Dáil Éireann Debate, Thursday - 7 April 2022
61. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment his views on delivering a living wage, calculated through the Living Wage Technical Group’s minimum essential standard of living formula, as a way to help workers in the face of the cost-of-living crisis. [18627/22]
Amharc ar fhreagraI have acknowledged the pressures people are feeling as the rate of inflation and the cost of living increases. I know these costs are increasing rapidly and that those on lower incomes are being disproportionately affected.
When considering increases in the National Minimum Wage during a period of inflation Government must be is conscious of the need to avoid second round effects. Pumping more money into the economy could lead to further inflation.
That being said, I have been clear in my commitment to improving pay and terms and conditions for everyone, but particularly for those on low pay.
Last year I asked the Low Pay Commission to examine and make recommendations on the best approach to achieving the Programme for Government commitment to progress to a living wage over the lifetime of the Government.
One of the issues examined by the Low Pay Commission, and the research team commissioned by them to produce a technical research report on the progression to a living wage, was how a living wage should be calculated. The Commission considered whether the Minimum Essential Standard of Living or fixed threshold approach should be recommended. As part of its deliberations, the Low Pay Commission met with a number of stakeholders in this area, including the Living Wage Technical Group.
Last week I received the Commission’s report and recommendations on the progression to a living wage. Along with my officials, I will review the Commission’s recommendations and consider next steps.
While the living wage initiative is being considered, the Government will continue to be guided by the recommendations of the Low Pay Commission with regard to any future changes in the minimum wage. The Low Pay Commission is required to submit its annual recommendation on the National Minimum Wage to me on or before the third Tuesday in July.
Since the establishment of the Low Pay Commission in 2015, the national minimum wage has increased from €8.65 per hour to €10.50 per hour between 2016 and 2022, a 21.4% increase. This compares with an increase in consumer prices of 7% in the 6 years to December 2021. The Minimum Wage has increased substantially in real terms over recent years.
The share of workers on the minimum wage in Ireland has also fallen consistently since the establishment of the Low Pay Commission. The share of workers on the minimum wage or less as a percentage of the total labour force has reduced from 9.3% in Q4, 2016 to 6.8% in Q4, 2020.
The Low Pay Commission is made up of an equal number of employer representatives, employee representatives, and independent members which helps to provide a balanced view when determining an appropriate rate for the National Minimum Wage. In addition, the establishing legislation requires the Low Pay Commission to give consideration to a range of issues when arriving at a recommendation for the appropriate National Minimum Wage rate. These issues include the cost of living, competitiveness and the likely effect that any proposed recommendation will have on future levels of employment.
