Thursday, 11 July 2019

Questions (899)

Willie O'Dea

Question:

899. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection the estimated cost of implementing a living wage €12.30 for all employees directly employed and or in agencies under her remit; and if she will make a statement on the matter. [30770/19]

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Written answers (Question to Employment)

The Living Wage is based on research identifying the income required for the Minimum Essential Standard of Living (MESL) for a single-adult household in Ireland. It is an estimate made by a Living Wage Technical Group, led by the Vincentian Partnership for Social Justice (VPSJ).

The living wage approach starts with an analysis of the expenditure likely to be incurred by an individual in an independent household for the essentials of life and calculates the minimum income required to support this. Not everybody in the labour force is living independently and therefore do not necessarily need to achieve a MESL on a personal basis to achieve MESL on a household basis.

By contrast, the national minimum wage is the legally-binding lowest average hourly rate that can be paid by an employer to an employee. This rate is set and governed by the National Minimum Wage Act, 2000, which applies to all employees, including full-time, part-time, temporary and casual employees, with some exceptions. The Low Pay Commission was specifically established to make evidence-based recommendations regarding the national minimum wage, having regard to a range of criteria such as the state of the economy and labour markets, international comparisons and likely impacts on employment and competitiveness. The current rate is €9.80 per hour.

The national minimum wage approach seeks to find the balance between a fair and sustainable rate for low paid workers and one that will not have significant negative consequences for employers and competitiveness. It is a pragmatic approach providing a clearly defined minimum hourly rate for employers, and giving them the freedom to pay higher rates, whilst also providing a measure of security for low-paid workers. As it is legally enforceable, it provides protection for workers.

The national minimum wage applies to all employee's including, if applicable, those employed in my area of responsibility.