Is it agreed to now proceed with Private Members' Business? Agreed. Officials have been in touch with all the spokespersons from the respective parties on this.
Living Wage: Motion [Private Members]
That Dáil Éireann:
— according to the Central Statistics Office, 137,200 workers reported earning the national minimum wage or less in the fourth quarter of 2018;
— female workers are currently more likely than male workers to earn the national minimum wage or less;
— half of all those earning the national minimum wage or less in the fourth quarter of 2018 were aged 24 years or under;
— according to Social Justice Ireland, 110,000 workers are living at risk of poverty across the State;
— the current living wage stands at €12.30 per hour, as calculated by the Living Wage Technical Group;
— according to the Irish Congress of Trade Unions, the ‘no-deal Brexit caveat’ contained in the Low Pay Commission’s report makes absolutely no reference whatsoever to a possible deferral of the recommended increase in the national minimum wage in the event of a no-deal Brexit;
— there are legal protections currently in place for those companies who can show they cannot afford to pay the national minimum wage; and
— there is no legal obligation on businesses who can afford to pay their workers a living wage to do so;
condemns the Government’s recent decision not to increase the national minimum wage;
— the decision by the Government not to increase the national minimum wage or introduce a living wage will place further financial pressure on thousands of workers and families who need a break;
— work must pay now and not just at some undetermined time in the future;
— proper wages and the eradication of precarious working practices should be the essential foundations of economic growth and productivity; and
— the implementation of a living wage would play a critical role in ending in-work poverty and reducing the financial pressure on many households; and
calls on the Government to:
— recognise the huge contribution low paid workers make to the Irish economy;
— immediately reverse its decision not to increase the national minimum wage; and
— introduce a living wage of €12.30 per hour in 2020, with appropriate legal protections for those small- or medium-sized enterprises (SMEs) who can show they cannot afford to pay the living wage.
I am sharing time with Deputies Brady, Cullinane and Mitchell.
I am happy to be putting forward this motion for debate in the Dáil which I hope it will approve. This is a simple motion which recognises the significant contribution workers on the minimum wage make to our society and economy. This group of workers are often overlooked when it comes to State support. They are certainly underpaid for the hard work they do every day. This group includes the preschool teachers who are so vital to our children's education; the waiters who serve us food in our favourite restaurants; the baristas who get up early in the morning to prepare coffee for other commuters; and the cashiers who sell us bread and milk at five minutes before closing time on a Sunday night for our lunch the next day. All these people work hard and deserve to get paid fairly for it.
Incredibly, last week, the Fine Gael Government, and its friends, Fianna Fáil, presented a budget that did absolutely nothing for these workers. To not even include an increase in the minimum wage was a slap in the face to the 137,000 workers earning the minimum wage who work hard day in, day out. Our motion calls on the Government to immediately reverse this decision and to introduce a living wage of €12.30 per hour next year.
The minimum wage is simply too low and workers are struggling to get by on it. Workers have waited long enough for proper pay and conditions. We want to see a living wage - a rate of pay which would allow workers to pay for the basic necessities of life, to live with dignity and to participate fully as active citizens in our society. That is not too much to ask.
I suspect I will hear the Minister attempt to blame Brexit or the Low Pay Commission for the Government's decision not to increase the minimum wage. We will not be buying that nonsense. Patricia King, general secretary of the Irish Congress of Trade Unions, herself a member of the Low Pay Commission, said, "The no-deal Brexit caveat contained in the Low Pay Commission report makes absolutely no reference whatsoever to a possible deferral of the recommended increase in the event of a no-deal Brexit." In short, there has not been a no-deal Brexit and the attempt to blame Brexit or the Low Pay Commission for the Government's heartless decision simply will not wash with people. Fine Gael and Fianna Fáil are out of touch when even the Tories in London who supporting a living wage.
Sinn Féin has made its position crystal clear on the living wage. We want it. When we are in government, we will introduce it. I have no doubt some Members tonight will say a living wage cannot be introduced because it will result in business closures and job losses. Again, this is simply not true.
In our plan for introducing a living wage, Sinn Féin has set out how it would include legal protections for businesses which genuinely could not afford to pay the living wage. If a business can open its books for inspection at the Labour Court and prove it cannot afford to introduce a living wage without it resulting in job losses or cuts in hours, then it could be granted an exemption. It would then revert back to its normal pay with the minimum wage remaining the absolute floor. This would ensure those businesses which may have small profit margins are able to stay in business and continue to employ the workers they have.
It would also ensure that those profitable businesses which can pay their workers a living wage do so. Instead of assuming all businesses cannot pay the living wage, we will assume all businesses can pay it and grant exemptions to those which can prove otherwise.
The Minister and her party have got this wrong. They should not have shelved an increase in the minimum wage and tried to blame it on Brexit. The Government has insulted thousands of workers in the process and its decision will make their lives more difficult. There has been huge stress since the non-announcement by the Minister for Finance and the Taoiseach, on budget day and the following day, respectively. I hope the Government recognises this mistake and reverses its bad decision.
Sinn Féin is proud to stand for ordinary hard-working people. Sinn Féin is the party of the living wage and in government, we will deliver a living wage for workers.
I am delighted to have the opportunity to speak to this motion at a time when workers in Ireland have never needed a living wage more and yet the Fine Gael and Fianna Fáil - whose Members are noticeable in their absence - response to this reality is to say "No" to an increase in the minimum wage and "No" to a living wage for these workers.
Only two weeks ago, our absent Fianna Fáil friends brought childcare workers - early years educators - into the audiovisual room to outline the many reasons these professionals in the childcare sector need a living wage. Fianna Fáil did not secure an increase in the minimum wage for these workers, let alone a living wage. Not for the first time, Fianna Fáil has failed to deliver for workers. It is, of course, the party that cut the minimum wage when workers in this State were on their knees. Now, even in a time of supposed economic growth, Fianna Fáil is failing workers again.
In response to this motion, the Government will tell us, as it has done previously, that Ireland has the second highest minimum wage in Europe. That is a fact but what about the fact that Ireland has the highest childcare costs in Europe? Dublin is now the fifth most expensive city in which to rent in Europe. Drivers and householders pay some of the highest insurance premiums anywhere in Europe. Ireland is the most expensive country out of the 28 nations in the EU in which to run a household. In fact, a EUROSTAT report released in June shows that the cost of living in Ireland and paying for household costs such as rent, water, gas, electricity and maintenance is almost 57% higher than the EU average. When one puts all of that together, the minimum wage being the second highest in Europe means nothing.
Last year in its poverty focus report, Social Justice Ireland found that more than 100,000 people with jobs live in poverty. There is something wrong when being in employment condemns a person to live in poverty. Of course, these are the people who get up early. The Taoiseach likes to tell citizens on a regular basis to get up, get out to work and it will lead to a better lifestyle but these people are living in poverty. In a way, the Government facilitates this because as of last month, there were 52,074 people in receipt of the working family payment. The Government spent an estimated €430 million in 2018 in topping up poor wages to try to prevent in-work poverty. If these workers were receiving the living wage, this wage top-up from the State would no longer be required. Instead of supplementing poor wages for workers, the Government should be dealing with the issue, that is, the inadequacy of the minimum wage, which does not protect those who get up early in the morning and go out to work.
This feeds into the already worrying attitude of the Government when it comes to workers in this State. It does not want to give them a measly 30 cent increase in the minimum wage. That was outlined quite clearly by the Minister, Deputy Regina Doherty, last week although it has been contradicted this afternoon by the Taoiseach, who completely undermined the Minister's position and contradicted the Government amendment to this motion. While the Taoiseach has stated it will be rolled out in January, the Minister's amendment states no clear timeline whatsoever. The Government is all over the place on that.
The Minister does not want to pay these people a living wage. The Minister does not want to give them a legal entitlement to the tips that they earn. When it comes to recouping money owed to the State, the Minister chooses to go after those who rely on social welfare supports - older people, people with a disability and jobseekers - rather than big business, which uses bogus self-employment tactics to avoid paying PRSI. That is what Fine Gael offers workers.
I am proud to be part of a political party that not only represents workers, but in government will pay them a living wage, something that they thoroughly deserve.
The Government's decision not to increase the national minimum wage in budget 2020 was a slap in the face to the 137,000 workers who currently earn the minimum wage. Sinn Féin has long called for progression to a full living wage but the Government's priorities are clear; it does not care about low-paid workers.
Sinn Féin has shown how a living wage could be introduced while also protecting financially vulnerable businesses. Anti-worker propaganda from Fine Gael will not change the facts and to add insult to injury, Fine Gael will use Brexit as a smoke screen to deny minimum wage workers a 30 cent increase.
People who work full time week in and week out should not be on the border of poverty because of the Government's inaction. The same inaction means the Government is forcing workers to rely on the family working payment at a tremendous cost to the State. Is this the financial prudence about which the Government is so fond of spouting out? I do not think so.
The Government might be happy to dangle an increase in the minimum wage in front of workers but an increase on the never-never will not help workers who are financially crucified by the increase in rent costs, astronomical childcare costs and an insurance industry that has completely lost the run of itself. These workers cannot wait for the good grace of the Government, because they will be left waiting.
