Seanad Éireann debate -
Wednesday, 25 Mar 1998

Vol. 154 No. 16

Hourly Minimum Wage: Motion.

Mr. Costello

I move:

That Seanad Éireann notes the commitment in the Government's "Action Programme for the Millennium" to introduce a national hourly minimum wage following early consultation with the social partners; welcomes the campaigns initiated by the Irish Congress of Trade Unions, the Dublin Council of Trade Unions, the Irish National Organisation of the Unemployed and the Scheme Workers Alliance to secure a minimum wage; deplores the delay by the National Wage Commission in producing a report; and calls on the Government to honour its commitment to the Social Partners by agreeing a national minimum hourly rate without delay.

I am disappointed that the Government has tabled an amendment to the motion deleting everything after "That" and inserting a new wording. Apart from its conclusion, I have no problem with most of the amendment which begins:

Seanad Éireann supports the work of the National Minimum Wage Commission to establish the best way to implement the Government's commitment on the introduction of a minimum wage in its Action Programme for the Millennium; recognises the sensitivity of the issues involved in enhancing the welfare of persons in employment while at the same time protecting competitiveness and jobs;

However, I cannot agree with the final part of the amendment which states: "and welcomes the Commission's intention to report to the Tánaiste by the end of March, 1998.". Perhaps Senator Cassidy and his 34 colleagues on the Government side are capable of looking into a crystal ball, but there is not much time for the commission to report by the end of March. Initially the commission was to report by the end of December. There are only six days left in March and unless the commission works flat out over the weekend I do not think the report will be produced. This was further underlined by the Taoiseach's reply to a question on the Order of Business today in the Dáil when he failed to give a date for publication of the report.

I welcome the Minister of State at the Department of Health and Children, Deputy Moffatt, to the House but deplore the fact that the Tánaiste, the senior Minister with responsibility for this issue, has not come to the House to show her support for this important issue and for this debate. I am sure she has business she considers more pressing but this is an extremely important matter.

Sharing the benefits of economic growth more equally among all members of society underlines the spirit of Partnership 2000. We can embark upon sharing our growth in a number of ways, chiefly through the introduction of a statutory minimum wage. For this reason I welcome the commitment in the Government's "An Action Programme for the Millennium" to introduce a national hourly minimum wage, initially through consultation with the social partners. I deplore the delay in delivering on this commitment subsequent to which the question of implementation will arise.

The economy is going through a boom and there has been a consequent spin off in terms of job creation. There are indications in all high streets that employers are looking for staff. Almost every second shop window is displaying signs indicating staff vacancies. However, our economic booms fails to correlate with the type of wages being offered, particularly in the retail, sporting and service sectors where the majority of jobs are currently being created. Recent surveys show that some employers are creaming the economic boom and succeeding in making high profit returns by ensuring their staff are paid a pittance. For example, a sports shop in St. Stephen's Green shopping centre is selling trainers for more than £100 per pair but is paying staff a miserable £1.30 per hour according to a survey published by The Sunday Business Post on 1 February 1998. A sandwich shop on Grafton Street is looking for “bright and bubbly staff”, but is only prepared to pay them £2.75 per hour. A host of other retail outlets and restaurants are paying wages of between £2 and £3 per hour. Many of these low paid jobs are advertised in FÁS offices. If time permits, I will read a list of low paid jobs prepared by the Irish small and medium business sector, USI and The Sunday Business Post.

Waiting staff, sales assistants, cleaning staff, warehouse staff, porters and security staff among others are being exploited. Employers are crying out about worker shortages and are claiming people do not want to work because they are better off on the dole. Given some of the wages I have cited, I must concur with these employers and say that some people are better off on the dole. Working a 40 hour week in the sports shop I referred to in St. Stephen's Green shopping centre attracts a take home pay of just over £52 per week. I am not surprised unemployed people are not prepared to take up many of these jobs. Would many of those offering these jobs be prepared to work for such wages or allow their sons or daughters work for such wages?

The unemployed need to move into employment offering wages which will make a difference to their standard of living if they are to move out of the poverty trap which they and their families have been consigned to for the past two decades. They do not want to move into employment which will push them into more acute poverty than that experienced while surviving on inadequate social welfare payments. Implementation of a minimum wage can restore belief in the benefits of decent employment among the many thousands of long-term unemployed who have remained on the margins of society for so long.

Employer groups have argued against the introduction of a minimum wage on the grounds that it will prevent us from competing with other low wage economies in the Far East. Indeed, the Tánaiste has recommended the labour market in Hong Kong where the happy workers go off to work in dismal conditions for dismal pay. The opposite is what we need. There is no evidence to show that a minimum wage would prevent us from competing with low wage economies in the Far East. The European Commission requested Jacques Delors to prepare a White Paper on growth, competitiveness and employment and he did so in 1993. This document, which is one of the documents which form the basis of the Amsterdam Treaty, points out that sustaining low wages does not increase or maintain competition:

Compared to the newly industrialised countries, particularly those just entering that path such as China, the differential in labour costs is too great for any significant employment gains to be made in Europe from wage reductions in manufacturing industry. Only higher productivity and superior products will enable Europe to maintain a competitive advantage.

We have recognized that that is the case and that is the context in which the IDA goes abroad looking for investment.

I wish to answer claims that a minimum wage will increase the national wage bill by an exorbitant sum. In the United Kingdom a minimum wage set at 50 per cent of the average industrial wage would increase the national wage bill by only 1 per cent. That is not a great amount and would be a small price to pay for the abolition of exploitation in the labour market.

When the Government announced its intention to pursue the implementation of a minimum wage as a priority it consulted the social partners, and interest groups were invited to make submissions to a commission. This level of consultation is commendable because of the complexity of the argument and the issues involved in identifying exactly where a minimum wage should be pitched. Since December, however, the social partners and interest groups who put much time, effort and money into campaigns for a minimum wage have been waiting on tenterhooks for the publication of the report from the National Minimum Wage Commission. It was promised in December, in February and now in March. It is difficult to see it being published in the foreseeable future. I hope the Minister has information for the House in that regard.

I commend the efforts of the Irish Congress of Trades Unions, the Dublin Council of Trades Unions, the Irish National Organisation for the Unemployed and the Scheme Workers Alliance for the work they have done in campaigning and highlighting the need for a national minimum wage. As the boom continues and the monthly unemployment figures fall, we need to ensure that people moving into jobs are moving out of poverty. We must also ensure that employers are not exploiting workers in the name of high profits. The implementation of a minimum wage will play a vital role in preventing such exploitation.

Mr. Gallagher

I am glad the House has the opportunity to debate this matter which is so important to so many people. I am happy to see that in the economic, political and social commentary during recent months, people have been taking stock of the economic boom and its effects on people's lives. We share the good news about jobs. I recently had a complaint from a community group that they could not find participants for a FÁS scheme because no one in the area was unemployed. I remarked that this was a very good complaint. However it is good, while the economy is successful, to take stock and to identify the sectors of our population which are not doing so well. The implementation of a national minimum wage is the single most important thing the Government could do for those people who wish to take up jobs in the lower paid sector of the economy.

There should be no great ideological division on this subject. As a student 15 years ago I worked for a number of months in New Jersey, USA. Minimum wage legislation was implemented there and if an economy which has liberal labour laws and a capitalist ethos can implement a minimum wage surely we, who have a historical concern for social inclusion, can do so. I hope the efforts which have been made in setting up the National Minimum Wage Commission can be brought to a conclusion. I will be pleasantly surprised if the report appears before next Tuesday but I hope it will appear very soon.

