Tuesday, 11 June 2019

Ceisteanna (856)

Michael Lowry


856. Deputy Michael Lowry asked the Minister for Employment Affairs and Social Protection her views on implementing a living wage; and if she will make a statement on the matter. [23398/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Employment)

Legislation in relation to the setting of the National Minimum Wage has existed since 2000. The Low Pay Commission was established in 2015 and its primary function is, on an annual basis, to examine and make recommendations on the national minimum wage, with a view to providing for adjustments which do not impact negatively on jobs or competitiveness. The Commission thus takes an evidence-based approach to its recommendations, having regard to changes in earnings, productivity, overall competitiveness and the likely impact any adjustment will have on employment and unemployment levels.

Since its establishment the Commission has submitted recommendations on the appropriate rate of the National Minimum Wage for 2016, 2017, 2018 and 2019. The Commission’s recommendations, for increases of 50 cent in 2016, 10 cent in 2017, 30 cent in 2018 and 25 cent in 2019 have all been accepted by Government and represent an increase in the National Minimum Wage of 13.3% since 2015. With effect from 1 January 2019 the current rate of the National Minimum Wage is €9.80 per hour.

The most recent figures published by Eurostat (January 2019) show that Ireland has the second highest national minimum wage of any country in the EU at €1,656.2 per month, behind only Luxembourg whose 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 still remains in the group with the highest minimum wage rates in the EU.

It is important that Ireland’s statutory National Minimum Wage and the Living Wage concept are not conflated. The Living Wage is a voluntary societal initiative centred on the social, business and economic case to ensure that, wherever it can be afforded, employers will pay a rate of pay that provides an income that is sufficient to meet an individual’s basic needs, such as housing, food, clothing, transport and healthcare. As a voluntary initiative, the Living Wage has no legislative basis and confers no statutory entitlement. 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 setting of wages is a matter between employers and employees, which takes place in the context of the market, and Government does not interfere unduly in the process. More broadly, this area also comes within the remit of my colleague the Minister for Business, Enterprise and Innovation, through her Department’s responsibilities for industrial relations issues generally and wage-setting mechanisms such as Registered Employment Agreements (REAs), Joint Labour Committees (JLCs) and Sectoral Employment Orders (SEOs).