Employers' groups have warned that any increase in the national minimum wage would have a serious knock-on impact on wages and competitiveness.
Addressing the Oireachtas Committee on Jobs Enterprise and Innovation, Stephen McNally of the Irish Hotels Federation said that any increase in the minimum wage at this time would jeopardise recovery in sectors that were still under pressure and risk excluding younger people from the possibility of employment.
Restaurants Association of Ireland Chief Executive Adrian Cummins said restaurant owners were in a state of disbelief that there could be any talk of raising wages.
He said many had been digging into pensions and savings to keep their businesses going, and had been paying themselves little or nothing.
He called for a reduction in the cost of employment for business, including the burden of tax and USC.
Sean Murphy of Retail Excellence Ireland said there would be serious knock-on effects putting upward pressure on pay for those on salaries above the minimum wage.
He said businesses were still under pressure from issues including upward-only rent reviews, and the abolition of the statutory redundancy rebate.
The Chief Executive of the Irish Small and Medium Enterprises body ISME, Mark Fielding, said the terms of reference of the Low Pay Commission should not be constrained by a political implication that wages will always be increased, which appeared to have been "stitched" into the new legislation.
He said decision makers should look at the net take home pay of the worker.
He said it was unfair to put all the burden on employers.
He said the Government should ensure that while the employer paid the going rate for a job, if the worker would be exempted from some taxation it would distribute the burden away from employers.
RGDATA Chief Executive Tara Buckley said many retailers were still under serious pressure following the recession, particularly from discount retailers, and had invested their savings and pensions to keep their businesses going.
She called for the scrapping of Joint Labour Committees which set legally binding wage rates higher than the national minimum wage in other areas.
IBEC Director of Industrial Relations Maeve McElwee said issues including regional disparities in competitiveness should be factored into considerations on increasing the minimum wage.
Both IBEC and ISME said there was a place for zero-hour contracts, but condemned abuses of them.
Committee told higher minimum wage would tackle poverty
The committee heard submissions his afternoon that an increase in minimum wage would narrow the gender pay gap, reduce exploitation, and tackle poverty among the working poor.
National Women’s Council of Ireland Policy Officer Alice Mary Higgins said women were at the coalface of sectors at risk of casualisation and low pay.
She noted that the gender pay gap had widened recently from 12.6% to 14.4%, but said increasing the minimum wage would improve the situation for women, who were significantly represented among low-pay sectors.
She also said that in many cases, wages were calculated on the basis of workers being able to get a state top-up to their pay from Family Income Supplement.
Gráinne O'Toole of the Migrant Rights Centre of Ireland said there was a serious entrenched problem of low pay and called for the Government to expand the scope of the Low Pay Commission to deal with issues including insecure working hours, precarious work and zero hour contracts.
Other speakers called for the cost of living for low paid workers to be factored into calculations of an appropriate minimum wage.
Sr Bernadette McMahon of the Vincentian Partnership said that the adequacy of the minimum wage should be part of the Low Pay Commission's consideration, given that workers could work for 37 1/2 hours a week yet come home with a wage that does not meet the needs of their families.
She said the fact that people could not cope on the minimum wage did not mean that they were wastrels.
The Legal Officer of the Irish Congress of Trade Unions, Esther Lynch, said it was vital to provide protection for workers who came forward to pursue their rights on wages and poor contracts.
David Foden of the Working Conditions Unit of Eurofound said that it would be a big ask to expect a single policy involving an increase in the national minimum wage to address all issues of poverty, adding that other policies would also be required.
Commission to 'take politics out of' minimum wage
Minister of State for Business and Employment Ged Nash earlier told the committee the new Low Pay Commission will take much of the politics out of setting the National Minimum Wage.
According to the Central Statistics Office, around 73,000 workers - 4.7% of the workforce - were being paid the adult minimum wage of €8.65 as of mid-2014.
Mr Nash said that one consequence of the recovery was that workers feel it should be reflected in wage packets as well, and cited recent IBEC research suggesting the median pay increase this year was likely to be 2% - with some surveys suggesting even higher increases.
The minister said work should always pay - but he said he was also conscious of the need to balance a basic statutory minimum pay rate that is fair with one that is sustainable and allows employers to create quality jobs.
He told the committee that previous research by the ESRI concluded that adjusting the minimum wage by a substantial amount on an irregular basis was more likely to have a detrimental impact on employment, and to contribute to uncertainty for employers and employees, than smaller and fairly predictable rises.
He outlined the functions of the Low Pay Commission, noting that it would be required to make recommendations that are evidence-based to ensure any suggested changes to the minimum wage would have minimum adverse impact on employment and competitiveness.
He said it was intended that the commission would adopt a consensus based approach - and would issue its first report by the middle of July.
He said that its role was in keeping with the dignity of work agenda he was pursuing, and would complement work such as the study on zero hours and low-hours contracts currently being carried out by the University of Limerick.
Mr Nash said unemployment is still too high and the Government is working to create full employment within the next three years and to make work pay.
The minister described improvements in the economy as a "paradigm shift" noting that unemployment has dropped by a third since 2012, and may dip below 9% over the next 12 months.
He said that since the low point of the crisis, the number of jobs had increased by nearly 100,000 - with 29,100 net new jobs created last year.
He said most of those were fulltime posts.
He said the Exchequer deficit at the end of February stood at €205m compared with €1.7bn a year earlier.
He also noted that debt servicing costs fell by 17.8% in the last year, tax revenue has increased by €925m, and the social protection bill has fallen by €240m as a result of falling unemployment.