A statutory minimum wage is not a panacea for all ills. It must be part of an integrated package to ensure that people who are in work are rewarded and that people are encouraged to take up the jobs which are being created as a result of our economic boom. The purpose of a minimum wage is to stamp out exploitation in the labour market and there is no doubt that this exists. This is particularly true for the very poor, the unskilled and those who are trying to re-enter the labour market after a long period of exclusion for one reason or another. The examples given by Senator Costello could be repeated in any of our towns or cities. It is important to note that low pay is not something which occurs here and there. It is endemic in our economy. Analysis of tax and social insurance returns shows the great number of workers earning salaries of £7,000 to £10,000 per year. These figures need to be publicised so that we will realise that the implementation of a minimum wage would help hundreds of thousands of people and many families.

I reject claims made by employers' groups such as ISME that social welfare payments are too high and prevent unemployed people from taking up jobs. Employers must face the reality that the wages they are willing to offer are unacceptable as are payments of less than £1.50 per hour, as cited by Senator Costello.

A minimum wage will not make us vulnerable to competition from low wage economies. Our economy is sufficiently advanced and strong to pursue quality improvement and the production of world class goods. The sectors of our economy which are producing goods for exports do not need minimum wage legislation. It is needed in our domestically owned industries, such as some elements of the retail trade, the hotel and catering trade, fast food and other areas of the service industry.

In implementing a minimum wage we must be conscious of other factors affecting the amount of money which people take home in their wage packets. Tax reform cannot be separated from the implementation of a minimum wage. While the Government has expressed its intention to implement a statutory minimum wage its approach to tax reform takes from the benefits of decent pay. In the December budget, which was trumpeted as heralding major tax cuts across the board, there was a failure to increase the incentive to take up lower paid employment in the service and small business sectors. Instead, the Government poured its money into giving more to those who already have enough. A person on the proposed £5 per hour minimum wage, as sought by ICTU, would benefit by a mere £1.50 as a result of the budget. This compared with a weekly income boost of £17.10 for a person on an annual salary of £50,000.

If the National Minimum Wage Commission reports soon and the Government agrees to implement its recommendations, the matter of enforcement will arise. There is no point introducing a minimum wage which exists on paper if those who suffer from low pay do not have a locally accessible, low cost means of enforcing their rights to a minimum wage when and if it is put in place. That is a barrier to many people availing of the employment rights that already exist. I hope the commission will recommend addressing enforcement and that the Department will be able to recruit many more members of the industrial inspectorate not just for this purpose but for the implementation of all aspects of labour law. The decline of that inspectorate under different Governments has been scandalous. I hope the Government will implement a minimum wage and will also make it clear to people that if their rights in this area are being infringed there will be an easy way for them to avail of enforcement.

I reiterate my hope that this report will be published soon.

Ms Keogh

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann supports the work of the National Minimum Wage Commission to establish the best way to implement the Government's commitment on the introduction of a minimum wage in its Action Plan for the Millennium; recognises the sensitivity of the issues involved in enhancing the welfare of persons in employment while at the same time protecting competitiveness and jobs; and welcomes the Commission's intention to report to the Tánaiste by the end of March, 1998.”.

It is clear that the Government moved very rapidly to fulfil its commitment to this matter. Early last July the Tánaiste set up a commission to report to the Government on the best way to implement the commitment in the Programme for Government to a national minimum hourly wage. It is ironic that the Labour Party has tabled this motion when one considers that that party has been in Government for 15 of the last 20 years. They obviously forgot to include this on their agenda during that time.

Mr. Costello

We will be back shortly.

Ms Keogh

We should pay tribute to the work of the commission members. All Senators will agree that every member, especially the chair, Ms Owens, brings invaluable experience to bear on the work of the commission. The terms of reference of the commission encompass very complex economic and social issues: how the work of low paid employees in our economy can be fairly remunerated and how the exploitation of workers, particularly women and the young, can be prevented. That is why the Government decided it was necessary to have the report of the National Minimum Wage Commission before deciding on the best way to implement its commitments to a minimum wage in the Programme for Government.

The commission has been very active. In addition to basic research, it has received a very large body of written evidence and has conducted oral hearings with all concerned parties. Senator Costello referred to the delay in the commission's report but it provided the Tánaiste with a progress report in December which stated its need for more time to complete the report. They have consulted the social partners and I understand the report is finalised and should be submitted to the Tánaiste in the next few days. Once the final report is received, the Tánaiste will bring proposals to Government. It is an open secret that the commission's members, who are busy people with many responsibilities, have worked very hard on this report. They deserve our commendations and not our carping for that work.

The commitment is timely. Most modern economies have arrangements for fixing minimum wages, some of which are very comprehensive, and we should look at upgrading our system. It should be noted that the Government's approach is consistent with the thrust of Partnership 2000 which makes social inclusion an integral part of a strategy that embraces economic and employment growth and partnership.

We should not look at the national minimum wage in isolation. Research on the characteristics of the low paid suggests that a comprehensive range of policies is needed to improve their earning capacity and to get them into stable employment. That includes not just a minimum wage but education and training. I know there are different opinions about this matter. Much has been said about the downside of a minimum wage, but there are benefits.

A national minimum wage can prevent competition between firms on the basis of undercutting prices, encourage people back into the labour market and improve employee morale, commitment and productivity. In examining the question of a minimum wage, there are many important issues on which the commission's advice is needed, such as the institutional features of any new system of wage fixing and how those will fit in with the present machinery. We must look at the rate at which to pitch the initial minimum wage. One argument holds that the higher the level, the greater the risk of negative effects on employment. What mechanism would operate the national minimum wage? Would it be through national understandings or the Labour Court? There are other technical considerations, such as tips, commissions and benefit in kind, which will all have to be thrashed out. Varying the minimum wage according to experience, age, training or apprenticeship status has also been discussed.

I know there are many variations in existing rates, but these can be exploited by unscrupulous employers and this must be avoided. Wage differentials can lead to inflation and we must look at how these can be controlled. Many people are employed in small businesses, and we must assess the impact a minimum wage would have on these businesses.

If we arrive at consensus on the minimum wage, how will we enforce it? An army of inspectors and administrative staff is the last thing we need. There are wider issues, such as the implications for Partnership 2000 and future agreements. We will have to ensure that regulation of the labour market does not increase the size of the black economy. This matter has implications for one of our greatest trading partners, the United Kingdom.

When we look at these questions we understand the difficulties the commission has encountered. There is more involved here than issuing an edict, which is a convenient device of opposition. The Tánaiste has properly and rapidly convened the right people, identified the right questions and given the right time to advise on the best way to implement the commitment in the Programme for Government.

The slow movement of business through the House means time has caught up with the Labour Party on this debate, but it is no harm to raise such matters. However, it is ironic that we debate this Labour Party motion given the time that party had to raise this issue in Government.

Mr. Quinn

I thank the Labour Party for raising this matter. I do not speak as a representative of employers but as an employer. At the risk of being immodest, I started with eight people in a shop 38 years ago and we now employ a considerable number of people with a wage bill of £500,000. I speak as somebody who has experience of the responsibility of employing people and who wishes to maintain that employment and create more jobs in the future. I understand the strength of feeling expressed, especially when one considers some of the wages being paid. However, we must find a solution without creating more harm for our economy. The job of the National Minimum Wage Commission is to set up a mechanism to establish a minimum wage rate rather than establish the rate itself. When the commission gives its report to the Tánaiste next week — and I hope it will be published shortly after that — the task of this nation will be to ensure we find a solution to the challenges Senators Costello and Gallagher referred to when they spoke about exploitative wages.