Sinn Féin is on the side of workers. Sinn Féin wants workers to have the decent quality of life they are working hard to achieve. If any party in this House makes out that it supports workers' rights, it should support this motion tonight.
Let me start by saying it is disgraceful how the Government has used Brexit to block a rise in the minimum wage. We are talking about 30 cent an hour. At the same time, it managed to raise the carbon tax and did nothing to tackle rents or the cost of living.
We have a government that looks after the wealthy and continues to hand out tax breaks to the well-connected. There is this thing the Government always does, whereby it likes to keep people at the bottom. In the budget, the Government had an opportunity to do something about it but did not because that is its mentality.
It is called a living wage for a reason, because you have to live off that wage; not that anyone on the Government side would know about that, understand it or have any compassion for it whatsoever. They even tried to block the National Minimum Wage (Protection of Employee Tips) Bill 2017, which was designed to make sure that workers actually get their tips. For Fine Gael, that was a step too far until the Minister was embarrassed into drafting her own heads of Bill.
What did she offer up in committee last week? She tried to pass off a few notes from the Restaurants Association of Ireland as some great progressive move.
I believe in paying people a decent wage for a decent day's work. Today, that means paying people, at a minimum, €12.30 per hour. Nobody should have any concerns about workers having a living wage. How can we stand over a situation where workers do not have the ability to meet basic needs? That is neither fair nor sustainable.
What is it about a living wage that scares Fine Gael so much? All full-time work should provide an income to enable people to afford a socially acceptable standard of living and pay their bills at the end of the week. The living wage is a figure that tells them they should be able to afford the essentials of life. That is all people ask.
Nobody should work 40 hours a week and be unable to pay bills, afford somewhere to live or to go to the doctor if he or she is ill. It is incredible that there are still Members who believe it is acceptable for that to be the case. Shame on them.
I very much welcome the opportunity to speak to the motion. I am interested to hear from the Government what could possibly be its arguments against a living wage. A living wage prevents in-work poverty. Will the Minister say that she is pro in-work poverty or that she is a cheerleader for it? Is it that she does not know people who work all the hours God sends and still go to bed every night worried that the car might break down or that they might need to go to the doctor? Is it that she does not interact with them? I have those people in my family. I know them very well. I see those people every day in my offices. They are not afraid to come and talk to Sinn Féin because they know Sinn Féin is a party that will stand with them and use every opportunity to stand up for them.
If it is not the case that the Minister is pro in-work poverty, I fail to understand the argument she makes against a living wage. When Fianna Fáil cut the minimum wage for workers, it did not create a single job. It did not contribute to any economic recovery. In fact, it just made poor people even poorer. It made people much worse off.
Anyone watching this debate knows well who is on their side. They know well who will stand up for them. I am very proud to be a member of a party that supports the living wage and is very much opposed to in-work poverty because that is what this is; the living wage is the minimum. It is what people need to simply live and not just exist. It is what is needed to ensure people do not go to bed at night worried that their car will break down, that they may need to visit the doctor or that they will have a small out-of-pocket expense. The living wage prevents in-work poverty. I would love to hear the arguments in favour of in-work poverty.
We are in a privileged position in that we represent the people who sent us here. All of us have to be conscious of who exactly sent us here - people on different levels of incomes, including the 140,000 people who are currently on the minimum wage. While we have a responsibility in this Chamber, we are also people - not all of us because some of us did not take it - who received three pay increases in the past two years. Let us imagine that for a second. Deputies had three pay increases in the past two years. We are saying to the lowest paid workers in the State that because of Brexit, they must wait for the 30 cent an hour increase that the Low Pay Commission said they should get. That is extraordinary.
People outside this House look at politics at times and the fairness of decisions a Government will make. How is it fair to tell the lowest income workers in the State that they must wait? Many people in this State earn a great deal of money. We, in Sinn Féin, want some of those to pay a little more tax because they happen to earn hundreds of thousands of euro a year. The Government said, "No", to that but it has no problem whatsoever saying to those on a minimum wage that they must wait.
Deputy O'Reilly talked about what the living wage is, and she is right. The living wage is designed and calculated to work out what an individual needs to pay for their basic needs after a week's work. It is not two holidays a year, or even one holiday. It is not that they would have a comfortable lifestyle at the end of it. It is that they would have enough money to pay for the lighting in their homes, food, medicines and the basic essentials. That is what the living wage does yet the Government is not minded to support it, nor is Fianna Fáil, which, on many other issues, speaks from both sides of its mouth. The business lobby will come in. Fianna Fáil will fall into line. I am sure the lobby from some of the business organisations was behind the Government decision to defer paying the increase in the minimum wage.
For once, how about Fine Gael not being in the pockets of vested interests and elites? For once, how about Fine Gael representing people who are on the margins? They are people who also get up early in the morning and work hard doing difficult jobs that many other people would not do. They get the minimum wage but they have been told that they should not get a living wage or the increase in the minimum wage.
Sinn Féin is a party that proudly supports the living wage because it is about dignity and treating these people with the respect they deserve, which is sadly lacking when it comes to both Fine Gael and Fianna Fáil on this issue.
I move amendment No. 4:
To delete all words after “Dáil Éireann:” and substitute the following:
— for 2020, the Low Pay Commission made its recommendations on the basis of current economic data and the assumption of an orderly transition for the exit of the United Kingdom from the European Union, and recommended that the rate of the national minimum wage for an experienced adult worker be fixed at a rate of €10.10 per hour;
— the Commission made its recommendations on the basis of an orderly Brexit and acknowledged that the Government may wish to review this recommendation in the event of a disorderly Brexit; and
— the Government has accepted the recommendations of the Commission in their entirety; however, given that the terms of Brexit are not yet finalised, the Government has decided that a decision on the date of implementation will be made when the outcome of the Brexit negotiations becomes clearer.”.
I am pleased to have the opportunity to respond to the motion on Sinn Féin's idea to introduce a living wage but first, and most important, it is essential to clarify that the concept of the living wage is a theoretical estimate made by a number of non-governmental organisations, NGOs, and academics who comprise a self-appointed living wage technical group. It is based on research identifying the income required for the minimum essential standard of living for a single-adult household in Ireland, conducted by the Vincentian Partnership for Social Justice.
It is important that Ireland's statutory national minimum wage and the living wage concept are not conflated or mixed up. 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 sufficient to meet an individual's basic needs, such as housing, food, clothing, transport and healthcare. As a voluntary initiative, the living wage has no legislative basis and confers no statutory entitlements to anybody.
The national minimum wage, on the other hand, has a legislative basis and confers a statutory entitlement on employees, and a statutory obligation on employers. The national minimum wage is a legally-binding lowest average hourly rate that can be paid by an employer to an employee. The 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 workers, with some minor exceptions.
When we add to the minimum wage the other social transfers available in the State that are paid to lower-paid workers, whether it is family income support, FIS, back to school allowances, fuel allowances, dependent child allowances and others, the amount provided to those many in need would meet, if not exceed, the living wage as suggested by the commission.
It is important to highlight that since the establishment of the Low Pay Commission, the Government has accepted all of the recommendations it has made on the national minimum wage. Since 2015, therefore, the national minimum wage has increased by 13.3%. The most recent figures published by EUROSTAT for January 2019 show that Ireland has the second highest national minimum wage of any country in the EU, currently at €1,656 per month, second only to Luxembourg, at €2,071 per month.
The national minimum wage approach seeks to find a balance between a fair and sustainable rate for low paid workers that will not have significant negative consequences for employers and competitiveness. It can be seen as an evidence-based approach providing a clearly defined minimum hourly rate for employers, giving them the freedom to pay higher rates while concurrently providing a measure of security for low-paid workers. As it is legally enforceable, it provides protection for those workers.
It can be seen as a pragmatic approach providing a clearly defined minimum hourly rate for employers, and giving them the freedom to pay higher rates, while also providing security for low-paid workers. More broadly, the setting of wages is a matter between employers and employees, which takes place in the context of the market, and the Government does not interfere unduly in the process, provided that the national minimum wage is respected and adhered to.
Widespread evidence demonstrates that the minimum wage is a blunt tool for reducing poverty, as many minimum wage earners are located in households higher in the income distribution range. This was found in the recent ESRI report on the impact of the minimum wage on household income distribution. The ESRI found that the national minimum wage has reduced wage inequality but it has done little to impact on the distribution of household incomes. It explained this is because minimum wage workers are often located in households at the higher end of the income distribution range and are typically not primary earners within households.
It is essential, therefore, that other in-work supports are in place for low income families. The Department of Employment Affairs and Social Protection has a number of in-work supports for low income families. The working family payment provides support for employees with families who have low earnings relating to their family size. It is currently paid to more than 54,000 families in respect of some 122,000 children. The average weekly payment made to families is estimated at €135 per week.
In budget 2020, the thresholds for the working family payment were increased by €10 for one to three-child families. The back to work family dividend is another in-work support. That scheme aims to help families move from social welfare into full-time sustainable employment. This helps to increase the incomes of families on low incomes. For example, for a two-child family, the working family payment increases after tax income by more than €137 per week, and this will increase to more than €147 under budget 2020 in January once we pass the social welfare Bill.
