From tomorrow, the minimum wage will increase by 80 cent to €13.50 per hour, directly benefitting an estimated 195,000 workers.
Many small businesses are warning however that it will be the latest in a series of cost increases and that ultimately it could be the consumer that will have to pay in the form of higher prices.
Mark O’Keeffe runs the Brown Sugar hair salons in Dublin.
“This is another increase in the minimum wage and it means it has gone up by 36% since 2020,” Mr O’Keeffe said.
“It’s becoming very challenging for us to absorb because to have deal with other new costs like sick pay, pension auto-enrolment and the fact that our suppliers have put up their prices as well,” he added.
Mr O’Keeffe is on the executive of the Irish Hairdressers Federation and said that some members have been left with no choice but to pass their increased costs on to customers.
“Salons are looking at price increases and clients may feel that’s unfair and go elsewhere, which will all be very damaging,” he said.
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Some businesses say price increases are not always an option.
CEO of the Convenience Stores & Newsagents Association of Ireland said: “It isn’t always just a simple case of putting up prices because if your competitor isn’t doing it, you’re not going to do it.
“Prices are already high and we really don’t need to see them going up even more.”
Ben Connolly is a minimum wage worker employed in the hospitality sector.
“With the cost of living so high, an increase is definitely needed,” Mr Connolly said.
“Generally, for waiters, waitresses and bar tenders, they tend to be younger and on the minimum wage so definitely any increase will really help,” he added.
Interim Assistant General Secretary of the Mandate trade union Jim Fuery said the minimum wage increase will provide a level of decency for low paid workers.
“Sadly for us, many employers look at this as the ceiling whereas we look at it as the floor,” Mr Fuery said.
“For these workers, every penny that they get, including these increases, will go back into the economy and they’ll be spent in local business, local cafes and even in the stores in which they work,” he added.
2025 will be the 25th anniversary of the introduction of the minimum wage.
“It was introduced in April 2000 and back then we heard what we are hearing this year – that a minimum wage will bankrupt the economy and cost jobs and businesses,” said Dr Laura Bambrick, Social Policy Officer, Irish Congress of Trade Unions.
“It didn’t happen then and it won’t happen now,” Dr Bambrick said.
The Department of Enterprise said that the increase in the minimum wage should be considered as part of the overall package announced on budget day and in tandem with a range of measures introduced to support businesses.
But at the Brown Sugar hair salon, Mr O’Keeffe is warning of closures in his industry in 2025 unless more is done to address business costs.
“I know people that are really struggling to make a profit, some haven’t made a profit this year, and probably won’t next year,” Mr O’Keeffe said.
“We are looking at lot of salons having to close down.”
