Richard Bruton
Question:13 Mr. R. Bruton asked the Minister for Enterprise and Employment the plans, if any, he has to introduce a minimum wage.
Ceisteanna — Questions. Oral Answers. - Statutory Minimum Wage.
Proinsias De Rossa
Question:34 Proinsias De Rossa asked the Minister for Enterprise and Employment, in view of the commitment given in the Programme for Economic and Social Progress, the consideration that was given to the issues involved in a statutory minimum wage; if a report was prepared for consideration by the Employer Labour Conference; if it is intended to publish any such report; if the Government now has any plans for a statutory minimum wage; and if he will make a statement on the matter.
I propose to take Questions Nos. 13 and 34 together.
The Programme for Economic and Social Progress provided that the Employer-Labour Conference would consider all the issues involved, including the operation of the joint labour committee system, in regard to a statutory minimum wage and prepare a report for the constituent bodies of the conference. I have no role in relation to the conduct of the business of the Employer-Labour Conference; this is a matter for its constituent bodies. However, I understand that the conference has not reported on this matter. For my part, I have no proposals to put to the Government concerning the introduction of a statutory minimum wage.
I should point out, of course, that the position of low paid workers has been addressed in recent years in a number of ways. The joint labour committee system has been extended significantly and it now applies to some 100,000 workers. In addition, the position of low paid workers will be further improved through a number of specific measures brought forward in the budget. In particular, the abolition of the 1 per cent income levy, the exemption from both the health and the employment and training levies for those employees in receipt of £173 per week or less, the improvements in personal tax allowances and the widening of the standard rate tax band, will significantly improve the position of those on low incomes.
Will the Minister clarify the Government's position on the issue of a minimum wage? He indicated that he does not intend to put any such proposal to Government but has the Government in the Social Chapter made a commitment to the introduction of a minimum wage? Does this announcement by the Minister represent a change in position or what exactly is the Government's stand on the issue of a minimum wage?
The question of a minimum wage is fraught with many complexities and difficulties as the Deputy, who is a professional economist, will readily agree. For that reason it was agreed by both the social partners who would be directly affected by this, the trade unions and the employers, that the matter should be considered by the Employer-Labour Conference. It has not, as yet, reported back to me in this matter or, indeed, issued a report. I would have to have regard, in many respects, to what it may or may not recommend before I would bring proposals to Government since the matter was brought up in the context of the Programme for Economic and Social Progress. I would be prefer to wait and hear what the conference has to say on this issue before I bring forward proposals.
I can understand the Minister wanting to consult with employers and unions but I wish to establish the Government's position. It is all very well to consult with the social partners but has the Government a position on this? What position does it adopt at EC Council of Ministers' level when such proposals surface?
I am unsure if there is a formal Government position; I am not aware of one if there is. However, I will obtain that information for the Deputy. On the question of the introduction of a minimum wage, I would not bring forward proposals without having full consultations with the trade unions and the employers. I am, therefore, awaiting the views of the Employer-Labour Conference on this issue.
Will the Minister acknowledge that according to the latest EC data, the Republic must endure the ignominy of having the largest relative low pay problem in the Community, compared even to countries like Portugal and Greece? While the concessions made to the low paid in the budget are welcome it would be wrong to exaggerate the significance of them and say they lift people on low pay out of the poverty trap. Would the Minister agree that if, at the negotiation of a new Programme for Economic and Social Progress, the employers were opposed, the trade unions were in favour and set up a committee to examine the issue, the Government has a function and a role to play? I wish to press the Minister further in regard to the Government's position on a statutory minimum wage, such as that which obtains in many of the more successful economies in Europe.
First, we have minimum wages to the extent that the joint labour committees, with which Deputy Rabbitte would be familiar, cover just below 10 per cent of the workforce at present. I would be more inclined to look at certain sectors of the economy and consider how we could ensure a minimum wage in them, provided that such an intervention does not minimise the prospects of employment for people seeking work and does not distort the competitive basis of the Irish economy relative to other markets with which our employers and workers have to compete. I am in favour of a minimum wage if it can be seen to work economically and efficiently. I am totally opposed to an artificial minimum wage which is set as a national statutory minimum and is circumvented illegally, as has been the experience in many continental countries. For example, in Portugal the minimum wage has been undermined and breached on many occasions. If we are to have minimum wage levels they should be transparent, enforceable and focused on areas where the normal process of effective free collective bargaining can function.
The Minister's argument is reminiscent of the argument of the Tories in Britain in regard to the competitive situation vis-à-vis other economies.
They never heard of the Social Chapter.
Is it not the case that much of the focus of this low pay problem is on the domestic sector of this economy where we are not in competition with anyone? If one considers the rag trade, for example, which is a relatively low paid sector, it is unlikely in the main to be as low paid as some of the domestic sectors. Is it not the case that by and large the joint labour committee mechanism is not very effective? It is built on voluntary agreement and; if the voluntary agreement of employers is not forthcoming nothing can be done about it. It applies to a very small proportion of workers in the economy.
I could not accept what the Deputy said. As I indicated in my reply, the joint labour committee system covers 100,000 workers. I would be open to suggestions to extend that in certain areas where a case could be made that the normal process of free collective bargaining is not applied. I do not accept the Deputy's contention that in some areas of domestic services these are not internationally traded. The cost of such services has to be borne by the companies who are trading and all wages must be paid out of the wealth that is created by the enterprise. The experience over the past 18 months, particularly during the currency crisis, demonstrated, in a manner that none of us previously realised, the vulnerable position of large numbers of Irish indigenous industries having regard to the competition from, in particular, the United Kingdom which remains the dominant market for almost all such companies.
I am not about to introduce a minimum wage system which will have the effect, before a short period, of reducing the number at work. This Government's priority is very clear; we want first to ensure that those at work obtain a fair wage. We want to focus income tax relief on the low paid and we did that successfully in what was an excellent budget. We want to ensure that employers are encouraged to take on more employees and we took a step towards that by reducing the PRSI contribution for employees earning £9,000 or less, which is a relatively small sum of money. To bring in a minimum wage on a national statutory basis, which could be construed by some people, in the absence of scientific data, as going against the thrust of that co-ordinated Government strategy, would not be in the interests of those seeking employment. It could, in some cases, endanger the employment security of those at work. In principle, I would like to see people working, earning more money and paying less tax on that money. I would like to see those people not at work getting into work. I do not propose to introduce legislation of the rigid nature this question refers to. The joint labour committees are an effective mechanism for introducing a legal floor for wages in those areas where the free collective bargaining process has not been functioning in the past. I will be open to suggestions from Members of this House, or from members of the public, to extend the remit of the JLCs into areas where a case can be made, but not at the expense of employment generally.
A Leas-Cheann Comhairle——
I am moving on now to Question No. 14. I had indicated that that was the last supplementary.
It is Deputy Richard Bruton's question.
I have already called Question No. 14. I do not propose to call it a third time.
It is the convention of the House to permit a final supplementary.
The Deputy has had two opportunities to address this question, as has the Deputy who tabled the other question. It is the prerogative of the Chair to call the number of supplementary questions. I am moving on to Question No. 14 in the name of Deputy Clohessy.
Does that mean that if Congress and the employers agree on a national minimum wage the Minister will ignore it?
Please, Deputy.
The Minister has said very clearly that he is opposed to a national minimum wage. If Congress and the employers agree, will the Minister ignore it?
There is now total confusion as to where the Government stands.
A Leas-Cheann Comhairle, I will follow your ruling and not answer any more supplementaries.
The Minister is delighted.