Another important in-work support for low income families delivered by my Department is the income disregard on the lone parent-related payments. The effect of this will be to increase the amount lone parents will receive from employment without it reducing their social welfare payments. This enhances the incentive for a lone parent to take up employment. In budget 2020, for the third year in a row, the income disregards for the one-parent family payment and jobseeker's transitional payment increased by €15 to €165 per week. Building on the foundations of developments in these schemes that we have made in recent years, I will continue to provide for a better deal for families, particularly those on low and fixed incomes.
However, it is worth emphasising firmly that the Government has accepted the recommendations of the Low Pay Commission in their entirety and that the minimum wage will be increased by 30 cent to €10.10, as announced in budget 2020. It is important that people wishing to speak on the matter pay full attention to the Low Pay Commission's report and what it had to say. The commission made its recommendations on the basis of an orderly Brexit and acknowledged that the Government may wish to review this recommendation in the event of a disorderly Brexit. Given that the terms of Brexit are not yet finalised, all the Government decided to do last week was to defer the date of the implementation of the commission's recommendation, which it has accepted, and that decision will be made on the outcome of the Brexit negotiations and once that becomes clear. The increase is accepted but the timing at which it will commence has yet to be determined. There is a long way to go between now and 1 January, which is the normal date that it would commence.
The Government supports entirely an approach to the minimum wage that seeks to find a balance between fair and sustainable rate for low paid workers and one that will not have significant negative consequences for employers and competitiveness. It is the job of Government to find the balance between those two competing elements. The Government wishes to continue its approach of setting the national minimum wage through the Low Pay Commission structure. This ensures that the relevant social partners are involved in an evidence-based approach of incrementally increasing the rate.
The aim of the Low Pay Commission is to recommend a national minimum wage that provides an incentive to work. It is set at a rate that is both fair and sustainable and helps as many people as possible, without significantly adversely affecting competitiveness or having a significant negative effect on employment.
I remind Members that the Government committed in the programme for Government to incrementally increase the rate of the minimum wage to €10.50. We have raised it during the past number of years by 13.5% and when this recommendation is implemented, it will nearly be at our stated goal. We are the party that is committed to steadily increasing the minimum wage. I make no excuse for showing some prudence and caution. I genuinely believe the public will understand our decision to await the outcome of the current Brexit developments before setting an implementation date. I commend the Government's amendment to the House.
We have reached the Fianna Fáil slot. I call Deputy Troy.
I wish to share time with Deputies Ó Cuív and Murphy O'Mahony, who might arrive shortly.
That is agreed.
Fianna Fáil has tabled an amendment to the motion. We will not take any lectures from Sinn Féin regarding our commitment to the minimum wage.
The Deputy's party when in government cut the minimum wage. That shows its type of commitment to it.
We are the party that introduced the legislative basis for the minimum wage in 2000 and, more recently, through the confidence and supply agreement in 2019, we ensured the implementation of the restrictive use of the zero-hour contracts. I recall as an Opposition Deputy between 2011 and 2016 when we had little influence and people on the opposite side of the House who had long promised the restrictive use of the zero-hour contracts were able to deliver it when they were in government.
Charles Dickens once said: "Annual income twenty pounds; annual expenditure nineteen [pounds] ... and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds and ... six, result misery."
Increasing the minimum wage or seeking to introduce a living wage alone is not the answer to what is facing many ordinary workers. The Low Pay Commission was established to depoliticise the issue. Its principal function was to bring forward a recommendation to the Minister who must set out a minimum wage that is fair and sustainable, adjusted incrementally over time and progressively increased to assist as many low-paid workers as possible without creating significant adverse consequences for employment or competitiveness.
The Government can, as alluded to by the Minister, accept, reject or amend the recommendation and, in this instance, it has chosen to suspend the implementation of the minimum wage until such time as it sees fit. If the Government has chosen not to increase the minimum wage, what is it doing to ensure it tackles the exorbitant costs of living? Its record on tackling the exorbitant costs of living has been dismal to date. All one need do is consider housing. Rental costs are spiralling and mortgage interest rates are higher than anywhere else in the EU.
That is thanks to Fianna Fáil. The Deputy should not even go there.
No, that is not so. If the Minister and the Government were to accept Deputy Michael McGrath's Bill, we could force a reduction in variable interest rates, something the Government has restricted and failed to adopt.
Some 10,000 people have become homeless during the time this Government has been in office. I was dealing with the case of a man who phoned me from Kinnegad. He is working and has a family but because he is working and in receipt of the working family payment, he is above the income threshold for social housing. He is not getting any assistance through the housing assistance payment, HAP, scheme. He is not entitled to avail of a Rebuilding Ireland mortgage because he was in a previous relationship and had a previous home. We have yet to see the roll-out of the affordable housing scheme, despite it having been committed to in the budget announced 12 months ago, as opposed to last week's. Not one affordable housing scheme has been rolled out anywhere on this island. We were promised a review of the social housing income limits for people who could avail of social housing and go on the social housing lists. I have repeatedly tabled parliamentary questions on this to the Minister for Housing, Planning and Local Government and have been repeatedly told the review is imminent but we have yet to see it.
On childcare, one reason that is preventing so many people from taking up work is that, on average, 27.4% of an Irish person's income is spent on childcare compared to the OECD average of 12.6%. If we are serious about helping families, what the Government should be doing is clearly outlining when it will introduce the increase to the minimum wage and what it is doing to tackle the exorbitant cost of living in this country.
I want to turn to the area of business competitiveness. We must be cognisant of the fact that when a minimum wage is increased or, as Sinn Féin is advocating in this instance, a living wage of €12.30 is introduced, it is not the State but the many small and medium-sized businesses which will have to pick up those costs. It is very hard to force small and medium businesses to pick up the cost of a living wage at a time when the State itself does not ensure that all its employees are in receipt of a living wage. I am thinking of members of the Defence Forces, many of whom are not in receipt of a living wage.
The most recent AIB Brexit sentiment survey from the third quarter of 2019 stated that more than four of every ten Irish firms believe that Brexit is already negatively impacting on business. There has been a total erosion of confidence, which is having a serious effect on business. If we are to have a hard Brexit, and we do not know what type of Brexit we are going to have, there is the potential for an unemployment rise to 5.8% in 2020, to 6.9% in 2021 and by a further 2.2% in 2022.
What we should do is refer the living wage to the Low Pay Commission. To be fair, the Low Pay Commission has depoliticised the area of the minimum wage and, in my opinion, it is best equipped to decide what is the best living wage. We have to look at how a living wage would impact on small and medium enterprises. Sinn Féin talks about ensuring that people have this living wage but if we put some of our SMEs out of business, instead of increasing people's income, we will decimate their income. There are businesses that have huge challenges. For example, the retail sector is on its knees in terms of the erosion of confidence and the competition from online trade, and, quite simply, it is only paying what it can afford to pay.
If we want to understand the cost of doing business in this country, we need only look at commercial rates or the cost of borrowing, which for SMEs in this country is 65% higher than for European counterparts. In January 2019, the cost of borrowing for SMEs in this country was on average 5.7% whereas EA1 and EA2 countries had a cost of borrowing for SMEs of just 2.5%. Rental prices continue to rise, energy prices are higher than anywhere else in the EU and there is a tsunami of public liability insurance costs for SMEs and many are facing potential ruin because they are not able to pay their public liability insurance. I raised this issue last week with the Minister for Business, Enterprise and Innovation. I cited the example of a constituent who is employing 31 people and, in the past 12 months, his public liability insurance has risen from just below €40,000 to €109,000 per year. He is genuinely considering whether it is worthwhile keeping his door open. That is 31 jobs.
While there are many elements of the motion which we support, we have put forward amendments. We believe the living wage should be referred to Low Pay Commission and that the Minister needs to accelerate her efforts to tackle the high cost of living and the high cost of doing business in this country.
I would like to build on the case made by Deputy Troy. There are many ways of helping people and the reality is there is no point in getting the money in if people are paying out an inordinate amount of money unnecessarily. The reality is that the cost of living in this country has gone through the ceiling, particularly for those at the bottom of the scale, that is, those on lower incomes.
When we look at housing, rents are totally out of control. Given the system operated under HAP, once people go over a certain level, they can run into trouble. They cannot get on the HAP scheme because at €25,000 or €26,000, in certain cases, they are just not eligible, whereas, on the other hand, they cannot afford to buy a house because nobody will lend them the money. The Government has made a total mess of housing, in particular for those who depend on public housing or would be clients for affordable housing, if any such thing existed in the State.
The second big problem families face is the inordinate cost of childcare, which must be tackled. If people are earning €150,000 a year, they will complain if they have to pay large sums of money for childcare but they have the means to do it. However, for people on the minimum wage or even just above that, it becomes doubtful whether it is worth their while working because most of their income is going to keep the children in childcare.