Our objective is to eradicate poverty from society. What is the best method for achieving that? The best way is to create more employment so employers can compete for employees through wage rates and conditions. It is essential to aim for a minimum wage rate which will remove exploitation from the labour market. We must try to get the best of both worlds. There is a danger that a minimum wage rate which is too high may reduce employment and price certain jobs out of the market. Both Labour Senators said this is an excuse used by employers. However, there are a large number of jobs which can be done by machines rather than people. I would hate if any steps taken by us would discourage people from taking their first job, which we must encourage them to do.

We must try to avoid a broad brush solution to this problem. There are minimum wage rates in other countries. Senator Gallagher referred to the minimum wage rate in the United States, which has a liberal economy from the point of view of employment. There is a considerable difference between Ireland and some other countries. For example, trade union membership in Ireland is 49.7 per cent. The figure in France, which has a minimum wage rate, is 9.8 per cent and in the United States it is 15.6 per cent. Ireland is different and the solutions used in other countries do not necessarily apply here. Ireland has a well developed system of joint labour committees and there are over 75,000 people involved. Partnership 2000 has provided for a review of the JLC system. This system makes Ireland different from other countries.

Increased employment must be our priority. Getting a job, even at a comparatively low rate, enables job seekers to take their first step up the ladder so they can improve themselves, increase their standards and eventually progress to better jobs. We are in danger of establishing a non-work culture among a number of people who are second-generation unemployed and who may be developing a habit of not working. If they get onto the first rung of the ladder they can progress upwards. There is a danger we will price jobs out of the market and people will be tempted not to take their first job.

For example, a low-paid job earning £150 per week, progressing to £200 per week is not one with a marvellous future. If a minimum wage rate is set at £200 per week, those already earning that will say they always had a differential above those who started at £150 and they want it maintained. This will damage jobs and inflation and create huge difficulties for employers and trade unions. Those who were satisfied will be dissatisfied because others have caught up with them.

The social welfare wedge was discussed earlier. I do not want to cut back on social welfare but we must find a solution to the problem of those who are tempted not to go to work because it does not pay them. For example, a married man with four children will turn down a £220 per week job for which he will receive £190 net because he receives £170 without working. We must find a way for him to receive more money in his hand from his job. The incentive to go to work should be £50 or £60 rather than £20, because of all the other disincentives.

Senator Costello was right when he said many employers are having difficulty filling job vacancies. We should be concerned about the culture of not working. For example, my company was seeking to employ people in apprenticeships, after which, at the end of four years, they would earn £350 per week. However, they would have to work towards that for four years. We had difficulty getting people to take up the apprenticeships because it would cost them money for that four years. However, if they decide to go to university or college they will have to study for four years without any payment. This kind of culture concerns me. We must encourage people to take that first job and continue working at a comparatively lower rate until a rate is established to enable them to achieve more in the future.

Mr. Walsh

I am sympathetic to the motion tabled by the Labour Party to the extent that exploitation of workers is totally unacceptable. This House and the Legislature should ensure it is not allowed to happen. However, there is not a great deal of evidence of exploitation. Certain instances were cited but one would need to know about the business, its profitability and the employees who may be unhappy taking up those positions. There are arguments for and against — otherwise we would not be having a debate.

I join with Senator Keogh in raising an eyebrow at the new found enthusiasm of the Labour Party on this issue. People's memories are longer than that and they will remember that the Labour Party were in Government for five years until the middle of last year. The Minister's initiative in establishing this commission is a positive step in the right direction. It is also the correct way to address the issue. If we introduce a minimum wage or intervene in any way without fully researching the pros and cons and the difficulties which will arise as a consequence, we are not doing anybody any favours, least of all those we are seeking to assist. It will be interesting to see the findings of the commission. While I know the Government is committed to implementing them, one must ask whether it is necessary to do so.

Senator Quinn alluded to the level of unionised labour in this country, which is exceptionally high. He gave a figure of 9.8 per cent for France, but in the United States 15.6 per cent of the workforce is organised in unions. At those levels one can appreciate more fully the need for an interventionist policy. For many years we have aspired to base our economy on the German model and to some extent we have been successful in doing so. Some 32.9 per cent of Germany's workforce is unionised.

If we compare the labour and financial markets generally, the need for intervention is always questionable. An analogy might be to examine the role of our two most recent Ministers for Finance. The previous Minister, Deputy Quinn, took a high profile approach to our currency and, because of a loose statement on one occasion, he caused a severe run on the pound. On the other hand, the current Minister, Deputy McCreevy, was criticised for not making any comment. However, there may well be a lesson in looking at the success with which the currency has been handled through that less interventionist approach.

Competitiveness, flexibility and productivity in the workforce is fundamental to a vibrant, successful and competitive economy. If we interfere to an extent where any of those areas are damaged, we will achieve something that is counterproductive to the aims and objectives we are setting for ourselves.

When I began working I was paid about 15p or three shillings an hour in those good old days. I have seen many instances of young people, who work initially for low wages, developing an appreciation of the value of money which often stands them in good stead in later life. I have also seen the opposite happen, even in my local town where flourishing industries paid high wages at a time of great growth to people who were just starting their working lives. They received hundreds of pounds when others got less than £100 a week, but it inflicted a mentality and ethos on them which has left many unemployed for a long number of years.

Human nature being what it is, and none of us is any different, when money is earned too easily it sends out all the wrong signals. We should try to preserve that appreciation for the value of money in any attempt to introduce a minimum wage. I am not opposed to the introduction of a minimum wage but it must be done in a way that will not have a downside effect on business or employment.

We must also take account of certain sectors of the economy. It has always struck me, particularly when travelling in the United States, that while very low wages are paid in the hotel and restaurant businesses there, earnings are significantly augmented by tips. That system gives rise to a better quality of service because the people providing the service have a vested in its quality which is directly related to their remuneration and their financial wellbeing. If one tries to introduce something that takes away that incentive, quality and competitiveness can be adversely affected.

Certain people in low paid jobs do not want wage increases because it would disqualify them from receiving social welfare benefits. They are working for that level of income by choice. We do not have the right or duty to tell people in such a position, which suits them, that we want to change their circumstances.

The approach being taken by the Minister is the correct one. When we receive the commission's report we can have a more informed debate and analysis of the matter.

Mr. Coghlan

I find myself respectful of the bona fides of both the Labour Party proposers and those supporting the Government's amendment. Looking at the motion and the amendment, one could argue that we are really splitting hairs. We all recognise the need for, and the social desirability of, a minimum wage. Appropriately, it was given as a commitment in the Government's action programme. We also agree with our Labour colleagues that we would like to see it introduced without delay.

I was very taken by the work of the Conference of Religious of Ireland. While that body's argument in favour of a basic income is slightly different from that supporting a minimum wage, there are similarities. The strong arguments the CRI has put forward in promoting a basic income are equally applicable to the need for a minimum wage and for that reason we support the idea.

A national hourly minimum wage will probably emerge eventually, and we hope that will occur soon. Senator Quinn raised some reasonable doubts about the matter and one cannot help wondering if what we do will be the correct Irish solution to an Irish problem. One would be concerned about damaging jobs and inflation. I find myself in a dilemma in that I do not see much difference between the motion and the amendment and I say that with great respect to both sides.

