the quid pro quo for the extra quid on legal lows

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The govt. has signalled a change to the memorandum of understanding (M.O.U.) with the troika of the EC/IMF/ECB. The minimum wage will be restored to last years poverty levels. The changes to the M.O.U. are to be revenue neutral. There is to be a quid pro quo for businesses that employ people on the minimum wage, they will get a 50% reduction in employers PRSI contributions for the poor pay of these workers, this saving stay with the bosses.

The quid pro quo for the extra quid is a smoke screen.

This reduction of 50% is not revenue neutral. The 50% reduction cost the govt. in tax revenue. Expect the troika M.O.U. details (not
revealed until mid May) to include the actual quid pro quo, more cuts on many more workers pay and conditions.

The 50% reduction / tax break for employers on the legal lowest wage in and of itself is counter productive. It puts less money in the
hands of those that will spend it in the Irish economy. But it is much worse than that.

This move by the Labour / Fine Gael govt. has created a minimum wage pay trap. It is now very unlikely that workers on minimum wage will see pay rises off the legal low for two reasons.

1. the employer will have to pay more wages.

2. the employer will have to pay more than 50% more PRSI if the worker gets more than the minimum wage.

The spinners are spinning that JLC’s REA’s and other legally binding industrial relations pay agreements are to be attacked. This means
many more employees on massively reduced pay but also hordes of workers joining the 3% of the workforce already suffering the minimum wage.

The €7.65 minimum wage is the adult qualified rate. Those on probation or training or young workers get even lower poverty rates of pay.

Workers must organise to resist these cuts. The pay trap must be avoided and the minimum wage must be increase to a rate people can
live on. Workers rights, pay & conditions are under attack at home in Ireland from this new govt. in office only 40 days, the writing is on the wall. Workers get active. The fight back has begun.

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