We then look at the cost of car insurance, which has gone through the ceiling. Many people have no option but to use a car, particularly when they have children. Whether they are in urban or rural Ireland, that is a reality. Many households, if they have two jobs, require two cars and this is particularly so in those parts of the country where the Government refuses to provide public transport. Again, this is eating up a disproportionate amount of people's income.
We then have the tax code. There was a policy to progressively reduce USC, which was brought in as an emergency measure in emergency times. Moreover, the basic tax credits have been left the same since 2010 or before that. Of course, this means that, at a lower and lower income compared to the norm in society, people face paying tax, and the USC starts once a person's income is over €12,000 a year.
These are all measures the Government could tackle without putting up the cost to the employer. Deputy Troy made a good case about the challenges facing small employers if we start putting up their costs, given all the other costs they face, such as insurance costs. The other way of doing it, of course, is to make a more equal society. There are people who say it is not worth their while working because the cost of childcare is eating up everything and because they have to travel 20 or 30 miles to work. There are those coming into this city who cannot use public transport for one reason or another, and they find the day is inordinately long because they leave their children into a crèche very early in the morning and collect them in the evening, and there are proportionate costs associated with that.
When the Minister looks at the statistics in her own Department, and if she does not know where to find them I will tell her someday, she will find that many people on low incomes tend to leave work because it just does not pay once they have to pay for childcare. They then find that a one-income family on the same income pays a lot more tax than a two-income family if USC is counted as tax as well as PAYE. That is the reality, and the difference between the two salaries added together and one person earning that is quite enormous. One-earner families are therefore totally discriminated against.
There are many things the Minister can do. The status quo is not acceptable. I know where Sinn Féin is trying to go. I do not agree with it because it does not solve the problem. The main problem families in this country face is the cost base of living. Providing more income while still allowing the cost base to spiral for very basic things we all need does not solve the problem; it just moves the goalposts back to where they were initially.
The first thing I will do - it may have been done already - is acknowledge the really valuable contribution workers in this country make to the economy. More than 1 million people are employed in the micro and small business sector, as the Minister will know well. That sector is probably one of the most successful anywhere in the world because of the commitment of workers. Many people who have small businesses with eight, ten, 12, 15 or 20 people working for them will say the co-operation and people often going beyond the call of employment duty are what leads to the success of those businesses. They are a huge factor in the success of the regions.
I think my colleagues have already outlined that whatever pluses come in wages or whatever else to people in this country, they are gone so quickly in other costs. This does not apply only to the employees; it applies to the employers as well. The one area causing massive difficulty in my constituency, and I am sure in my colleagues' constituencies, is insurance for employers, which is rocketing completely out of control. The cost of rental premises is also still a factor. There is no doubt but that all these issues will hit the employer. As my colleagues pointed out, childcare costs have been a factor for quite a number of years. We still have not come up with a satisfactory means of ensuring that people going out to work have the proper backup in childcare terms. The cost of that childcare is an extreme financial weight on so many families. The OECD average cost of childcare represents approximately 12.6% of a family's net income, whereas in Ireland that figure stands at 27.4%, so there is a huge difference there.
The Government is the biggest employer in the country and in many respects could act as a role model in implementing the living wage in the public sector. This would set a broader standard without placing an undue legislative burden on employers struggling to keep costs down. My colleagues have referred to the Low Pay Commission. It would be a good idea to refer the proposal for a living wage to the commission. I repeat that we must tackle the issues causing people a lot of financial strain, namely, housing, childcare, insurance and public transport. We must get those issues right because they affect this whole area.
Fianna Fáil will table an amendment to the motion. We have said before that we are supportive of a living wage, but we must be very careful not to drive small employers, who carry a huge burden, out of the employment market because they are very important, particularly to rural Ireland. I know it is not the Minister's responsibility, but there definitely has not been balanced regional development in my part of the country. If she asks Deputies Troy, Ó Cuív or Penrose about this or goes onto the platforms at Longford, Dromod, Athlone or Roscommon train station, she will see the hundreds upon hundreds of people getting on the trains early in the morning to go to Dublin to work. That is a huge factor in terms of costs and the number of hours people have to be away from their families.
That is my contribution and I am glad to have been able to make it.
It is very timely that we should be discussing the national minimum wage and the living wage. The Labour Party's position is clear and unambiguous: no one working full-time should be living in poverty. The Labour Party supports the living wage and we want to see a genuine living wage become the minimum standard that applies to low-paid workers in Ireland.
While I am speaking on the topic of the minimum wage, I wish to refer to the remarks the Government made on budget day and since then on raising the minimum wage. Just today the Taoiseach said the recommendation of an increase of 30 cent to the minimum wage to €10.10 will proceed in January unless there is a disorderly Brexit. He said withholding the increase is in line with the recommendations of the commission. This is not strictly true and, let us be clear, not compatible with the law governing this area. The commission's recommendations state that the commission acknowledges that in the event of a hard Brexit the Government may need to review the recommended rate. This is not a recommendation to postpone the increase. There is an economic argument to be made that a higher rate might be more appropriate, given the need to boost demand in the economy in the event of an economic downturn. This might well apply to this cohort of 140,000 people, whose standard of living is likely to fall significantly in the event of a hard Brexit, with inflation projected at up to 4%. The suggestion that the Government might hold off deciding on the rate in the event of a hard Brexit is not provided for by law, and I intend to demonstrate this.
The law is clear: the Minister has three months from receipt of the recommendations to make a decision. The recommendations of the Low Pay Commission which have just been published are dated July 2019. It would be interesting to know the precise date on which the Minister received them. She does not have the luxury of taking a wait-and-see attitude towards Brexit. I am outraged, as are my Labour Party colleagues, at the way she has handled the issue of the national minimum wage. It is disgraceful. The Minister can decide to set a contingent minimum wage rise, with the option of changing her decision in the event of a disorderly Brexit, but this is not what the commission recommended. She is therefore obliged to lay a statement before both Houses of the Oireachtas outlining the rationale for her decision.
Economic analysis shows that raising the wages of the lowest-paid does not cost jobs in the economy. There is no evidence to support the Government's threat - and it is a threat - to suspend the increase to the minimum wage. With inflation running at 1.5%, the 30 cent increase will barely match the rising cost of living, which is why it is so important we take the politics out of setting the minimum wage and focus on the evidence. In this regard the work of the living wage technical group, based on research by the Vincentian Partnership for Social Justice on the cost of meeting a minimum essential standard of living, makes a very valuable contribution to our understanding of the cost of living.
I have looked at the legislation in this area. Under minimum wage legislation, the Low Pay Commission must make an annual report to the Minister, who within three months of the date of receipt of the report must either by order declare a new minimum wage in the terms recommended by the commission or in other terms, or decline to make an order. If the Minister declines to make an order, she must publish a statement of her reasons for so doing. It seems that on 9 October the Minister made a short statement on the reasons for declining to make an order declaring the national minimum hourly rate of pay. According to the statement of reasons, the Minister for Employment Affairs and Social Protection has declined to make an order declaring the national minimum hourly rate of pay until the situation in respect of Brexit becomes clearer. The Government amendment to this evening's motion says something different. It states that "the Government has accepted the recommendations of the Commission in their entirety; however, given that the terms of Brexit are not yet finalised, the Government has decided that a decision on the date of implementation will be made when the outcome of the Brexit negotiations becomes clearer". The reality is that the Minister has not just postponed the decision on the date of implementation; she has invoked her statutory power to decline to make any order. To be absolutely clear on this, the legislation gives her three months within which to respond. It does not permit her to postpone a decision beyond that three-month period, so a failure to decide within three months means no decision can be made for another year. The statutory function of the Minister in respect of this report is now spent.
The Minister had a once-off statutory response to make and she made it. She has responded to the report of the Low Pay Commission and declined to make an order, as the Act permits her to do. The result is that not only will the low-paid not get a much-needed pay increase recommended by the Low Pay Commission nor even a smaller increase of 15 cent per hour recommended by employers, as by failing to make any decision, the Minister has lost the power to make any order under the Act for the next year. The Minister must admit what she has done and justify it rather than pretending about what she has done. She has not just postponed an increase in the minimum wage, instead she has cancelled it. There is no room for another order until the commission makes its next annual report. That is the law, which I have read carefully.
Today the living wage is €12.30 per hour, whereas the national minimum wage is €9.80, a whole €2.50 lower. This gap was not as great 20 years ago. When a national minimum wage was introduced in 2000, it gave workers a guarantee they would be able to meet the basic cost of living. In 2000, the minimum wage was set at two thirds of the median average income, a level commonly used as a threshold for poverty. For example, it is used in this way by the European statistics agency, EUROSTAT. The goal of the minimum wage when it was first introduced was clearly to bring full-time workers above the poverty threshold. Unfortunately, this did not last long. In the 2000s the cost of living rose very quickly and although the minimum wage was also increased, it did not keep pace with median incomes. In 2010, the minimum wage was only 44% of the median income, meaning the minimum wage had fallen in value by a third.