Mr. Costello

Does the Senator think the Government side should have supported this motion?

Mr. Coghlan

Of course. That is what I would prefer also.

Mr. Costello

They are very close to it.

Mr. Coghlan

Indeed.

Mr. Walsh

We do not want to become negative like the Labour Party.

Acting Chairman (Dr. Henry)

Senator Coghlan without interruption.

Mr. Coghlan

We are assured that the commission, which has heard from all the various interest groups, will report any day. I highly commend the efforts of all the interest groups and the work of the commission itself. We would like its recommendations to be implemented immediately. I accept that many workers feel they are better off on the dole. Equally, there are many people who prefer to be on the dole and, obviously, they are there by choice. On balance though, I believe the implementation of a minimum wage will remove any exploitation.

We wish to see this report published immediately, followed by concrete proposals for the implementation of its recommendations.

Mr. Farrell

It is important that workers get paid well but it is something about which I would be very careful. The commission is the right way to do this because it can look at the issue from all angles. We should await the report which will be published in a few days.

Senator Costello spoke about people working for £1.20 per hour; however, that may not be the whole story. They may be on £1.20 per hour but they may be on good sales commission. One must look at the whole package. It can be unfair to label a firm as one which pays low wages. That may be the truth but it is only part of the story. Many firms pay commission as well as a wage. Maybe that is not so in this case, but it is an angle we should look at if we are to be fair to employers. Some Senators seem to continually lambast employers as a group which we should get rid of because they are out to exploit labour at all costs.

I could get not get a good job after my accident. The only employment I could get was a badly paid job, starting at 5 a.m., delivering milk in Sligo town. I did that for a number of years and, as a result, got a very good job because I was seen in the marketplace. Had I not been in the poorly paid job, and if I had stayed at home feeling sorry for myself and willing to be on the dole, I would probably still be on the dole. There are advantages in getting out into the workplace.

I am afraid that a minimum wage might militate against the poor. If there is to be a minimum wage, the employers will pick the brightest and the best. Many people who started their working life in my employment on a low wage are in big business today; many of them have started their own businesses. Many of them could not get another job because they had dropped out of school. They were not the brightest and best and they did not have much academic knowledge, but there were firms which were sympathetic to that type of fellow. They knew he came from a big family, for instance, and they gave him a chance. When the person got into the workplace he or she "skinned out", as they say in my part of the country. They became good workers, tradesmen and craftsmen. What does one pay for experience?

I often wonder what will be the result of some of the present laws, such as that which states that if one keeps someone in employment for a year one must let them go or make them permanent. That has led to subcontracting in a big way. Nobody is employing anybody now; they are subcontracting. One must adopt a balanced approach and decide what is best. Is it possible to go over the top and make the poor poorer? I would appeal to the commission and others to think about this. I always speak from my experience because I came up the hard way.

Many good lads went away to England in the 1940s and 1950s. If they got a job initially, they turned out well but if they did not and they got hooked on the dole, that is what they lived on and they never really got any farther. We should never encourage young people leaving school to go on the dole. We should get them waged jobs. We should create a work ethic from the very beginning although that may mean the wages will not be as high as we would like.

Many employers who give these young people a chance work every hour God sends. I ran a little filling station and garage from 8 a.m. until midnight and I was often under a car fixing brakes when everyone else had gone home. That had to be done because somebody wanted their car in the morning. In those days one could throw the keys under the back wheel and leave the car on the street, and the owner would pick it up in the morning. One could not do that now.

From my experience, instead of talking about a minimum wage, I believe we should be talking more about a reasonable wage, and how to get young people into work and out of the dole mentality. I hear people say they are better off on the dole than working but that is not true. The dole is soul destroying. When I was a rate collector people did not want to be seen because they only had a few bob from the dole and they did not have the money to meet their debts.

However, when things started to get better in the 1960s and they got work in the county council, their whole mentality changed. They were happy to meet you and they would ask how much they owed.

We must ensure that we do not put people out of work. Before the introduction of the Act under which an employer was obliged to keep a person who had been employed for a year, many Senators, including Senator Costello and I, got work in the county council, the health boards and other places for young people who left school. They worked their hearts out and they got good jobs as a result. They got temporary employment for, say, four or five years but they were working. Nowadays whether they work their hearts out, they know they will not be kept so there is no incentive for them to give their best. The employer is not interested in them either because no matter how good they are, he or she will let them go because if they are employed for more than a year the employer is in trouble.

We must be careful. Working for a low wage is not right but we must see the whole picture. If fellows like me who had problems getting work — in my case it was due to a handicap — did not take poorly paid jobs, we would never have got jobs. Thank God I have been very successful. I always speak from my experience and I would not like to see us militate against the poor in society who may not be as bright as others. We should give them a chance to get a low paid job to gain experience. Previous generations paid for that experience — they paid to serve their time. Young people should serve their time so that they will have a solid foundation on which to build a good life and rear a good family.

Mr. B. Ryan

For the record, the Southern Health Board, which is part of the public sector, pays home helps £1.70 per hour; that is less than 50 per cent of what many other health boards pay their home helps. The board is hoping to increase it to £2 per hour about now if it can afford it and it will increase it further if the Minister will gives the board more money.

Somebody I know worked in a marine leisure centre last summer; she was 17. She worked a 40 hour week with no recognition of bank holidays and was paid £1 per hour. If she works in the same place this year, she will be paid £2 per hour. The person in question was conducting a marine leisure week for small children aged eight or nine so she had a responsibility to keep an eye on the kids through lunchtime even when she was supposed to be at lunch. The kids were paying £150 per week each for the privilege. It would have added £4 to each of the ten kids' fees for the week to double that wage to £80 per week. The reason this can be done is that many young people love the idea of working out of doors in a healthy enthusiastic environment and will do it for £40 to £80 per week because it is better than being stuck cleaning shelves in the back of Roches Stores for the summer. The tragedy is that there are employers who are prepared to and can get away with exploiting these young people.

I do not want to jeopardise that young person's chances in the future of working at the facility to which I referred. However, the Southern Health Board rips off home helps, the majority of whom are women, and takes advantage of their commitment to their neighbours. That commitment goes beyond the hours for which these people are paid. Let us not imagine that this does not happen. Some of the people paid £80 per week at the facility to which I referred are expected to live on site and £30 of their wages are deducted in respect of accommodation.

I accept that everyone opposes the exploitation of people in principle. Everyone is against sin in principle, but most of us sin. We recognised long ago that we need external incentives — be they the wrath of Church, State or partner in life, one's conscience, etc. — to prevent us from sinning. We refrain from sinning not only because of our nobility but because we believe the odds will go against us if we misbehave.

None of the previous speakers referred to a figure in respect of a minimum wage. Everyone is in favour of a fair wage but no one is prepared to suggest a figure. Let me be combative. However, I do not want to be misunderstood, because I am not referring to the legislation, of which I am in favour, going through the Lower House at present. However, the upper limit proposed by the Irish Congress of Trade Unions is £5 per hour. That represents £10,000 per year, which is less than 50 per cent of what most Senators believe to be the hopelessly inadequate salary of a Member of Seanad Éireann. If I was obliged to live solely on my Seanad salary, I would share that view. Therefore, I have no intention of making political capital from the remuneration of Members of the Oireachtas because, by and large, in terms of their work and the insecurity attached to politics, they are not particularly well paid. The upper limit of the Irish Congress of Trade Unions' expectation in respect of a national minimum hourly rate of pay is £5 per hour. If they are concerned that this amount will have spin off anti-competitive effects, will Members state what they believe to be a fair wage?

