Ceisteanna—Questions. Oral Answers. - Pay Thresholds.

Joe Sherlock


18 Mr. Sherlock asked the Minister for Labour if he will outline, using as a basis the definition of low pay used in the EC Social Charter of 68 per cent of average earnings, the number of persons on low pay in this country, if he will give the number of such employees who are (a) women and (b) aged under 25; if he intends to take any new initiative against low pay; and if he will make a statement on the matter.

In attempting to assess the extent of low pay a number of different thresholds are used rather than relating it to any single measure such as the standard set by the Council of Europe.

The ESRI in their research have used a number of thresholds based on the distribution of earnings and on a poverty standard. This research using 1987 survey data estimates that about 28 per cent of employees fell below a threshold of £130 per week and 17 per cent below a £100 per week threshold. The £130 threshold represented 65 per cent of average weekly earnings in June 1987. The data confirmed that women and young workers under 25 years of age were particularly affected by low pay. About half of the workers falling beneath each of the thresholds were under 25. Two thirds of those below the lower threshold and 62 per cent of those below the higher one were women.

Low pay is associated particularly with certain sectors of industry and services where categories of workers such as women, school-leavers, part-time workers and older workers predominate. Much of the low paid work tends to be unskilled, requiring few qualifications and with little prospect of promotion and subject to high rates of labour turnover.

As a consequence, measures to comprehensively tackle the problem must therefore cover a range of areas such as education, training, social benefits and taxation as well as the question of pay. A major contribution can also be made by increasing the level of job opportunities available. Policies to address these issues are already in place and will be given further consideration in the negotiations on a new programme for social and economic development.

Since the numbers concerned are very high, over a quarter of the workforce under the threshold of £132 per week, and since the numbers of workers affected are predominantly women and young workers, can the Minister state if in the talks for a new programme for national recovery which I understand have now been completed any special measures have been agreed between the Government and the social partners to tackle the problem of low pay in this country?

The talks are far from completed. There is still a number of weeks to go. The kind of measures we are talking about, the range of areas such as education, training, social benefits, taxation, as well as pay have to be looked at. We have to look also at the number of job opportunities that are available in the economy. The general view would be that all of these areas must be co-ordinated to improve the level of take home pay of people in low paid jobs.

Would the Minister not agree that the problem of low pay is not so much due to factors such as education and training but to good old-fashion exploitation of cheap labour? Could he indicate if he has any ideas in mind, for example, the introduction of minimum pay legislation to oblige employers who are exploiting both women and young workers in the area of pay to pay them an adequate wage for the work they do?

There are a few questions there. Education and training has a lot to do with the plight of young workers and low paid workers. They are in that position because of their educational standards and cannot get out of it. It is due to the education system. FÁS and a number of other schemes have been developed in the last year or two to enable people who are unemployed or on low pay get back into education, and this helps significantly. As regards the people who are being exploited, if they are not covered by trade unions, the joint labour committees which were strengthened by legislation during the course of the years should be used. An independent chairman together with the trade union movement can look at the pay levels in each sector and fix them by registered agreements.

Deputy Sherlock asked in his question what initiative the Minister intends to take. I accept what the Minister has said about the joint labour committees but despite the best efforts of these committees, due to the shortage of inspectors their findings are in vain. For instance, one inspector covers the whole area of Munster. Bearing in mind that the type of industry affected includes hairdressers and other small industries, it is not possible for one inspector covering a whole area to react in a positive way to complaints he may receive. These people have such a heavy workload that they are unable to cope with the problems. That is the first point that should be taken into account if we are really serious about stamping out abuse.

The Deputy raised that matter earlier in the year. We have substantially increased the number of inspectors, although I am not saying the number is adequate. We could always do with more.

There is none in Munster. They are all in Dublin.

There is, but we will consider the matter. Deputy Mitchell has raised on a number of occasions in the House the whole question of the distribution of income, social welfare and taxation, and has referred to what was done last year by using the PRSI thresholds. All these matters can affect the level of take home pay. The family income supplement is another such measure. We are considering a combination of all these matters.

Regarding the talks that are taking place — this is very crucial — I would ask the Minister not to exclude other matters such as means testing which can have an effect on the value of take home pay. He should also consider basing all means tests on net pay rather than on gross pay. That would make a significant impact on the value of take home pay.

Would the Minister accept that there is a whole range of employments outside the remit of the joint labour committees where education and training is not the answer to the problem? There is a serious problem of low pay in employment, ranging from solicitors' offices to shops and so on. The Minister has not signified what measures he as Minister for Labour will take to address the problem of low pay in those areas. It is his responsibility to address this matter, which so far has not been addressed.

I think the Deputy has made his point adequately.

We have had a number of discussions on this matter recently. For example as regards shops there are indications of abuse. We have been in discussion with the unions concerned and with the Labour Court about setting up a new joint labour committee in this area. Most of the low paid workers are either covered by unions or by the present joint labour committees, with a few exceptions such as the cleaning and security areas. There are applications in to extend the committees to these areas — they already cover the city areas but not the country as a whole. In any area where I believe there is abuse and that it would be of value to extend the service of the joint labour committees, we are prepared to do so. We are extending the service at present to at least two areas and will be glad to extend it to other areas. On the other hand we are considering the take home pay of low paid workers. What has to be taken into account here is taxation in the broad sense, PRSI, the family income supplement and social welfare benefits generally. It is taking all these matters together that we will make progress.