The national minimum wage should not be a political football. The State is directed by the Constitution to ensure that citizens, men and women equally, can meet their needs as a result of their occupations. A good job is the best route out of poverty and if we are to build an equal and fair society, we must ensure work remains an attractive option for anyone who wishes to improve his or her circumstances. That is why the Labour Party sought to ensure that the national minimum wage is based on evidence and we were instrumental in passing the National Minimum Wage (Low Pay Commission) Act 2015, which created the Low Pay Commission.
The role of the commission is to consider evidence and to make a recommendation about at what level the minimum wage should be set. This reduces the discretion of the Minister of the day to ignore evidence when setting the minimum wage. The Low Pay Commission is an important mechanism to hold Ministers to account with respect to the national minimum wage and that is why the Labour Party has proposed an amendment to Sinn Féin's motion to include reference to the commission. Specifically, where the original motion ends with a call on the Government to, "introduce a living wage of €12.30 per hour in 2020", the Labour Party amendment calls on the Government to, "instruct the Low Pay Commission to ensure that the national minimum wage becomes a genuine living wage from 2020 onwards". The intent of this amendment is to get the Government to modify the remit of the Low Pay Commission so that it sets a national minimum wage at the level of a living wage now and into the future.
It is important that this motion acknowledges the valuable role of the Low Pay Commission and thereby ensures that all future iterations of the minimum wage are at least set at the level of a living wage, which is currently €12.30 per hour. As the Sinn Féin motion rightly indicates, proportionately more women than men tend to work in jobs paying the minimum wage. Young people are also disproportionately likely to be in low-paid work. However, approximately half of those on a minimum wage are over 24 so it is by no means limited to young people. There are full-time workers who are trying to pay rent and put food on the table based on a minimum wage or €1 or €2 more per hour.
The OECD points out that low pay in Ireland is more frequent than in nearly every other country in Europe. Nearly a quarter of workers in Ireland, or 23%, are low-paid. There are whole sectors of the economy, such as retail, farm work, security and child care, where the great majority of workers are on a rate of low pay that is less than a living wage. There is a growing gap in our country between those with good jobs that pay several times a living wage and those on low pay who cannot meet a basic standard of living despite full-time work. Some small employers may worry that a higher minimum wage will not be affordable but Fianna Fáil has not read the motion.
However, the law allows for any employer to make a declaration if it cannot afford to pay the minimum wage. This rarely, if ever, occurs. We should be clear that if some small employers, like shops located in rural areas, are genuinely unable to meet the specified increase in the minimum wage, the facility exists for them to declare, faithfully and honestly, that they are unable to accede to the direction. They can then be exempted in specified circumstances. If we move towards a genuine living wage, this mechanism might be used more often, and that is what it is there for. Some people might worry that a higher minimum wage might lead to fewer jobs. However, successive economic studies, including by the International Monetary Fund, have concluded that setting higher wages for the very lowest paid in the economy has little or no effect on employment levels across the whole economy. Higher wages for the lowest paid end up spent in the local economy, which is beneficial in terms of creating and sustaining jobs.
Higher minimum wages are not a silver bullet for in-work poverty. We have sought to outlaw zero-hour contracts but there are still many workers who do not have certainty about their hours on a weekly basis or who are working part time because they cannot secure full-time work. As far as the Labour Party is concerned, it should be the goal of the Government and society to attain genuine full employment, which means a full-time job for everyone who is able to work full-time hours, and a level of pay that is sufficient to avoid poverty or deprivation. Everyone working full time should be able to attain a minimum essential standard of living, which should be based on evidence of the cost of essential goods and services and set relative to the median income in society. For these reasons, the Labour Party will support tonight's motion on a living wage and I hope Sinn Féin will reciprocate and support the Labour Party's amendment that includes the role of the Low Pay Commission. It would tie in nicely with the objectives of the motion.
I am sharing our limited time with my two colleagues, Deputies Mick Barry and Paul Murphy. I notice Deputy Penrose was afforded some liberty so I hope the same will be afforded to us.
It is very difficult to interrupt a Deputy in full flight.
I might be difficult as well in that case. I thank Sinn Féin for moving this very useful motion. It is striking that when social welfare recipients have been told to wait because of economic uncertainties and Brexit, we are now hearing the old refrain both from Fianna Fáil and Fine Gael that labour must wait once again as well. If the provisions of the Sinn Féin motion were implemented, it would bring great times for low-paid workers because with an average 40-hour week, they would get an extra €100 into their pockets.
It is interesting that IBEC, the employers' organisation, disagreed with the 30 cent per hour increase suggested by the Low Pay Commission and wanted it reduced to 15 cent per hour. The idea of giving 137,000 of the lowest-paid workers, who are overwhelmingly female and likely to be poorer and from minority backgrounds, any sort of increase seemed to be too much for the Government. It seems it would wreck the economy if cleaners, retail and hospitality workers might have a few extra bob in their pockets. We can compare this with the largesse that the Government displays to the chief executives of multinational corporations. It had no problem granting them a special assignee relief programme, SARP, giving chief executives special continued tax status on their earnings. That is a move costing this State €28 million in forgone tax.
Low-paid workers are overwhelmingly concentrated in the sectors of the economy where profit levels are back to or exceeding the pre-crash boom levels but workers are not being treated in the same way. There is no justification like a fragility in an economy but the bogeyman this time is Brexit. That is the justification for telling workers they cannot even have 15 cent per hour and they are getting absolutely nothing. At the same time, we have the lowest levels of PRSI paid by employers and one of the lowest levels of benefits paid to workers. We do not pay workers for their first three days out sick and our levels of maternity and other benefits are the lowest in Europe. Our safeguards for workers to have the right to join a union are also the weakest in Europe.
At this point I pay tribute to the workers in Delfin English School who are currently striking for a basic right to belong to a union, organise and get paid for the hours they work. That is not even happening. Real and substantive change will occur when workers fight back for their rights rather than waiting for this House to deliver them from on high.
The Minister made play tonight of the fact that the Government is not going to cancel the minimum wage increase in the event of a no-deal Brexit but instead it will defer it. Do not expect any thanks from the lowest-paid workers in this country for that clarification. The decision is pretty much the same as saying the Government will not kick these people with two feet but rather with one instead. There will be no gratitude from the low-paid for that decision.
I note Fianna Fáil's opposition to the motion and the Civil War parties are united in trying to deny low-paid workers a living wage. In reality, a 30 cent per hour increase is completely inadequate. The average rent in Dublin is more than €2,000 per month and in Cork it is nearly €1,400 per month. Approximately 20% of the lowest-paid workers earn less than two thirds of the median wage. The percentage of young workers under 30 with no contract rose from 20% to nearly 35% between 2014 and 2016.
I will be moving an amendment-----
The Deputy's amendment will not be moved until amendment No. 4 is dealt with.
I will speak in support of it.
Of course, although it will not be moved now.
Our amendment proposes that €12.30 would be the national minimum wage and that would be merely a step on the road to a rate of €15 per hour, which is what a real living wage would be in this country. That is what is needed to live, not simply to exist.
I stood on picket lines today with English language teachers at the Delfin English School in Parnell Square. They are fighting for the right to union recognition, decent pay, proper pensions, sick pay and holidays. They work for a company in an industry that can well afford decent rates of pay. The company has net assets of €1.2 million. The English language teaching industry in this State is an €800 million industry and is only set to grow on the basis of Brexit. That is a small example of how decent wages for workers are well affordable by employers who are raking in superprofits in this country.
Ireland is a low-wage, high-profit economy in which 30% of all workers are low paid and in which corporate profits have doubled in the past five years to €10 billion. These two facts are not unrelated; they are completely intertwined.
The Government at this time of low wages and high profits wants to ensure that profits remain high at the cost of workers' wages remaining low. This is at a time when a no-deal Brexit threatens the living standards of ordinary working-class people. The Government's answer is to prepare to shovel money towards corporations, often with no strings attached, at the same time as putting off a minimum wage increase. The Government is also determined to ensure that corporations pay little or no tax on those super profits. Why? It is because the Government represents the interests of those corporations and of the 1%, not the interests of working people.
The only answer to the organised Government-sanctioned greed of the corporations is the organisation of workers into fighting democratic trade unions to fight for increased wages and decent conditions. A part of that is a struggle for a €15 per hour minimum wage, that is, a living wage as a bottom or legally-sanctioned floor for all workers. All workers would gain from that increase.
The trade union movement and workers in this country should take inspiration from the struggle for $15 per hour in the US, which has spread to many different states and has passed the Houses of Congress, admittedly with a 2025 deadline. Socialists played a key role in organising and fighting for that measure. The slogan of the 15 Now campaign was "because the rent cannot wait". The workers throughout this city and country who are facing rents of €2,000 plus, and soaring, could not get a more appropriate slogan as to why we need a struggle for a living minimum wage of €15 per hour in this country now. It is because the rent simply cannot wait.
I wish to reiterate the fact that 137,000 workers reported earning the national minimum wage or less in the fourth quarter of 2018. These were mainly female workers. Half of those earning the national minimum wage are under 24 years of age. Some 110,000 workers are living at risk of poverty throughout the State. A little under half of one-parent families suffer deprivation.