The Government amendment refers to competitiveness. I am intrigued about the impact that paying people who work in restaurants and fast food outlets a proper wage will have on national competitiveness. I understand that the cost of labour may be a consideration in internationally traded sectors of the economy. However, I have long disputed the simplistic idea that increased wages means reduced competitiveness. The calculation is more complicated than that, but that is not the way Irish employers, particularly the representatives of small business, represent it. The figure for a minimum hourly rate of pay appears to rest somewhere between £3.50 and £5. My view is that it should be closer to the figure advocated by the ICTU than to any other.

It must be remembered that we are not discussing a minority of people in society. The last report of the Revenue Commissioners, which was published in 1996, states that there are 600,000 people with incomes of £10,000 or less. In other words, these people earn less than £210 per week. There are two arguments which can be put forward in this regard. First, increasing those people's wages to £5 per hour would bankrupt the country and, second, a country which, in the period of its greatest economic growth and spectacular economic performance, does not increase their wages is betraying the 40 per cent to 50 per cent of the workforce who are badly paid.

With regard to the Government amendment and the commission, we did not need a commission to halve capital gains tax, which will do spectacular damage to the country's competitiveness. We did not need a commission to decide to load tax cuts in favour of the well off. However, we apparently need a commission to consider the exploitation of a significant section of the workforce. We do not need such a commission which is in many respects a temporising exercise that will produce a confused, contradictory and heavily qualified recommendation in respect of a minimum rate of pay. We must accept there is a rate between £3.50 and £5 per hour below which no adult should be asked to work under any circumstances. I support the motion.

Minister of State at the Department of Health and Children (Dr. Moffatt)

The Senators should learn not to rush fences. Instead of deploring the delay by the distinguished and extremely hardworking members of the commission they should commend them for their comprehensive work which they will present to the Tánaiste in the next few days, following the completion of their consultations with the social partners. During the periods when the Senators' party was in Government, the forerunners of the campaigns which they now laud so enthusiastically fell on deaf ears — both left and right — and there was little in the way of meaningful commitment towards a national minimum hourly wage. The Senators entry into the fray at this late stage, with feeble reminders to Government to deliver on its commitment, is particularly wry in that context.

The Programme for Government — An Action Programme for the Millennium — identified key priorities towards attaining an inclusive society. The Government committed itself to "address urgently the issues of exclusion, marginalisation and poverty and. (to) halt the continuing drift towards the development of a two-tier society in Ireland". The introduction of a national minimum hourly wage is only one, albeit important, element within this context and aims: to ensure "fair" or "‘decent" remuneration and prevent the exploitation of workers, particularly women and young persons; to act as a means of pay determination where collective bargaining is absent or weak; to prevent competition between firms on the basis of forcing wage rates down to very low levels; to reduce poverty; and to encourage the unemployed to seek employment in what are traditionally regarded as low pay, low skill jobs.

The Government commitment in respect of exclusion is consistent with the general thrust of Partnership 2000, which sees the adoption of a coherent inclusion strategy and the strengthening of economic capacity as complementary, not competing, concepts. In the same vein, Partnership 2,000 sees competitiveness as determined not merely by a broad array of pay, productivity and other similar indicators, and makes the point that "improvement in social solidarity and increased social inclusion make an important contribution to sustaining competitiveness and society's overall efficiency and cohesion".

Clearly, addressing low pay is not the complete answer to social exclusion. Important factors in determining the type of employment secured and the level of earnings include: education attained, level of skill and history of employment and unemployment. In addition to minimum wage fixing to increase earnings, the effect of taxation, PRSI, and social benefits — including in-work supports — is also relevant and an integrated approach to enhance the earnings potential of low paid workers, involving education and training, is required.

When we made our commitment we recognised it was vital to ensure a balance between the protection of workers who are vulnerable and prone to be exploited, particularly women and young workers, and the protection of employment and competitiveness, especially in the context of small and medium sized firms. The outcome of a national minimum wage must ensure that it is a victory for jobs and worker's rights. As Senator Quinn said, we need more jobs. That is why the Tánaiste sought the approval of the Government to establish a National Minimum Wage Commission and gave it comprehensive terms of reference. These were to advise on the best way to implement the commitment having regard to the level and extent of low pay in the economy; to examine the range of possible mechanisms for determining and implementing minimum wages and, in combination with it, to describe and assess the existing minimum wage fixing machinery and its potential for addressing low pay in the economy; to examine measures which will address any adverse impact on employment and competitiveness, in particular with regard to small and medium enterprises; to consult with the social partners before the finalisation of its report and to report to Government by the end of 1997. The interim report has been received and the final report will be ready shortly.

We are not in a green field site, so to speak, with regard to minimum wages. Under the terms of the Industrial Relations Acts, 1946-90, the Labour Court is empowered to establish joint labour committees to regulate wages and other conditions of employment in certain employment sectors. Statutory minimum wages in the sectors covered by the JLCs may vary according to age and length of service. At present, there are 17 JLCs for such occupations as agricultural workers, retail grocery workers and contract cleaning workers. Furthermore, JLCs also specify other conditions of employment for the workers covered. The Labour Court incorporates these conditions, together with minimum wage rates, in employment registration orders. In essence, the JLC system is highly differentiated, with rates of pay for different categories varying with experience and levels of skills and responsibilities.

Registered employment agreements are another form of statutory minimum wage fixing. These are agreements which have been registered by the Labour Court. The effect of such registration is to make the provisions of an agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not party to the agreement. At present there are five REAs covering, for example, the construction industry and the footwear, drapery and allied trades for the Dublin area.

In excess of 200,000 workers are covered by the JLC and REA systems. The JLC system has been regulating minimum wages and other conditions of employment for the past 50 years. Assessing the future potential of JLCs and REAs for addressing low pay in the wider economy is part of the remit of the National Minimum Wage Commission. It is important for the Tánaiste to get the commission's advice on whether features of the present JLC system in particular could be used in the eventual national system and, if not, how the two systems should intermesh.

The terms of reference of the commission require it to have regard to the level and extent of low pay in the economy. In the literature on this issue two perspectives on defining low pay are frequently identified. The first is to define low pay relative to other earnings, while the second is to assess pay by reference to poverty or standard of living criteria. A 1991 ESRI study found that, using the earnings based approach, part-time workers are significantly more likely than fulltime workers to be low paid and that women workers are more likely to be low paid whether full-time or part-time. In addition, low paid full-time workers are predominantly young. The study also found that most low paid full-time employees in the sample were in occupations or sectors not covered by the existing JLC minimum wage regulations and suggested that an extension in the coverage of the JLC system would have significant potential for reducing the extent of low pay. Three new JLCs have been established since the completion of the study — a retail grocery and allied trades JLC in 1991, a catering JLC for the County Borough of Dublin and the Borough of Dun Laoghaire in 1992 and a hotels JLC for the same geographical area in 1997.

A more recent ESRI study concludes that the probability of being low paid for women is about twice that for men overall, but that most of this differential is among those aged 25 or over. The percentage of low paid workers is very much higher among those aged under 25 years than among older workers. In terms of composition, about 55 per cent of the low paid are aged under 25, 30 per cent are women aged 25 or over and 15 per cent are men aged 25 or over.

