The Poor Can’t Pay has warned that the Government’s plan to cut the National Minimum Wage by €1 per hour could lead to welfare rates being slashed by up to €40 a week, an analysis that has been echoed by The Poor Can't Pay member, Social Justice Ireland. Thh Poor Can't Pay spokesperson, Mike Allen of Focus Ireland, said: "It is clear from first glance that the 4 Year Plan puts most of the cost of paying for the economic crisis on people already struggling on low pay and welfare. The plan is yet another example of the current Government’s flawed logic as a more detailed look at it shows that it is totally inconsistent in its attempts to develop ‘the incentive to work’ for people on welfare.” The Poor Can’t Pay group highlighted that the Four Year plan also insists that there must be “an incentive to work” for people on welfare and this means there must be a clear gap between what a person can claim on welfare and what they would earn if they managed to secure a low paid job. Mike Allen said: “The cut that the Government proposes to make next year in the minimum wage amounts to a €40 a week reduction for a full-time worker. The take home pay of these workers will also be further slashed by the Government’s proposals to subject such low income earners to taxation.” Mike Allen said: “Working by the Governments’ logic to maintain the current gap between those on the minimum wage and those who are on Job Seekers Allowance will require a significant cut in welfare – amounting to a 20% cut in the basic payment. If the Government persists in its narrow minded view that poverty wages will create jobs and that welfare rates must be below even those levels, this is where their logic will lead them.” The Poor Can't Pay Coalition said it is seeking Government assurances that such reductions in unemployment payments will not take place. The problem for the Government is that if they give such assurances they are saying that they are ignoring their own policy on ‘incentive to work.’ All this confirms the view that the plan to cut the minimum wage is not a thought through policy but a panic measure so that they can appear strong to the international markets. A technical explanation of how the cut in Minimum Wage would impact on the replacement ratios of those on social welfare can be found here. The coalition group dismissed Minister Gormley's explanation that the cut in Minimum Wage cut was forced by the IMF saying that Irish politicians should be judged by what they actually vote for. The Poor Can't Pay also called on all opposition parties to confirm that they will reverse any decision to cut the minimum wage if they are part of the next Government. The Poor Can’t Pay welcomed Fine Gael’s announcement that if it is in Government it will seek to renegotiate the cut in the National Minimum Wage. The Poor Can't Pay is a civil society coalition that believes those earning the minimum wage or living on social welfare should not be forced to pay the cost of our present economic crisis. |