My understanding of the Low Pay Commission report is that it makes no reference whatsoever to a possible deferral of the recommended increase in the national minimum wage in the event of no-Brexit deal. I understand why that argument is being used but it is not acceptable. Legal protections are currently in place for companies that can show they cannot afford to pay the national minimum wage. There is no legal obligation on businesses which can afford to pay their workers a living wage to do so.
The Government has referred to unintended consequences for business, including that they could lose their profits. However, the unintended consequences for workers include inability to pay their rent with rents going up. Others cannot afford to buy their homes. The cost of insurance and the cost of living are going up. Workers are being told that they can wait and that labour can wait. That is what they are being told.
The Minister for Employment Affairs and Social Protection said she makes no excuses for some prudence and caution, as she believes the public will understand the Government decision to await the outcome of current Brexit developments before setting an implementation date. I put it to the Minister of State that the public are not saying that. Rather, they are saying the Government has given breaks to chief executives of multinationals of €28 million in tax foregone. They are saying that the very people who are making this decision have just pocketed a wage increase one month ago. During the past two years, there have been three increases amounting to almost €4.50 per hour in wages for them. The people are not saying that they can accept it or that the Government has to be cautious. The Government is not cautious when it comes to looking after its friends and the wealthy. I can say with my hand on my heart that I have foregone that wage increase over the past three years.
I agree with some speakers in the House that the only way workers can achieve a living wage is by taking action. I salute the English language workers who have taken action in Delfin English School. Tomorrow night, the Unite trade union has organised a hospitality sector meeting. A full-time organiser from that sector has gone around during the past two weeks to almost every restaurant and hotel in this city. The union is holding a meeting tomorrow night calling for Dublin city to be a living wage city. Those involved are calling for people to get organised, to join unions to fight for decent pay and better conditions and to organise against sexual harassment in the workplace. The hospitality sector is a €5 billion sector. It has the highest percentage of minimum wage workers, who are some of the lowest paid and vulnerable workers in the economy.
I welcome this Private Members' motion and I support it. I believe that as activists, we have to get out onto the streets and support workers who are willing to put their heads above the parapet and demand a living wage and proper pay and conditions. That is the way we can support workers and organise with them.
I wish to warmly commend our Sinn Féin colleagues on the motion before the House calling for an immediate increase in the national minimum wage and the introduction of a living wage of at least €12.30 per hour in 2020. A major contribution has been made by low-paid workers to the economy. Often, they are in precarious and difficult employment. It has to be recognised that the adoption of a national living wage will benefit them. I note the Minister in her speech seemed to denigrate the whole concept of a living wage as a theoretical estimate. Actually, the difference between the living wage and the national minimum wage is that the living wage is based on real research in the real economy and the real suffering that families endure, as well as the expenses to which they are subject. I believe the Minister completely misunderstood the whole basis of this debate. She referred to the tiny 30 cent increase per hour in the national minimum wage and said this had been accepted by the Government. However, I searched for the reference in the budget speech. There is no reference whatsoever by the Minister for Finance, Deputy Donohoe, to the national minimum wage in his 34-page speech. It is completely missing. Even a derisory 30 cent per hour increase features nowhere and certainly there is no reference whatsoever to a living wage.
Our colleague, Deputy Shortall, has asked on several occasions in recent days where exactly is the poverty-proofing of budget 2020. Even ten years ago, we would get perhaps two or two and a half pages of a basic attempt to try to look at the impact of the budget on poverty. It is not in this budget at all. It was nowhere in the Minister's speech.
In my submission, along with Independent colleagues, to the Minister for Finance, I called for a €7 minimum increase in all social protection benefits and allowances. That could have been costed at approximately €500 million. Social Justice Ireland asked for a basic €9 per week increase and argued that was especially merited, given the daunting challenges of Brexit and climate change and the fact that we know there will be major impacts on the most vulnerable families and citizens in this country. No matter what happens, we know consumer prices are going to rise. Yet, not alone did the Government not increase the social welfare budget but because of the increase in inflation, the Government actually cut the social protection provision in budget 2020.
As is pointed out in the excellent submission made by Social Justice Ireland on the budget, one in every six people lives on an income that is below the poverty line. Shockingly, they include one in every five children and this in a country that has a per capita GDP figure that is second only to that of Luxembourg. Such statistics are shameful, particularly when one is talking about people who are prepared to get up early to go out to work on a full or part-time basis. Fine Gael and its Government partners in Fianna Fáil have always refused to raise the necessary revenue to address the reality of poverty for so many households. Despite knowing the likely negative impact of Brexit and climate change mitigation measures on the poorest households, they still took no action to move urgently to a national living wage of at least €12.30 per hour, as called for in the motion. It was interesting to read in the lead-up to budget 2020 that even an economist like David McWilliams who had made a glaring misjudgment in his advice to the then Minister for Finance, Brian Lenihan, in 2008 on the bank guarantee was saying a wealth tax was essential, given that 1% of the population owned 27% of the nation's assets and 5% owned almost half of its assets. It is time to start thinking in terms of a wealth tax, but in the interim we must make an immediate move to introduce a national living wage. I commend Sinn Féin for tabling the motion.
I am happy to speak to the motion and compliment its authors. I had better declare that I am an employer and can speak from that perspective also. As I said, I am happy to speak to the motion and salute Sinn Féin for bringing it forward.
Some of the statistics mentioned in the motion are truly disturbing. There is no other way to describe them and I compliment Sinn Féin on its research. According to Social Justice Ireland, for example, 110,000 workers across the State are at risk of poverty. That is a shocking number. When the Taoiseach made his speech on the budget last week in the House, he quoted scripture from the Bible about how he looked after everybody. The budget was a non-event. As Deputy Broughan and others said, there was very little in it for anyone. I normally say it is like snow on a ditch - with the first rays of sunshine, it melts away - but in the case of the budget, the snow did not even land for anybody. It was so meagre. Old age pensioners received nothing, while many other groups got so little.
While we need to make every effort to improve the working and pay conditions of workers, we must not take measures that will indirectly make things worse. That is very important. I do not have a copy of the Minister's speech, but I heard some of what he said while in my office and agree that we must be very careful not to undermine workers and make things more precarious for them. We know from an ESRI study last year that the increase in the national minimum wage had a negative and statistically significant effect on the hours worked by workers on the national minimum wage. Some very big employers are able to manipulate the hours of staff and operate zero-hour contracts. It is very hard to draft legislation to deal with people who want to be devious and abuse workers. According to the ESRI, it was primarily driven by the large hours effect for workers on the national minimum wage on temporary contracts who experienced a weekly reduction of approximately 3.5 hours. Where does one go with this? Workers were worse off after reciving the increase, which was well intentioned.
I am sure the motion is also well intentioned, but we must be very clever in the phrasing used within legislation. We have conflicting data from Eurofound, which has shown that implementing a living wage could play a significant role in offsetting the rise of the level of in-work poverty across the European Union. The data have to be examined. I am tired of saying it must pay a person to go to work. It was great for the Taoiseach to say he was interested in people who got up early in the morning, but there is no point in being up early in the morning and out late at night if one is on a pittance and one's work is not respected. Employers must have respect for their employees. It is a two-way street. Employees will respect their employers if they are respected, but the way some multinationals and conglomerates treat their workers is appalling. We heard so much noise recently about farmers who had been forced onto picket lines to try to get a reasonable and respectful price for their produce. There were threats issued about the loss of jobs and workers were let go in their hundreds. The factories are lamenting the fact that they cannot get some of those workers back. I am talking about ABP in Cahir. They cannot get the workers back because they were paying them disgraceful money for doing very difficult work. Some of the workers found jobs elsewhere and I hope their new employers will hold on to them. I made the point at the time and say again that many small employers will hold onto their employees in good times and bad because they value and respect them. There is mutual respect and, if possible, they will hold onto their employees through short-term difficulties, but that did not happen with the moguls in the meat industry. They were using and abusing, despite the grants they were receiving. When the so-called deal was reached which involved a pitiful increase of eight cent per kilo, Bord Bia was going to pay it. It was coming from the taxpayer, with nothing at all coming from the people in question. It is time we tackled the elephant in the room - the big conglomerates that are taking over the country. They have no respect for workers, legislators or anyone else. All they are interested in is greed, profit, what company they can take over next and how many billions they have in their bank accounts.
As I said, the Eurofound report made it clear that the living wage rate, for a single adult with no dependants, was €11.90 per hour in 2018. That is 25% higher than the statutory minimum wage of €9.55 per hour. The report also suggests that, due to regional differentials in the cost of living, the living wage rate for a single adult with no dependants in Dublin is €14.45 per hour, while for a single adult with one child, it climbs to €17.15. These figures are 37% and 80% higher than the equivalent rates for those living in rural Ireland. There is a double whammy because the cost of living in Dublin is much higher. While public services, including public transport, are available, the cost of living, particularly the cost of housing, is totally abnormal. The Government keeps pumping up Dublin. I include the Minister of State, Deputy Breen, in that. I do not know why the Government cannot encourage IDA Ireland to get companies to invest outside Dublin. It will state it is difficult to get companies to invest in rural Ireland, that they do not want to locate in Limerick, Cork or Galway. They all want to locate in Dublin. It is a time bomb waiting to explode. There are no houses available. The Minister of State can shake his head all he likes-----
That is not true.
