Dáil Éireann Debate, Thursday - 10 February 2022
203. Deputy Brendan Smith asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will increase the minimum wage in view of the severe pressures on low-income workers at present due to rising costs of living; and if he will make a statement on the matter. [7362/22]
View answerI am aware of the pressures people are feeling as the cost of living increases. I know that many costs have increased sharply and that those on lower incomes are being disproportionately affected.
Relevant Government Departments have been tasked with developing proposals for a package to help families with the cost of living and my Government plans to finalise this package shortly.
In relation to the minimum wage, since its establishment in 2015, the Low Pay Commission has been responsible for making annual recommendations to Government on the appropriate rate of the National Minimum Wage.
Since the establishment of the Low Pay Commission, the national minimum wage has increased from €8.65 per hour to €10.50 per hour between 2016 and 2022, a 21.4% increase. This compares with an increase in consumer prices of 7% in the 6 years to December 2021. The Minimum Wage has increased substantially in real terms over recent years.
The share of workers on the minimum wage in Ireland has also fallen consistently since the establishment of the Low Pay Commission. The share of workers on the minimum wage or less as a percentage of the total labour force has reduced from 9.3% in Q4, 2016 to 6.8% in Q4, 2020.
The Low Pay Commission is made up of an equal number of employer representatives, employee representatives, and independent members which helps to provide a balanced view when determining an appropriate rate for the National Minimum Wage. In addition, the establishing legislation requires the Low Pay Commission to give consideration to a range of issues when arriving at a recommendation for the appropriate National Minimum Wage rate. These issues include the cost of living, competitiveness and the likely effect that any proposed recommendation will have on future levels of employment.
When considering increases in the National Minimum Wage during a period of inflation Government must be is conscious of the need to avoid second round effects or a wage-price spiral.
That being said, I have been clear in my commitment to improving pay and terms and conditions for everyone, but particularly for those on low pay.
In 2021, I asked the Low Pay Commission to examine and make recommendations on the best approach to achieving the programme for Government commitment to progress to a living wage over the lifetime of the Government.
The Low Pay Commission commissioned and received a background technical research report on the concept of a living wage. The Commission is currently evaluating this research and is due to report their findings and recommendations to me in the coming months. These recommendations will inform Government on the best approach to progressing to a living wage.
I am committed to progressing to a living wage over the lifetime of this Government. In doing so, we need to recognise that many businesses have been badly affected by the pandemic and are also facing rising costs. We need to make sure that we proceed in a way that does not adversely affect inflation or cause jobs to be lost, either in terms of the numbers of people employed, or the numbers of hours worked. To do so would be counterproductive.