We are conscious of the need for fresh thinking as regards the machinery which establishes and reviews the national minimum wage and, as important, ensures its implementation. To be effective, minimum wage machinery should be responsive to the needs of workers, be capable of clearly establishing the entitlement of workers and the obligations of employers, thus leading to efficient enforcement and an accessible means of redress where infringements are detected or implementation disputed.

The employment impact of a national minimum wage depends primarily on the level at which it is set. Some sectors — for example, clothing and textiles — are clearly more vulnerable than others. The available literature is not conclusive as to the overall employment implications of a national minimum wage. Critics point to the possible negative effects on employment. The strategy document Growing and Sharing our Employment concluded that if a national minimum wage is set at a level not matched by productivity it would have a potentially negative effect on jobs. Others argue — and there are studies which support the view — that introducing a minimum wage can lead to an increase in employment, productivity, and product and service quality in certain circumstances. Senators have made this point in the debate.

These are some of the many issues on which the Tánaiste wanted guidance before presenting proposals to Government. The composition of the wage, for example, is an important issue. Should payments in kind be permitted to substitute for cash wages? What about commissions, bonuses, gratuities or pension contributions? The matter of relativities and how to deal with them is another complex issue. Workers not directly affected by the introduction of a national minimum wage may seek to restore differentials with those employees who benefit from improved wages. This indirect effect has the potential to further damage our competitiveness and cause inflation. The Tánaiste believes that the social partners and the dispute settlement agencies have a role to play in containing this dimension and she awaits the commission's advice on how to deal with it.

Different levels of pay in respect of training or apprenticeship status, age and experience are an established feature not just of our employment regulation orders but also minimum wage fixing machinery elsewhere. There is research on the sensitivity of youth employment and training to the setting of minimum wage levels for young people. This is one of the issues to which the commission has directed its attention. The introduction of a national minimum wage cannot be approached on a simplistic basis and the report of the National Minimum Wage Commission will provide a comprehensive analysis of the issues to be addressed.

I understand the commission has consulted widely in its work and received a substantial volume of evidence. The members of the commission have wide experience of business, employment rights and industrial relations. I pay tribute to them for their work on the commission and to the chair of the commission, Ms Evelyn Owens. I commend the Government's motion to the House.

Ms O'Meara

I thank the Minister for his remarks and, particularly, the indication that the report will be presented in the next few days. My colleague, Senator Costello, will respond to the debate. There is no great measure of disagreement across the House on the virtues of a minimum wage and on the wider issues raised in this debate. We welcome the Government's commitment to a minimum wage and look forward to early action on the issue. We also share the concern that despite unprecedented economic prosperity, a two tier society appears to be emerging. This was adverted to by the Minister when he quoted from the Programme for Government. He said the Government is committed to urgently addressing the issues of exclusion, marginalisation and poverty and to halting the continuing drift towards the development of a two tier society, which at least acknowledges that it is happening. Despite all our best efforts and wishes that it would be otherwise, the well off do better than the poor in times of economic boom. The figures speak for themselves.

Figures recently published by the Dublin Council of Trade Unions stated that 24 per cent of workers in this country, just under a quarter, are paid less than 66 per cent of average earnings. Last year the Small Firms Association claimed that one third of firms surveyed paid less than £3.50 per hour. In a country of booming growth and profits, large salaries and large amounts of money being paid for houses, particularly in this city, there are those on whom the economic boom has little or no impact.

In that context and the debate on the minimum wage, let us remind ourselves what the minimum wage is about. It is about sharing our economic benefits fairly and a fair wage; but it is essentially about fair play for all. It is also about protecting vulnerable workers. We all recognise there are employers who are not fair to their workers, who will not share profits with them and who will exploit particularly young workers, an issue to which the Minister referred in his reference to reports done on the subject. Those who suffer most from low pay are young workers who, as the Minister said, are mainly women. There is a growing problem of young women in the workforce who are simply not getting their fair share and who are vulnerable.

A minimum wage is also about encouraging a work culture. We heard many references on both sides of the House to the dangers of discouraging the work culture. I add my voice to those who say a minimum wage would encourage people, particularly young people, to join the workforce because they would at least be respected by those for whom they work.

This debate is taking place against a backdrop of unprecedented economic prosperity. What type of economy are we generating with that economic boom? Are massive profits being made on the backs of low paid workers? Do we want an economy based on low pay and possibly low skills, or do we want a highly skilled well paid workforce? The choice is simple and obvious. The benefits of an educated, skilled and well paid workforce are obvious not only in terms of the tax yield to the Exchequer and the decrease in dependency of families and individuals on the social welfare system but also in terms of the positive spin-offs to local economies of having well paid workers in the area, to the education system and to children. We do not have to go too far to see poor communities and the major problems they encounter. Our objective as public representatives and legislators must always be to generate greater economic wealth for all and to share the benefits fairly.

We have already shown that we can attract employers and large multinationals, in particular, which want to employ educated and skilled workers. We have shown we can operate competitively in that context and that we can grow our economy and employment in the process. As the Minister rightly pointed out, we have a problem of low pay. The culture of not working, to which Senator Quinn referred and of which a number of Senators gave examples, is a problem about which I am concerned, particularly as it relates to young people. We know of situations where young people leaving school or dropping out of school early choose not to work but to depend on unemployment benefit. A number of people said that was wrong.

I know of a case where a 17 year old girl, who unfortunately failed to sit her leaving certificate, began work during the summer in a supermarket but then decided a few months later not to work but to claim the dole instead. No amount of persuasion or demonstrating that she potentially faced a lifetime of dependency on the State or low pay and few skills would convince her otherwise. As far as she was concerned, she was 17 years old and was getting almost the same amount money into her pocket for doing nothing as she would spending long weekends and long hours doing what was effectively boring work. That problem must be tackled; but it will not be tackled by maintaining wages, particularly for young women and girls, at a low level. It must be tackled in the wider context of offering training and maintaining incentives to stay in the education system. We all agree on that.

The argument about competitiveness arises in this context. As other Senators argued, the minimum wage would play a role in generating a level playing pitch and would not be a disincentive to employers or operate against competitiveness. That is worth pointing out in that it is not as if the minimum wage is a new idea which recently come up for discussion. The most capitalist country in the world, the United States, operates a minimum wage system and it does not appear to have a negative effect there.

There is a question of balance between a fair deal for workers and maintaining our competitive edge, which is acknowledged by congress and trade unions generally. All workers, including trade union members, have benefited from our economic success and it is in all our interests to maintain our competitive advantage. However, that does not have to be jettisoned while introducing a minimum wage. It cannot be taken in isolation and it must be part of an overall strategic policy approach to combating poverty and the failure of some people to maintain a job, which has nothing to do with the lack of availability of work but more to do with confidence, lack of skills and low educational attainment.

I am glad the Minister referred to those issues in his address. This issue should be taken in the context of the tax and social welfare code, of training and education, of measures to promote equality and social inclusion. I hope the Tánaiste will publish the report when she gets it so as to generate a wide debate on it. I hope she will move quickly to implement what I hope will be solid recommendations in favour of a decent minimum wage which will say to low paid and young workers and to women, in particular, that they too have a role to play and will get a share in our economic boom.