When I met the head of IDA Ireland in New York, he told me that himself. IDA Ireland cannot get them to move down the country; they want everything to be in Dublin. That is what the Government is driving.
The motion proposes a living wage of €12.30. Considerable complexity remains in dealing with the issue. It is not simple and the last thing we want to do is to make the situation worse, rather than better, for workers and employers. Ní neart go cur le chéile. Employees who are treated well and respected respond in kind. They will go the extra mile, as will their employer. However, there is a race to bottom with the big moguls in the meat and supermarket industries and even the equine industry. I salute the prowess of Coolmore Stud, but not the way it treats its workers. It gives them the lowest rates of pay, despite the billions it makes in profit. It wants to own the county, if not the country. It has 28,000 acres, a figure which is growing. Fine Gael is supporting it, as are my former colleagues in Fianna Fáil. It is grabbing up holdings. The landlord is back in place and it is to hell or to Connacht once more. No small family farm can compete with Coolmore Stud in buying land. It throws money here and there to GAA, soccer and rugby clubs, which we appreciate, but it is trying to buy silence. We will soon not have school, GAA, soccer or rugby teams. We will have nothing because the flight from the land is appalling. In the olden days when we had landlords and big farmers, they looked after their workers.
The companies to which I refer, such as meat producers, own their employees. If a worker has one little slip up or refuses to honour or obey a rule, he or she is out the door. That is how much such companies care about people.
This is complex legislation. It will not be easy to deal with this issue. While something definitely is needed, we must achieve a balance to ensure small employers can carry on, keep their workers and grow the economy.
I welcome the opportunity to speak on the motion, which I support. I commend Sinn Féin on tabling it. It is appropriate that it has been tabled the week after a budget that will drive more and more families into poverty. Even the ESRI indicated that the budget hit the least well-off hardest.
There is no doubt that Ireland is a low-wage economy with a significant rich-poor divide. The country is awash with money. The financial assets of the wealthiest 10% are €50 billion in excess of those in 2006-07. The country has the fifth-largest number of super-wealthy individuals per capita in the world, ahead of countries such as the USA , the United Kingdom, Germany and Japan, and only behind significant tax havens such as Hong Kong and Switzerland. There are 2,055 of these super-rich individuals in the country, or 421 for every 1 million people. We know from well-worked reports that the wealthiest 10% of individuals own 58.4% of all wealth in the country, the wealthiest 5% own 46.4% and the wealthiest 1% own 27.3%. The Government, which could not increase the minimum wage in the budget, was able to give special tax concessions to multinational executives at a cost of €28 million. There is no wealth tax in this country. The very wealthy do not pay their fair share and never have.
Approximately 760,000 people, or one in six, live below the poverty line in Ireland, the eighth wealthiest country in the world, as do 230,000, or one in five, children. That is a shameful figure. It is shameful that so many young children live below the poverty line. Some 110,000 working families live below the poverty line, while 137,000 workers earn the national minimum wage. Another shocking statistic is that the bottom 10% of income earners pay the same percentage of their income in tax as do the top 10% of income earners. Again, that is shameful.
I wish to draw particular attention to the difficulties families experience in respect of the so-called housing assistance payment scheme. It is an outrageous scheme. Some 37,000 families on it are in a situation whereby they do not have two halfpennies to rub together at the end of the week. They must pay rent to the local authority and a top-up to the landlord. Depending on where one lives, one must pay the landlord between €50 and €150 extra weekly.
In such circumstances, the decision last week by the Government not to increase the minimum wage or provide for a living wage is simply shocking and unacceptable. We have the money. As the economist, David McWilliams wrote in The Irish Times two weeks ago, now is the time for a wealth tax. A reasonable wealth tax of between 0.5% and 5% could bring in income of between €2 billion and €20 billion per annum. The money is there and it should be used to introduce the living wage. The Minister stated that we should not confuse the minimum wage and the living wage but as far as I am concerned, the living wage should be the minimum wage and it should be introduced immediately.
It is a shame that the Government presides over a situation whereby thousands of public sector employees, including members of the Defence Forces, are paid less than the living wage. I also highlight the thousands of early childhood care professionals, each of whom earns less than the living wage and most of whom earn little more than the minimum wage. Some 94% of childcare workers experience difficulty making ends meet and only 9% can cope with unexpected bills. An illness, bereavement, communion or confirmation may send a family on such low rates of pay into meltdown and, often, into the hands of moneylenders. I support the motion and believe the €12.30 per hour living wage should be immediately introduced as the minimum wage and increased quickly to approximately €15 per hour.
Deputy Ellis is sharing time with Deputy Funchion.
The living wage is an effective and powerful weapon in the fight against poverty. Many working people are trapped in an endless struggle of fighting to pay bills, put food on the table and avoid poverty. Low wages can trap people in a poverty cycle that is often too difficult to escape. As rents, bus and train fares and the cost of living increase, it is often the poorest who are hit the hardest. For those on low wages, it is often the case that one has a choice between being able to feed one's family properly, buy one's children clothes for school, provide a lunch for them or avoid a debt crisis. Those are the stark choices for many families I meet every day in my constituency.
Low wages can also lead to the exploitation of workers by unscrupulous employers. It is immoral to take advantage of often desperate individuals and pay them as little as possible. It is equally unjust that workers at the bottom of the pay scale suffer so badly, struggling to put food on the table for their families, while many executives and chief executive officers reward themselves with a disproportionate share of profits or give themselves large bonuses. Such unequal pay distribution leads to social inequality and injustice.
Aside from the issue of morality, there are strong economic benefits to paying workers a living wage. Obviously, it would raise the standard of living of those struggling to make ends meet, but in addition, it would help to stimulate the economy by increasing the spending power of workers. Workers would be able to put more money into the economy through increased consumer spending.
Increased income also means increased Government revenue. It has been observed that when workers are paid a living wage, worker absenteeism decreases and company turnover can increase. When employers treat employees with dignity and respect, they give them a sense of having a stake in the company. This helps companies to realise the potential of their staff, which can increase productivity. Clearly, this is good for the company and for the economy as a whole.
It is shameful that last week's budget made no provision for the introduction of a living wage. Fianna Fáil, which facilitated the budget, wants to run with the hare and chase with the hounds. With one side of its mouth, it called for a living wage in advance of the budget while, with the other, it supported a budget that gave nothing to low-paid workers. Once again, Fianna Fáil has shown its true colours by voting with its partners in government and against our motion. The effect of its position is to give two fingers to workers' rights. Tá sé ceart tacaíocht a thabhairt don Bhille seo agus is éagóir é dul ina choinne.
I pay tribute to my colleagues, Deputies Brady and Quinlivan, for tabling this motion. For as long as I have known Deputy Quinlivan, he has been passionate about this issue. I commend both Deputies. It is hypocritical of the Government to tell us that we are in a recovery and that everything is going to be okay because there is almost full employment, while then speaking about the need to be cautious and careful when the lowest-paid workers look for a tiny increase. The Government's attitude is that there is no way it will allow such an increase to happen. The reality is that the living wage gives people a quality of life.
I would like to explain the impact on a person's life of the serious struggle associated with being on the minimum wage or not earning a living wage. If someone is unable to heat his or her home, or is not eating the correct food or skipping meals, it will have an impact on his or her health. The stress and worry involved in struggling to pay for anything to do with children, such as schooling, will have an impact on the mental health of the person involved. We have many debates on mental health issues in this House, but when there is an opportunity to take practical measures to address such matters, the Government and Fianna Fáil seem reluctant to take action. I note that no Fianna Fáil Deputy has been present in the Chamber for the past hour of this debate.
I am aware that time is against me. I will conclude by mentioning that most of those who fall into this category are women. Most single parents, most people in low-paid jobs and most people of pension age who are on low pensions, or no pension at all, are women. They are often forced to make certain choices because of the cost of childcare, etc. I was delighted Deputy Healy mentioned workers in the childcare and early years sector, who are some of the lowest-paid in the economy. They often have to sign on over Christmas and during the summer because they do not get paid. They have some of the worst terms and conditions, even though they are doing one of the most valuable jobs in our society, if not the most valuable. We need to start rewarding them.
I support the motion. I commend my colleagues on its introduction. If we are serious about dealing with poverty and inequality, we must deal with workers' rights. This means ensuring workers have a proper wage that provides them with a good basic standard of living. That is not too much to ask for. That is why Sinn Féin is calling for the introduction of a living wage of €12.30 an hour. One in five workers living in rented accommodation spends more than half of his or her wages on rent. This is creating another layer of poverty. Workers in rural areas, who have no option other than to drive ten, 20 or 30 miles to work in the nearest large town, have to contend with sky-high motor insurance costs. They have no other means of transport and no other way of getting around. That is the situation they are in. There is great pressure on workers.
