Dáil Éireann Debate, Thursday - 3 November 2016
214. Deputy Mick Barry asked the Minister for Jobs, Enterprise and Innovation her plans to amend the legislation governing the work of the Low Pay Commission so that the minimum wage it recommends falls into line with the living wage; and if she will make a statement on the matter. [33262/16]
View answerThe Low Pay Commission was established last year through the National Minimum Wage (Low Pay Commission) Act 2015. Its principal function is, once each year, to examine the national minimum hourly rate of pay and to make a recommendation to the Minister respecting the rate, ensuring that all decisions are evidence based, fair and sustainable, and do not create significant adverse consequences for employment or competitiveness.
The Commission submitted its first report in July 2015. Its recommendation to increase the minimum wage from €8.65 to €9.15 per hour was accepted by Government and the increase came into effect on 1 January last.
The Commission’s second report was submitted to Government in July and the recommendation made by the Commission for an increase to €9.25 per hour was approved by Government on 11 October. I signed the Order on 13 October to effect the increase from 1 January next.
The Living Wage concept is grounded in the idea that a person’s wage should be sufficient to maintain a safe, decent standard of living. At an individual level the resources required to achieve a minimum essential standard of living is very dependent on family circumstances and thus the interaction of individual earnings with household income and State-provided supports such as Child Benefit, Family Income Supplement as well as supports available in relation to housing, education and health all contribute to an individual’s standard of living.
It is important that Ireland’s statutory National Minimum Wage and the Living Wage concept are not 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 that is sufficient to meet an individual’s basic needs, such as housing, food, clothing, transport and healthcare. The Living Wage is voluntary and has no legislative basis and is therefore not a statutory entitlement. It is different to the National Minimum Wage which is a statutory entitlement and has a legislative basis.
The Programme for Partnership Government contains a commitment to reduce poverty levels by supporting an increase in the minimum wage to €10.50 per hour over the next five years and rely on the annual recommendations of the Low Pay Commission on the level of adjustment each year.
The independence of the Low Pay Commission is firmly established in the National Minimum Wage (Low Pay Commission) Act 2015 (the Act). The Commission can only operate in accordance with that statutory remit and make recommendations to the Minister in accordance with the criteria that are clearly and explicitly set out in the Act.
There are no plans to make any changes to the legislation as it currently stands.