Mr. Mooney

I welcome the Minister of State to the House. I feel like the person who arrives late at the party to find all the goodies are gone. There is such consensus on this motion, fuelled by the Minister's excellent contribution and by Senator O'Meara, that one wonders which button to push to awaken people after an hour and a half talking on the subject. It is an important issue but, like the Minister of State, I question the motives of our friends in the Labour Party which are more political than anything else. However, the Minister dealt eloquently with that so I will not go down that road.

The debate on a minimum wage is not about if but when, as IBEC has recently, albeit reluctantly, come on board. It is ironic in the context of this debate that our position is behind that of our neighbours in the United Kingdom where the debate has advanced to the detail of the amount of money involved in providing a minimum wage. While all would welcome a rapid implementation of the commission's recommendations, and I have no reason to believe the Government would unduly delay it, the important issue of our competitiveness is at stake. It is not so much competitiveness within the domestic economy as competitiveness in trade with the United Kingdom, to which over one third of exports are sold, and with the rest of the European Union.

It is interesting that the unions here have opted for a minimum wage of £5, some 64 per cent of average earnings. The UK has opted for a figure of 50 per cent of average earnings, while the EU average is 55 per cent. If one supports the trade union stance, it is supporting a position which could endanger our competitiveness. I hope the Government monitors the situation in the United Kingdom as regards the minimum wage.

Some commentators go so far as to suggest we should await the UK's decision on the figure for a guaranteed minimum wage. The argument is plausible. We would know what we would face, given the volatile sterling exchange rate and the fact that the United Kingdom has opted out of early entry to the euro — factors which put us, a trading nation vulnerable to the winds of economic change, in an exposed position.

I do not believe we can compare the United States experience with ours. We have not developed a continental economy to the same extent as America. If that were the case, we would be able to buy our goods more cheaply. The issue as to why goods can be bought more cheaply in America although there is an open market in Europe is one which is exercising the minds of those in the European Union. I focus on the competitiveness aspect of the debate, not to argue against the concept, of which I am fully in favour, but because I believe we should move slowly due to the exposed nature of our economy.

I fully agree that we are far from being an inclusive society. There are still people on the margins who are not gaining any economic advantage from the expanding economy. However some people are gaining; we have not stood still. I do not suggest there is a béal bocht attitude but it reminds me of a sector of the economy — I will not name it for fear of being attacked — which, when I was a small boy, was always complaining. One wondered what they would be like if they ever had a good day. They complained in good and bad times. The economy is now much better compared to what it was and we are benefiting. There has been an increase in employment and a decrease in unemployment, so some people are benefiting. Emigration has fallen to a historic low to the extent that there is now net immigration into the country.

The economy is driven by unprecedentedly high levels of growth. What would happen if that were to fall off? We have all heard the prophets of doom in recent days speak of impending inflation and the effect it will have on wage levels. If we enter a period of high inflation, I shudder to think where we will end up. I hope this will not happen and the evidence to date in the consumer area, with the exception of the outrageously high house prices in Dublin, is that the consumer price index has not moved appreciably. I am inclined to believe that one of the reasons is the high incidence of UK multiples here which are absorbing the currency exchange rate between the Irish pound and sterling, something which is also historically high.

We may be an island nation geographically but we are far from being such economically. We must examine where we are going once we have the commission's report because the ultimate success or failure of a minimum wage in this country will fall on the social partners. There should be an agreement between IBEC and the trade unions with the Government acting as referee. Arriving at a minimum wage is a complex matter incorporating a variety of aspects, many of which were referred to by the Minister and my colleagues on both sides of the House. I believe we can emerge a stronger nation. A minimum wage will add to the employment levels and protect the disadvantaged, especially the young workers. I hate to think of that 17 year old girl referred to earlier. It is a sad commentary and is, perhaps, another area of debate that this nation is prepared to hand out State money to a 17 year old to sit at home without any quid pro quo.

Dr. Henry

I welcome the Minister to the House. I was glad to hear him state the commission is to report shortly. It is a most distinguished body and we are fortunate enough to have Ms Evelyn Owens, a member of the Labour Party and distinguished Member of this House for many years, as chair of the commission. I look forward to its report.

There has been much discussion on the effects of a minimum wage on our competitiveness. It is important to remember that while minimum pay would increase some labour costs, the total cost of employing people relative to productivity is high in many European countries compared to the rest of the world because of the high non-wage costs. These non-wage costs are dear to us — holiday pay, sick leave and maternity benefit, things which nobody would want to give up. They are all worthwhile but unfortunately some of them are very expensive.

Non-wage costs within the European Union are around 50 per cent of the labour costs and these costs are unfortunately rising faster than any other business costs. In some EU countries they amount to 80 per cent of wage costs in comparison to only 40 per cent of wage costs in the USA, but I would not want to see change in the benefits we have in return for becoming as competitive as other countries which do not have these labour costs. It is important to see if these non-wage costs can be reduced so higher wages can be paid while retaining our competitiveness.

There are several ways we can do this. One is to examine ways in which the schemes which exist to get people back into well paid employment could be better utilised. Some of the difficulties Senators have mentioned in getting people to return to low paid jobs or apprenticeships I find profoundly depressing. It would be awful to think there is a culture of not working, and I do not think there is one. As a doctor I deal with a wide cross-section of society and I find it hard to subscribe to the idea that there are thousands of people who do not want to work. A large number of them have difficulty in seeing the difference between whether they would be better in or out of work, but I agree with Senator O'Meara when she said it is sad to see young people going onto the dole because they found the job in the supermarket boring. Senator Quinn talked about people who would not go on apprenticeship schemes because whereas in three or four years' time they would get £350 per week, at the moment they would have to work for much less.

I spoke on the Adjournment last night about trying to get a better deal for postgraduate students. These people are contributing an enormous amount to the economy. They may be working for their PhDs, but they are involved in research which is necessary for innovation within industry in this State. Many of them are involved in campus companies in the third level institutions. I mentioned the fact that some of them receive only £2,000 per year from Forbairt. That does not even pay their fees, yet they are prepared to take jobs on the side for three years to try to support themselves while they are involved in this work. People may say they will be going into highly paid jobs later, but I assure you there are many of them who would find £350 a week after four years not bad at all.

There are many graduates with language skills, in this city in particular, working in telesales on £10,000 per year. In talking up the economic boom we have made people unrealistic about the wages paid to some people. Does everyone think that people are being paid £40,000 per year? They are not.

I am glad the Minister mentioned the position of women in his speech. Senator Keogh mentioned this also. You can rest assured that if a group are badly paid, the women will be paid worst of all. Despite 25 years of equal pay for equal work, we still have a situation where women are paid 70 per cent of the average industrial wage. As the industrial wages rise, women's wages rise at the same ratio. A situation exists where women are still paid very poorly. It is very sad to hear jobs such as home-help and childcare are some the of the worst paid jobs in the country when you think of the amount of skill and dedication required for jobs like this. I know home helps who go to work unpaid on bank holidays because they know how dependent others in society are on them. They run from pillar to post doing an hour here and there for three or four old people, for which they get £2 per hour. That is a disgraceful situation when you think of all we say about wanting to care for the elderly.

I brought the situation regarding childcare up when the Finance Bill was debated. Why have we not tried to elevate the position of those involved in childcare by allowing tax relief of up to £2,000 per year, as promised in the Fianna Fáil manifesto? It is dreadful to think of someone, as mentioned by Senator Ryan, who was minding ten children for £1 an hour. Water was involved as well. One would think the parents of those children would have looked at the organisation to see the adequacy of the facilities for their children and the rates of remuneration for the staff. This girl was in a most important position.

