Political parties and unions have criticised a proposal by the Small Firms Association (SFA) to cut the minimum wage by €1 per hour.
The State's largest union Siptu said it was an effort "to punish the poor".
SFA director Patricia Callan, called for the cut claiming that Ireland had "lost the plot" in the context of a competitive labour market and had become a "high-cost uncompetitive economy".
When questioned on the minimum wage today, Tánaiste Mary Coughlan said there have been no discussions nor proposals on the reduction of the minimum wage during the current social partnership negotiations.
Ms Coughlan said that it would be inappropriate for her to make any comment on the minimum wage because as Minister for Enterprise, Trade and Employment she may be asked by the social partners to make a decision on it arising out of the negotiations.
Figures released by the SFA showed Ireland's minimum wage of €8.65 per hour is more than twice that of the United States, the largest economy in the world and 19 per cent higher than the UK and thirteen times that of Bulgaria.
The business lobby group claim the minimum wage is a contributing factor to the creation of youth unemployment.
However, speaking this morning, Siptu's general president Jack O'Connor disputed the figures saying Eurostat showed Irish wages "run at about tenth of the European average". Mr O'Connor added that Luxembourg, the country with the highest minimum wage in Europe, had a lower unemployment rate than Ireland.
Ms Callan also called for the introduction of a training rate she insisted should be "sub-minimum rate" to reflect the training and investment that is required to ensure an employee is capable of doing the job.
"This is a clear symptom of the fact that the national minimum wage is too high and that employers are deciding that they cannot recruit raw candidates into jobs and pay them such a high starting salary, as they will not reap the benefits in productive terms. There needs to be a broadening of the definition around sub-minimum wage training rates to include “on-the-job” training rather than formal training courses," stated Ms Callan.
Mr O’Connor dismissed the SFA's proposal. “The process in which we are engaged to tackle current economic difficulties is far too serious for people to engage in this sort of nonsensical grand standing," he said.
“Apart from the immorality of suggesting our problems can be resolved by crucifying those earning the minimum wage, it would do nothing to address the problems we face.
“These arise from spiralling, largely imported inflation and collapsing business confidence. Not only would cutting the minimum wage contribute nothing to resolving these problems but it could exacerbate them by depressing the spending power of consumers still further and sending out a message that things are so desperate that we are prepared to single out the most vulnerable members of the workforce for punitive treatment."
“The cost of living in Ireland has been driven relentlessly upward by profit taking across many sectors of the business community, including some companies that only pay the national minimum wage. Is the SFA seriously suggesting that families who spend a disproportionate share of their income on items such as food and fuel are the also the group most able to absorb cuts in their already meagre living standards?”
However, Ms Callan said: “It is not the job of business to redistribute wealth, but to create wealth which can be redistributed by Government. A minimum wage that is higher than the strongest economies in the world simply allows the Government to renege on its responsibility for social equity, which should be achieved by prudent management of expenditure and tax reform; not by making people unemployed.”
Labour Party leader Eamon Gilmore said that those on the minimum wage did not create our current economic difficulties and should not now be the first to be asked to take a cut in their living standards.
"I agree with the Small Firms Association that we need to be creative in our response to the current economic situation, but it is depressing that the most 'creative' the SFA can be is to target those on the lowest possible levels of wages. This is particularly so when inflation is again running at almost 5 per cent and when food prices increased by 8 per cent last year," Mr Gilmore said.
He said if there was a criticism of the minimum wage it was that it was not being fully enforced.
The Green Party's finances spokesman Senator Dan Boyle said reducing the wages of the least well-paid in society "is not a response to the current economic downturn".
"While recognising that small businesses are under increasing pressure in terms of their costs we need to be considering different and more imaginative measures to deal with these problems."
Mr Boyle said that in the context of overall tax reform, the aim should be to reduce employers' PRSI, thereby increasing incentives for businesses to employ people.
"This is the type of measure that should be given strong consideration in the upcoming budget."
PD leader Ciarán Cannon warned against "knee-jerk reactions". Mr Cannon said the call was "misguided and not in our true current economic interests".
"Ireland is at an economic crossroads," said Mr Cannon. "The key to our future is to compete in international markets and so preserve, and indeed expand, high value, high wage jobs."
