Dáil Éireann Debate, Wednesday - 20 July 2016
66. Deputy Bríd Smith asked the Minister for Jobs, Enterprise and Innovation if she is aware of a recent report that describes Ireland as a low wage economy; and if she will make a statement on the matter. [22765/16]
Amharc ar fhreagraI am aware of a Report by Unite the Union which describes Ireland as a low wage economy.
The report relies on the EUROSTAT definition of low pay as ‘earning less than two-thirds of the median wage’. By this measure Ireland has a relatively large proportion of wage earners who would be classified as low paid, ahead of the UK and Portugal. This is confirmed by recent research from Logue and Callan (ESRI, 2016), which indicates that, for Ireland, while the median wage increased between 2005 and 2013, the proportion of low wage employees was broadly stable for 2005, 2008 and 2010 at 20%, although it increased to 23% in 2013.
However, under this EUROSTAT definition, the threshold for low pay is set relative to the level of earnings in an individual country, rather than to the absolute value of the wage itself. Thus, a person earning €10 per hour in a country where the median wages are €16 per hour would be deemed to be low paid, whereas a person earning €8 per hour in a country where the median wages are €12 per hour would not be deemed to be low paid.
Ireland’s mean hourly earnings are, in fact, the second highest in the EU after Denmark (EUROSTAT, 2014). In fact, the mean hourly earnings in 12 of the 21 EU countries for which EUROSTAT provides data are below, and in many cases significantly below, the low pay benchmark for Ireland. In practical terms, for example, an employee in Ireland, where the median earnings are €16.43 per hour (see LPC Report 2016, based on EU SILC data for 2014 – latest available) who earns €10.90 per hour (or €22,100 per year) would be deemed to be low-paid, whereas an employee in a country with median earnings of €12 per hour who earns only €8.10 per hour (or €16,400 per year) would not be considered to be low-paid.
The authors of the ESRI paper point out, also, that Irish wage rates are among the highest in the EU on a purchasing power parity basis (EUROSTAT, 2015). This would appear to be in contradiction with what the Unite report says on this issue.
