Vol. 395 No. 9
18 Mr. McCartan asked the Minister for Labour if, in relation to the undertaking he gave to the conference on low pay held in Dublin on 13 December 1989, he will consider research findings highlighted at the conference that the position of low paid full-time workers had not improved over the past three decades; the measures he intends to take to improve the situation of workers in this position; and if he will make a statement on the matter.
62 Mr. Spring asked the Minister for Labour if he will consider the establishment of a low pay council to investigate issues of low pay and to make appropriate recommendations; and if he will make a statement on the matter.
I propose to take Questions Nos. 18 and 62 together.
At the conference on low pay referred to by the Deputy I indicated that I would study closely the findings of the research which had been carried out in this area. This research emphasises the complexity of the low pay issue and makes it clear that measures to tackle the problem of low pay must cover a wide range of areas. These include education, training, welfare benefits, taxation and industrial relations.
In so far as the industrial relations aspects are concerned I feel that progress on low pay can best be achieved through collective bargaining operating in conjunction with joint labour committees. In this regard I would point out that the agreements on pay associated with the Programme for National Recovery are structured in favour of the lower paid. This, together with changes in the taxation system, increased welfare benefits and low levels of inflation in the past few years, will result in a substantial real increase in pay during the life of the programme.
In addition the Industrial Relations Bill which I published last December provides for improvements in the functioning of the joint labour committees.
The question of low pay has been the subject of much research and debate and as I have outlined a wide range of measures are being taken to tackle the problem. In the circumstances I do not consider that the establishment of a council to investigate the issues is necessary.
I take it the Minister would agree, since 200,000 people are on less than £120 per week, that the Programme for National Recovery does not constitute any attack on low pay, providing as it does for increases of 2.5 per cent? Such an in-built advantage for the low paid is infinitesimal. Is the Minister concerned that Ireland and Britain are the only two EC member countries which do not have some legally enforceable minimum wage and that this may mean that we will become the poor relations of Europe and, specifically, the main source of cheap labour? Is it not now appropriate to consider the question of a legal minimum wage?
Provision was made in the Programme for National Recovery for a 4 per cent increase for workers on low pay. That is not to say that that solves the problem. In recent months I, as well as Deputies opposite, have been involved in many discussions on the topic of low pay. The measures to tackle the problem of low pay must cover education, training, welfare benefits and taxation. Some moves were made in that direction in the budget. The family income supplement, which is only being availed of by 6,000 people at present, is geared towards assisting those on low pay.
We also have to identify the areas where workers in receipt of low pay are to be found. Predominantly they are to be found in unskilled and part-time work for which low educational qualifications are required, where there is a quick turnover, little or no prospect of promotion and no occupational pension schemes. None of these areas can be taken in isolation. It is for that reason that I believe if you set a minimum wage too low, which is what I think you would end up doing, it would be meaningless and, on the other hand, if we set it too high we would create grave difficulties for the industries concerned. Since Christmas a number of problems have arisen in the clothing sector where traditionally people have been in receipt of low pay, not because employers like to pay people low wages but rather because they do not make the necessary profits. We need a strong system of joint labour committees, with independent chairpersons, where the employers and worker representatives can agree on what the level of pay should be for the sector concerned. To help solve the problem the areas of taxation, education, training and welfare benefits should be dealt with on a statutory basis.
Will the Minister accept that many of the problems facing people on low pay are being created by the State because of the way it intervenes in so many ways in the lives of those on low pay or in receipt of social welfare and that this constitutes welfare apartheid? A person on low pay is assessed on their gross income, not their take home pay, when they apply for a medical card or family income supplement or when it comes to differential rent. Furthermore, they need not go to the community welfare officer for assistance in times of difficulty as they are prohibited from doing so under social welfare legislation. Would the Minister not consider, in an effort to help those on low pay, giving an instruction that all applicants for State benefits should be assessed on take-home pay, not gross pay?
The Deputy will accept that I cannot answer the last part of his question, as it is one for the Minister for Finance. Equally, the Deputy will agree that both PRSI and taxation exemption limits have been introduced by successive Governments. This year a PRSI exemption limit of £60 per week was introduced. This is low——
It is a joke.
——but it is a start.
If one is on £61 per week, one will not get it.
It is only by taking people out of the PRSI and taxation net that we will increase their take-home pay. That is the way to do it.
The Minister ought to know that that is fiction and a mirage.
I want to call Deputy Quinn who was offering earlier. Deputy O'Sullivan is offering now.
How many people are working for less than £60 per week?
The Deputy has seen the statistics.
They are paying full PRSI.
When we take into account the PRSI and tax exemptions, as well as the family income supplement, we can see that we are attacking the problem for a great number of people, several thousand.
That is a mirage.
Let us keep Question Time tidy and orderly.
Has the Minister any plans to set up joint labour committees in sectors where low paid workers are to be found?
Yes, as soon as we pass the Industrial Relations Bill. The Irish Congress of Trade Unions have put forward about five areas in addition to those we have. I support these.
Why can this not be done right away?
Because we need to give strong powers to the joint labour committees. There would be no difficulty in setting them up right away but they would not have strong enough powers——
Is the Minister in a position to identify the areas where he intends to set up joint labour committees?
There are already joint labour committees in the textile and clothing sectors. Five areas have been identified by the Irish Congress of Trade Unions, which I have agreed to. I do not want to recall them off the top of my head as I may get them wrong.
A final question from Deputy Rabbitte.
I agree with the Minister that the attack on low pay must be a multi-faceted one. However, would he not agree that it is alarming that, after three decades when there were periods of high economic growth as well as periods of recession, there is no relative improvement in the position of 200,000 full-time workers who are living today on a gross wage of £120 a week or less, and that there must be more urgency in tackling this matter which is an attack on poverty?
The reason a great number of people fell behind, and this is one of the points made in the Programme for National Recovery, is that in the negotiations during many of the previous wage rounds the strong received the increases while the weak were left out. That is only part of the answer.
It is only a very small part of it.
Taxation and welfare benefits form two major parts. If we only take the pay end we will force jobs out of existence. That is my experience and I think people would agree with that. It was announced in the budget that an interdepartmental committee was going to be set up to examine the points being made by Deputies Rabbitte and Mitchell. We should look at the extent to which we can exempt people from various taxes to try to get them out of that net. That is the second way of tackling it. The third way is joint labour committees.
I want to say——
I am sorry, Deputy Rabbitte, I am calling another question. We have dwelt sufficiently long on this question. We cannot debate it today.
I merely want to say——
This is Question Time, Deputy Rabbitte.
——if those people were paid the wage they were entitled to, it would still be a very low wage.
