Joan Burton (Dublin West, Labour) | Oireachtas source

I am making my calculations. If somebody was to take up a job at €8.65 per hour for a 39 hour week, he or she would receive a gross payment of €338.52. If that person were single, he or she would receive €188 per week on social welfare. The comparison is absolutely clear for a single person. There have been discussions, particularly in Germany, about raising the minimum wage as a way of increasing domestic demand by putting money into the economy through the hands of workers. The critical issue for us is that because ours is relatively high it is very advantageous for a single person, but when one is paid an income, an employer does not take one’s family responsibilities into account. An income of €338 per week for a person with two or three children and a spouse is, relatively speaking, much lower. Family income supplement for a family in that situation with three children would be €225 per week. That would bring total earnings up significantly, to approximately €550 a week, a significant amount in the context of earnings in Ireland.

How, in general, can we raise people’s wages? The critical factor for the economy, particularly for families with one or two adults and in which nobody has meaningful work, is that these children are most at risk of having negative or poor educational and employment outcomes. Economic planning needs several elements such as investment in training and education because, broadly, the higher the level of one’s education, the higher the earning potential when one goes out to work. People on low wages need an adequate social insurance system because even a single person, once he or she has paid tax and the universal social charge, contributions and so on, would not have much left to pay into a pension scheme. As the economy recovers, when employers take on people, they try to decide whether they will add value to their business. The cash flow from the bank may not be very strong, which is why we offer JobsPlus to employers. If they take on someone who has been on the live register for over a year, we offer €300 a week, which is a significant supplement. If the person has a family, he or she may also receive family income supplement. That may allow the employer to pay the person more. It certainly reduces the cost to the employer. We are also preparing in-work statements for people in that situation to show that work has to pay.

The other big poverty trap is met by someone on rent supplement who is living in private rented accommodation. We have done a great deal of work to run the first pilot scheme to transfer the scheme to the local authority in the spring, in Limerick. That is a difficult, challenging job because there are 66 local authority rent schemes, all with different computer systems, different levels of rent payment and so on. The Department of the Environment, Community and Local Government has a big job to do in that respect and is working on it. The aim is to get people back to work. We may subsidise it initially, but as the economy recovers, the demand for labour will drive wages up. Many employers pay above the minimum wage. It is critical for someone starting out to be given enough hours. There really is no argument for single people between getting €188 in social protection and €338, minus a small amount of pay-related social insurance, PRSI, and USC, on the minimum wage.