I feel our schemes are badly utilised. The Vocational Training Opportunities Scheme enables certain unemployed people and lone parents who have been in receipt of benefits for at least six months to take up full time educational courses at vocational education centres. There is only one problem: 90 per cent of the places are reserved for unemployed participants. The remaining 10 per cent is divided between lone parents, people with a disability and adult dependants of people on unemployment assistance. I have the privilege of being the chair of Cherish and recently we sent two girls to try to get onto a scheme with places for 20 people. We had seven people who could have gone. When the girls arrived at the scheme they were the only two who turned up and the scheme could not take place as there had to be a minimum of seven people. If I had been allowed to send all seven of my people the scheme have could gone ahead. We are constantly hearing of CERT advertising for people for schemes which are not being run. This situation must be addressed so that we can provide employment for people who dearly want it instead of talking about people who do not want to work.

Mr. T. Fitzgerald

I am dismayed at Senator Costello's criticism of the Government, the Tánaiste and the commission. I agree with 90 per cent of the motion, it nearly reads the same as the amendment, but when it comes to deploring the delay of the National Wage Commission in producing a report and calls on the Government to honour its commitment, the last four years have seen the Labour Party produce nothing while in Government. To put down this motion tonight is cynical and hypocritical, especially when it was the Tánaiste who commissioned this report.

I do not like the criticism of the Tánaiste's absence tonight. There are valid reasons why she is not here, but it gives the impression to those listening to the debate that the Tánaiste deliberately stayed away because she did not want to be part of this. That is totally untrue and I want to stamp on that idea straight away. I was on the Opposition benches on numerous occasions when legislation and motions were dealt with by Government Ministers who were not the Government Ministers expected.

I am not against the gist of the motion, that a minimum wage be introduced. I have listened to the arguments tonight and I think people are puzzled about the right approach to this issue. It is not so easy to stop the talking and give everyone £3.50 or £5 per hour or a sum in between. I agree with Senator Henry's comments on training. Where do qualifications come into this debate? My son was recently offered a job at £320 per week but he would remain in that rut for the rest of his life. Alternatively, he could start at £170 per week and reach £30,000 per year in five years as a result of training and providing he passed the various steps. Is this a minimum wage to give a young married man? He chose the latter because it offers the best opportunities.

I started working for a farmer at 14 years of age. After three years I left to learn carpentry. My parents paid £150 to train me as a carpenter — the fees were £50 per year. I was happy learning carpentry as I was working for the farmer. I received £1 per week. I had enough to eat and a comfortable place to sleep. I did not have enough money to go to the Canaries for two weeks. Today that would be termed as poverty. However, as far as I am concerned, I never lived in poverty. I worked and educated myself for what I have today and I have no regrets and attach no blame to anyone.

However, times are changing. I married 30 years ago. Every day since then I could tell what was happening without leaving my home. I knew it was 7 a.m. because I could hear the gate opening on the farm next door when the farmer was taking his cows home. As the seasons changed I knew everything that was going on by observing that farmer. All of his efforts were designed to produce a gallon of milk every day. He was a small farmer with 12 or 15 cows.

Kerry Co-op has done much for the Kerry peninsula and the country. It is the biggest agricultural co-op in the world. I am not criticising Kerry Co-op or anyone else. However, the entire Dingle peninsula, including the farmer who lived next to me, was dependant on the sale of milk for a long time. Five years ago Kerry Co-op sunk a well in Ballyferriter to produce Kerry water. That factory now employs seven people in good jobs. More water than milk now comes over the Blennerville bridge, which is the gateway to the Dingle peninsula. Consumers pay £3 per gallon of milk but we pay £10 per gallon for the water. This no longer makes economic sense.

Senator Ryan referred to someone working in a leisure centre for a couple of pounds per hour. One can pick out instances everywhere but the Senator may not have looked into the situation adequately. I probably know the person and the place the Senator is referring to, but is that person given a few pounds per week on top of their wages because they are employed on a FÁS scheme? They may be getting more than the Senator suggests.

A recent RGDATA survey discovered that there are 15,000 jobs available in the grocery sector. Are employers in this sector paying wages which are so low that people will not accept the jobs? I agree with Senator Quinn that if one pays the minimum wage being demanded one would bring a person's salary up to £200. However, someone who has been working in that sector for many years, is experienced and qualified and is earning £300 will then demand an additional £100. Where will this stop? I support this amendment, and there is not much wrong with most of the motion except for the unfair criticism. Senator Costello should withdraw his remarks and wait for the commission to report.

Mr. Costello

I will not withdraw any of my remarks and I am surprised at the thin-skinned approach adopted by Senator Fitzgerald. My remarks concerning the Tánaiste, Deputy Harney, expressed disappointment that she was not in the House. I am sure she has important business to attend to but this is also an extremely important debate and we would have liked to have the person responsible for establishing the commission present.

This motion was tabled because a December deadline was imposed on the commission to produce its report. That deadline was extended to January, February and March. We waited for three months before deploring the delay in the publication of the report.

Mr. T. Fitzgerald

Why did the Senator not establish a commission?

Mr. Costello

The Minister stated that this is a feeble reminder by the Labour Party. We are in Opposition and our function is to remind the Government. We are the watchdog which will ensure that the Government's Action Programme for the Millennium is implemented. We will continue to do so and the Minister should compliment us on how efficiently we are doing so rather than criticising us. I thank Senators and the Minister for their contributions. By and large they were positive and we are not far apart on the objective of ensuring that a decent wage is paid to everyone employed and that we do away with the exploitation of workers.

This debate does not take place in a vacuum. The ISME survey indicated that one third of firms are paying less than £3.50 per hour. Senator Fitzgerald gave the example of his son earning £150. That is a low figure, but it is £4.25 per hour and is above the figure indicated by the ISME survey. The survey also indicated that approximately 600,000 workers earn £10,000 or less per year. This is less than the £5 minimum threshold suggested by ICTU, DCTU and INOU.

The main point raised in this debate was the emphasis on the possible loss of jobs and the need to get the package right. It is very important that we do so and this is a complex issue. However, I can quote research from the London School of Economics and Princeton University which indicates that the fears concerning job losses are unfounded and that the opposite is the case. The unemployed will be able to return to work because it will be far more attractive, it will limit the black economy which operates in most countries, particularly capitalist countries, and it will ensure that those on social welfare are provided with a greater attraction to entering employment. This latter issue has been one of the areas of criticism consistently raised by the business sector. It will also greatly help in eliminating exploitation. Poor employers are now getting the taxpayer to subsidise employees through family income supplement. There are tremendous benefits in terms of competition and the absence of loss of jobs.

A rate of £5, or 64 per cent of the average industrial rate, has been mentioned by the DCTU and the ICTU in the context of a minimum wage while the Scheme Workers Alliance has mentioned a rate of £6.30 per hour which is 90 per cent of the industrial rate. Community employment schemes pay approximately £4.50 per hour to those working a 20 hour week.

We are pleased that the Minister has given a firm commitment that the commission will report within the next few days. We are delighted with the degree of support from all sides of the House for a decent minimum wage for ordinary workers. In this context we will not be pressing the motion.

Amendment put and agreed to.

Question, "That the motion, as amended, be agreed to," put and declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. T. Fitzgerald

At 10.30 a.m. tomorrow.