In developing its recommendation on the national minimum wage the Low Pay Commission assesses various economic indicators such as changes in earnings, exchange rates, employment, unemployment, productivity, international minimum wage comparisons, the need for job creation and the likely impact of the national minimum wage changes on levels of employment, the cost of living and national competitiveness.
Numerous economic commentators, both in Ireland and overseas, have highlighted that any form of Brexit has the potential to impact negatively on the Irish economy. Accordingly, although the Low Pay Commission recommended an increase in the national minimum wage of 30 cent to €10.10, it did so on the assumption of an orderly Brexit and acknowledged that the Government might wish to reserve its position in the event that there was a disorderly Brexit.
Although we are all optimistic about a deal being ratified, the possibility of a disorderly Brexit is still present; therefore, the economic circumstances that will apply in 2020 continue to be very uncertain. Nevertheless, the Government accepted the recommendation of the commission but decided to defer a decision on when its recommendation would commence until the nature of Brexit became clearer. I intend, therefore, to make provision in the Social Welfare Bill to declare the national minimum wage in 2020 in line with the commission's proposals once the situation in respect of Brexit is clarified. If a Brexit deal is agreed before the end of the year, I expect the national minimum wage to be changed on 1 January 2020 as it was in previous years.
It is important that Ireland’s statutory national minimum wage and the living wage concept not be conflated. The living wage is a voluntary societal initiative centred on the social, business and economic case to ensure that, wherever it can be afforded, employers will pay a rate of pay that provides an income sufficient to meet an individual’s basic needs such as housing, food, clothing, transport and healthcare.