Dáil Éireann Debate, Tuesday - 2 December 2014
248. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on the latest quarterly decline in average earnings and hours worked; his plans to address the consequent decline in living standards; and if he will make a statement on the matter. [46175/14]
View answerIt is not correct to state that the number of average hours worked has decreased. According to the CSO Quarterly Earnings and Labour Costs release of 25th November 2014, average weekly paid hours increased by 0.3% over the Quarter and by 0.6% over the year. There was a fall in average weekly earnings of -1.9 % over the Quarter and by -0.8 % over the year. Across the economic sectors, weekly earnings increased in 6 of the 13 sectors, most notably in Industry (+3.4%), Construction (+0.2%), in Wholesale and Retail trades (+1.6%) and in the Transportation and Storage (+0.2%), which combined account for 710,000 of those at work. The largest percentage sectoral decrease was recorded in the Professional, Scientific and Technical activities sector, which fell by -5.3%. At the same time, this economic sector experienced one of the largest quarterly employment increases in the latest QNHS - an increase of +5%. It may be that this additional employment comprised newer entrants with relatively lower entrant earnings levels and that this has contributed to the lowering of the average weekly earnings levels in this economic sector. It will require analysis of a number of further QNHS releases to clarify this. In itself therefore, this decrease in average earnings may partially the result of a positive employment recruitment trend.
The Government is undertaking a number of initiatives to sustain and grow living standards. Following measures introduced in Budget 2015, from January 2015 the standard rate tax band will increase by €1,000: from €32,800 to €33,800 for single people and from €41,800 to €42,800 for married couples with one income. The higher rate of income tax will reduce from 41% to 40%. The Budget also reduced the two lower rates of USC from 2% and 4% to 1.5% and 3.5%, respectively. And increased the threshold before which the 7% rate of USC becomes payable to €17,576, so that those on the minimum wage will now only be liable to a maximum 3.5% rate of USC.
The national minimum wage in Ireland is considered to be relatively high by international standards. The most recent figures published by EUROSTAT show that Ireland’s rate is the fourth highest among the 21 EU member states that have a national minimum wage. When the cost of living is taken into account, Ireland’s rate is the fifth highest. The decision to restore the national minimum wage to €8.65 per hour, after the cut by the previous Government, with effect from 1 July 2011, together with the decision to put the joint labour committees, JLC, system on a more secure legal and constitutional footing and reinstate a robust system of protection, represents a significant commitment by this Government to protect the lowest paid and most vulnerable workers.
In addition to Ireland's national minimum wage, JLC and REA structures, we have a system of supports through the Department of Social Protection supporting low income families.
The Statement of Government Priorities 2014-2016 contains a commitment to establish a low pay commission on a statutory basis as an independent body to make annual recommendations to the Government about the appropriate level of the national minimum wage and related matters. I am currently developing proposals to implement that commitment.
However, as noted above, it is the creation of employment that offers the greatest potential to enhance our living standards. Implementation of the Action Plan for Jobs and the development of the 2015 plan are critical in this regard.
