The Small Firms Association has called on the Government to reject the proposed increase in the national minimum wage in the forthcoming budget to help small businesses cope with rising labour-related costs.
In its pre-budget submission, the SFA said there is a critical need to halt further wage hikes proposed by the Low Pay Commission to ensure the survival of viable enterprises.
In July, it was reported that the Low Pay Commission had recommended that the minimum wage should increase by 5.6%.
If the proposals are accepted by the Government, it would see the rate rise by 79 cent an hour from €14.15 to €14.94.
In its submission, the SFA said that the minimum wage has moved from €9.15 in 2016 to €14.15 in 2026.
"While the national minimum wage increased by 54.6% in the same period, the Consumer Price Index (CPI) increased by roughly 25% cumulatively from 2016 to 2026," according to the SFA.
SFA Director David Broderick said Budget 2027 must not include another increase in the minimum wage.
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"The Minister must reject the proposed increase by the Low Pay Commission to allow small businesses to better cope with ongoing increases in labour-related costs in recent years," Mr Broderick said.
Speaking on RTÉ's Morning Ireland, Mr Broderick added that it was a "substantial increase" for businesses when you look at the "accumulative cost".
He said: "We all want our workers to be paid well. The small business owner knows that their employees are their most valuable asset. But this is about the accumulative increase of costs."
Mr Broderick said wages are the highest cost, over energy. He said an increase in the minimum wage needs to track productivity.
"They are viable businesses but given the accumulation of costs over the last couple of years, given the changes in statutory sick pay, in auto enrolment and all these particular costs … there is just too much coming on at the one time at these businesses which are already operating on extremely tight margins," he said.
Mr Broderick said the low-paid worker who is struggling to get housing is not the fault, but you do not "fix a housing crisis by putting a small business owner into liquidation".
Social Justice Ireland Research and Policy Analyst Suzanne Rodgers said "if somebody has to go to work for 40 hours per week, at the end of that week, you should be able to get a paycheck that provides for the basics".
She said the difference between the minimum wage and the living wage is about €50 per week, meaning people are "working all week and still not able to make ends meet".
The minimum wage could be reduced if accommodation costs and utility costs were reduced, she said.
Ms Rodgers said "going to work does need to pay".
She said research has shown that rises in minimum wage do not impact job losses and job creation but do have an impact on productivity.
"Generally, minimum wage is better for everybody, it is better for society, the trickle-down argument has proved to be not correct …
"Putting money into the pockets of low-income households is actually better for the economy much more broadly."
Business group Ibec has described the proposed increase as extremely concerning for employers as it is nearly double what some companies can afford or anticipated.
In its Pre-Budget Submission, the Irish Congress of Trade Unions (ICTU) called for a €1 increase in the minimum wage.
ICTU said that if the Government is serious about people's living standards it has to end gimmicks and giveaways, and invest in the workers that make the country run.
Read more: Low pay 'endemic' in Ireland's labour market - report