At a time when the top 10% of earners in Ireland are in receipt of one third of all income and the top 1% own 27% of all the wealth in the State, approximately 760,000 people, 230,000 of whom are children, are living in poverty. That is a staggering level of inequality. In my constituency of Laois-Offaly, many workers in the hospitality sector and beef plants take home less than €400 a week. In some cases, they take home less than €300 a week. How can somebody be expected to survive on that, let alone have a decent standard of living? Workers in the beef factories are to the pin of their collars. The owners - Larry maith an fear and others - made profits of €170 million last year. ABP can certainly afford to pay the living wage, and a lot more with it. The same can be said of many other employers. A few years ago, a meat factory in Rathdowney cleared out all of its workers and brought in new workers on the minimum wage. This is an example of the race to the bottom.
While we recognise that circumstances have to change, we appreciate that some smaller businesses will be genuinely unable to afford to increase wages immediately. There must be a clause in legislation to exempt such employers and small businesses from this requirement. We have provided for that in our motion. Many large businesses, including large hotels, food processors and companies in the beef industry, are taking advantage and exploiting Irish and foreign workers. We cannot stand for this any longer. We have a responsibility to legislate for the living wage. We need to close the gap by giving workers a proper week's wages. It is time for ordinary workers to get a proper wage for their work. Lest we forget, one of the final acts of the most recent Fianna Fáil Government was to cut €39 a week from the minimum wage. That did not benefit the Government of the day. It was obvious that a strong IBEC lobby was an influencing factor in this regard. This attitude needs to change. It is unsurprising that Fianna Fáil is not giving its full support to the motion we are proposing tonight. We are pushing ahead with it because we believe it is a basic requirement if ordinary workers are to be protected. I refer to men and women who are working hard in this State. I am sure the Taoiseach was referring to them when he spoke about people who get up early every morning. We are talking about them in this motion.
I am pleased to respond to the motion. As the Minister stated, the living wage is an estimate made by a number of representatives of NGOs and academics who comprise the self-appointed living wage technical group. It is based on research that identifies the income required for the minimum essential standard of living for a single-adult household in Ireland.
It is important that Ireland's statutory national minimum wage and the living wage concept are not conflated or mixed up. The living wage is a voluntary societal initiative that centres on the social, business and economic case for ensuring that whenever it can be afforded, employers pay a rate of pay that provides an income sufficient to meet an individual's basic needs, such as housing, food, clothing, transport and healthcare. It is important to emphasise the affordability element of the concept. As a voluntary initiative, the living wage has no legislative basis and confers no statutory entitlements. The national minimum wage, which has a legislative basis, confers a statutory entitlement on employees and a statutory obligation on employers. The national minimum wage is the legally binding lowest average hourly rate that can be paid by an employer to an employee. The rate is set out 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.
Since the establishment of the Low Pay Commission, the Government has accepted all of the recommendations it has made in respect of the national minimum wage. Since 2015, the national minimum wage has increased by 13.3%. The most recent figures published by EUROSTAT, which relate to January 2019, show that Ireland has the second highest national minimum wage of any country in the EU at €1,656.20 per month. As the Minister stated, the only country with a higher minimum wage is Luxembourg, where the minimum wage is €2,071 per month. For comparison purposes, EUROSTAT converts countries' hourly or weekly rates into monthly rates. Allowing for purchasing power standards, Ireland drops to sixth place but remains in the group with the highest minimum wage rates in the EU.
It should never be forgotten that the Department of Employment Affairs and Social Protection has a number of in-work supports for low-income families. The working family payment provides support to employees with families with low earnings in accordance with the size of each family. It is currently paid to more than 54,000 families in respect of more than 122,000 children. In budget 2020, the thresholds for the working family payment were increased by €10 for families of one to three children. The back-to-work family dividend is another in-work support. This scheme aims to help families to move from social welfare into employment.
This helps to increase the income of families on low incomes. For example, for a family with two children the working family payment increases after-tax income by over €137 per week and this will increase to over €147 under budget 2020 in January.
Another important in-work support for low-income families delivered by the Department of Employment Affairs and Social Protection is the income disregard on lone parent-related payments. In budget 2020 the income disregards on one-parent family payment and jobseeker's transitional payment increased by €15 to €165 per week.
Social transfers play a crucial role in alleviating poverty and inequality, and they have reduced the at-risk-of-poverty rate for children from 40.5% to just 18.9%. This has had a poverty reduction effect of 53.3%. Ireland is consistently among the best in the EU for reducing poverty through social transfers. We are well above the EU average of 39%.
Again, as part of budget 2020 the Government accepted the recommendations of the Low Pay Commission that the minimum wage be increased by 30 cent to €10.10. As the House knows, the commission made its recommendations on the basis of an orderly Brexit. The Government has accepted the recommendations of the commission. However, given that the terms of Brexit have not yet been finalised, the Government has decided that a decision on the date of implementation will be made on the outcome of the budget negotiations as they become clearer. I hope they will become clearer in the very near future and that the 30 cent recommendation from the low pay commission is implemented.
I respect the commission. In a previous job as a Minister of State, I had responsibility for the Low Pay Commission. It is an independent body which carries out in-depth analysis of the minimum wage and the areas affected by it. I remember during my time it went to the Border region. It is made up of academics and trade union and business representatives. It is an important group which is independent of Government. I commend the Government's amendment to the motion to the House.
I have been in the Dáil for three years and have listened to some waffle in my time. Unfortunately, the Minister of State, Deputy Breen, beat Banagher with his contribution, which he copied and pasted from the contribution of the Minister, Deputy Doherty, earlier. The least he could do is dignify his response with an original contribution. The Official Report of the Dáil will confirm what I have said. If that is how he wants to treat the Opposition and deal with a serious issue like a minimum and living wage, that is his decision. He has read the same speech as the Minister.
It is important to reinforce the truth.
The Minister of State read the same speech twice. The Official Report will confirm what I have said.
The aim of our motion is simple, that is, to stand up for ordinary low-paid workers. They are hard-working people who struggle to get by month-to-month. Sinn Féin is proud to stand up for these people and will continue to fight for better pay and conditions for workers. I cannot accept the Government's arguments that this is not about Brexit. This was a political choice, and the wrong choice at that. Earlier today the Taoiseach told the Dáil that the change would come in January, but the Government's amendment states that the Government decided that a decision on the date of implementation would be made when the outcome of Brexit negotiations become clear. Which is it? It is very vague; both statements cannot be true.
As I said at the start of the debate, legal protections already exist to support businesses which find themselves in difficult financial situations, and this will be the case in a no-deal Brexit scenario. Job losses and business closures are a total red herring. Section 41 of the Minimum Wage Act 2000 provides legal protection for businesses. The Minister of State should familiarise himself with the legislation and the protection it provides. Of course, Fine Gael found the cash needed to line the pockets of very wealthy executives with the extension of the special assignee relief programme, SARP, because when it comes to the wealthy it is always there for them.
Fianna Fáil Deputies have unfortunately left the building. Their opposition to our motion is very unfortunate and their amendment is confusing. Their contributions were pathetic. They clearly did not read the motion. I am confused as to why they think workers in the public service deserve a living wage but those in the private sector do not. Why would they differentiate between workers? Rent is not cheaper for those working in the private sector compared to the public sector. It is a bizarre approach.
Two weeks ago, in classic Fianna Fáil fashion, Deputy Eugene Murphy hosted a SIPTU briefing in the AV room calling for a living wage for early years educators. In its amendment to the motion, Fianna Fáil called for a living wage to be referred to the Low Pay Commission. Did it mention this policy shift to Big Start and SIPTU or is it hoping they will not hear about it at all? That sort of Fianna Fáil politics needs to be called out. I am glad it had the opportunity to put its money where its mouth is and let low-paid workers know it does not represent their interests. We will not support the Fianna Fáil amendment.
On the points made by the Labour Party and Solidarity, I am glad to hear their support for the living wage. It is important this motion gets as much support as possible. Unfortunately, we cannot accept the Labour Party's amendment. We do not intend to undermine the Low Pay Commission. In our vision for introducing a living wage the Low Pay Commission will continue in its current form and will continue to set the minimum wage, which would remain the absolute floor for those businesses granted an exemption. However, I am not confident that the living wage can be achieved under the current Low Pay Commission. We believe direct Government action is needed to increase wages for those on low pay and remove them from the threat of living at the risk of poverty.
Such is the urgency of the matter that we believe direct Government action is the best approach. In terms of Solidarity's point, we support the work of the living wage technical group and the rate it has calculated of €12.30 per hour for the time being.
In her contribution the Minister, Deputy Doherty, made a long speech, quite a bit of which was copied by the Minister of State, Deputy Breen, but left out one line at the end of her script. It stated that, "Unlike Fianna Fáil we are not reckless in our approach and won't be creating a situation where we have to actually cut the minimum wage as they previously did". I wonder why she left that line out.
Low-paid workers have waited long enough to be given a break. It is not acceptable that workers in 2019 are living hand to mouth from month to month and this needs to be addressed as a matter of urgency. The current minimum wage is not fit for purpose and we need a living wage across the island. In government Sinn Féin would deliver a living wage for all workers.
In accordance with Standing Order 70(2), the division is postponed until the weekly division time on Thursday, 17 October 2019.