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Living Wage

Dáil Éireann Debate, Wednesday - 15 September 2021

Wednesday, 15 September 2021

Ceisteanna (48)

Louise O'Reilly

Ceist:

48. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans for the introduction of a living wage as committed to in the programme for Government. [43778/21]

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Freagraí ó Béal (6 píosaí cainte)

I raised the issue of the introduction of a living wage with the Tánaiste a number of times prior to the recess. In previous exchanges, the Tánaiste mentioned that the improvement of workers' conditions has been a priority. As such, I would like to know how this priority is progressing. Can the Tánaiste provide us with a timeframe of when the Low Pay Commission review will be completed? It has been subcontracted and tasked with reporting back with some idea of the living wage.

The programme for Government makes the commitment to "progress to a living wage over the lifetime of the Government". I have spoken before about how the pandemic has caused many of us to reconsider and re-evaluate what an essential worker is. We now understand that it is a much broader group of workers than people would have originally described, many of whom are on low pay and in the private sector. The Government has been clear in our belief that a legacy of the pandemic must be better pay, terms and conditions for everyone, but particularly for those on low pay. We are committed, therefore, to honouring the Government commitment to progressing to a living wage over the lifetime of this Government. In doing so, we need to recognise that many businesses have been badly affected by the pandemic and are struggling to pay existing wages. We need to make sure that we proceed in a way that does not cause jobs to be lost in terms of the numbers of people employed, or would see employees having their hours cut. To do so would be counterproductive.

Earlier this year I asked the Low Pay Commission to examine the programme for Government commitment and to make recommendations on the best approach. The commission is currently undertaking research on the topic and the terms of reference for this research were noted by Cabinet earlier this year. The report will consider the policy, social and economic implications of a move to a living wage and the process by which Ireland could progress towards it. It will do this by looking at international evidence on living wages, examining different calculation methods, examining the policy implications and outlining options for moving to a living wage in Ireland. The findings and recommendations in the commission's report, which I expect to receive before the end of the year, will inform Government on the best practical approach to proceed.

While the living wage initiative is being considered, the Government will be guided by the recommendations of the Low Pay Commission with regard to any future changes to the existing national minimum wage. The national minimum wage seeks to find the balance between a fair and sustainable rate for low-paid workers and one that does not have significant negative consequences in terms of employment and competitiveness.

As the Tánaiste is aware, I have expressed my scepticism already in respect of the Low Pay Commission and my concern that it will come back with too low a figure. It has previous on this with the national minimum wage, when it came back with figures that would have been described at the time as desultory, paltry and pathetic. It does not give me huge confidence if we are leaving the matter with the commission.

For many of our low-paid workers, the introduction of a living wage could be the difference between poverty and a minimum standard of living. The Tánaiste will be aware that a motion on a living wage that I introduced in November 2019 in the Thirty-second Dáil was passed. A living wage is vitally important to those workers on low wages and I believe it will be an important tool in ensuring that people remain in jobs that they would otherwise aspire to leave. Some of them know that they cannot stay in those jobs on the wages they are on. I urge the Tánaiste to use his influence to ensure that a real living wage is introduced in the quickest possible timeframe - a living wage that is decent and fair, and protects workers and businesses.

I do not expect the Low Pay Commission to come back to us with the rate of the living wage. I expect it will come back to us with a method by which the rate can be calculated on an annual basis. Perhaps that is the same thing, but it is an important point nonetheless. There are two ways of calculating it. It can be calculated as a percentage of median wages, for example, 50%, 60% or 65%, and there are different arguments as to which figure should be chosen; or it can be calculated based on what is called a minimum essential standard of living based on a basket of goods and services that people need to be able to afford to get by. Then there is a debate about what should be in the basket or not. That is the kind of work that is being done by the commission at the moment. It is giving us advice on which method to go for and why.

I think the Low Pay Commission is a good body. It is a body that was established under the Fine Gael-Labour Party Government. It does it the right way. There is an equal number of employer and employee representatives on the commission, and there are a number of people who are independent figures who are not part of any sectional interest. I know there are some groups that calculate minimum wages, but they exclude employers. I imagine if employers had a group that excluded workers, it would come up with a different rate. Therefore, it is important that we have everybody involved. However, I have no doubt, because it is what happened in the UK, that whatever the living wage is set at there will always be a group of people who will say that it is not enough and they will then look for a real living wage. That is the way it goes.

People will be bitterly disappointed if the commission reports back and the living wage is not €12.30 or more per hour. People have suggested that the living wage should be €12.30 per hour. The reason that we are demanding a living wage in this country is because issues such as the cost of rent, public transport and childcare have not been addressed. Until they are addressed, we are going to be demanding a living wage of €12.30 per hour.

I wish to remind people and businesses that we also need to amend the National Minimum Wage Act 2000, which contained an exception for businesses that could prove that they could not pay the minimum wage. The same thing should be done with the living wage. In fairness, as far as I am aware no company ever used that exemption because they realised they had to pay it and it was the decent thing to do and they wanted to keep their workers. I do not have to tell the Tánaiste, because it is proven, that the more you pay your workers when you can, the better outcomes you will have. It is better for productivity and the economy, and it means that there are fewer State interventions providing for people who are on poverty wages. I look forward to hearing the Tánaiste's response.

There is a group - I forget exactly how it is described - that calculates the living wage at €12.30 per hour. If I remember, it also recommended that there be no increase in it last year. I do not know what the recommendation will be for next year. The group is made up mainly of people from the trade union movement, academics and those from NGOs. They are all worthy and learned people but they have not included in the group any representatives from small business or the employment or business sector, for example. That does affect the legitimacy of that calculation. As the Deputy is aware, one thing we always have to bear in mind is the difference between the minimum wage in Northern Ireland and that in this jurisdiction, and how that can affect Border business and cause businesses in the Border region to lose out, lose business and even lose workers and staff and have to lay them off if the differential between North and South is great. I would encourage the Deputy to use his influence to improve wages in the North if he can.

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