it does impact is the rate of profit, sliding the scale in favour of the worker and eating away at how much the boss is able to extract.

A wage rise brings down the pool of profit available to the bosses, lowers the average profit added to costs and for many products can force the bosses to lower prices.

They peddle this incorrect theory because it suits their agenda and allows them to preserve their rate of profit, or even allow it to rise. Speaking of which, let’s take a look at how the profit of the bosses has been faring the past few years and if it is really under threat as is claimed.

Between 2022-25 the increase in hourly profits was higher than that of wages, 12.9% compared to 10.9% across the whole domestic economy. In low-paid sectors such as hospitality however, the gap was much wider, profit increases being 37.4% compared to wages rising 13.2%. Nearly three times as high!

Another complaint is that Small and Medium Enterprises (SMEs/businesses employing less than 250 workers) will be hit hardest by a wage rise and be unable to cover the increased labour costs, especially in the face of increased energy and cost of living expenses (no mention about workers facing the same hardships of course).

But according to the Department of Finance, 76% of SMEs made a profit, with 14% making a loss and 10% breaking even. This was an increase over the previous two years, both in terms of higher profitability and a higher percentage of businesses turning a profit. Yet they claim to be on the brink of crisis?

Recent VAT cuts have also benefitted hospitality and other businesses such as hairdressers. The Minister of Finance says that these cuts “will cost €681 million in a full year… Furthermore, it will support more than 150,000 jobs in these sectors right across the country.”

So the government has given savings worth roughly €4,500 per employee to these businesses. And now these same businesses are hell-bent on stopping their own workers benefiting from these savings too.

We could spend all day going over more statistics and figures but I think it’s crystal clear that profits are rising, more businesses in total are turning a profit, and yet they will do all in their power to exclude low-paid workers from even a small share of the profits that the workers create.

The bosses and their lackeys can try and paint this as being in everyone’s interests as much as they like. But this is class warfare, plain and simple. And it’s a war on many fronts. In the North we have a similar situation with business groups attempting to strangle the so-called Good Jobs Bill, crying foul over the improvements in working conditions and trade union powers it could bring.

In the South public sector workers have voted overwhelmingly in favour of industrial action in the absence of a fair pay deal. A few short years ago, these people were hailed as essential workers and heroes throughout the Covid pandemic, and are now having to fight for a living wage.

We also see Dublin City Council attempting to raise social housing rents to market levels. Rent hikes during a cost of living crisis? At the same time as VAT cuts for business owners?! Explain to us how these are somehow in the best interests of workers and not just another excuse to pick our pockets to fill the ones of those already bursting at the seams?

We need to fight back. After many years of low activity there are signs that the sleeping giant of the Irish working class is starting to wake up. The near unanimous ballot by unions representing public sector workers has shown the mood is firmly in favour for a fightback.

If they are successful it will be a victory for all workers, not just those in the public sector. Despite the 1990 Act making it illegal to strike in solidarity, we must do everything in our power to support them and follow their example.

If you’re sick and tired of being told the same bullshit from our exploiters, then now is the time to join or become more active in your union and push for action in your own workplace.

And above all, if you agree that the only permanent solution to this situation is a rebellion to put workers in the driving seat of a planned economy, join the Red Network!