Oireachtas Joint and Select Committees

Tuesday, 24 February 2015

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Low Pay and the Living Wage: Discussion

1:30 pm

Photo of David CullinaneDavid Cullinane (Sinn Fein) | Oireachtas source

I welcome Mr. Coffey and Mr. Fielding and thank them for their contributions. We are looking to produce a document on low pay, decent work and a living wage. The starting point for all of us would be a fair economy offering decent pay and decent work. We also want to have a sustainable economy. I argue that a more sustainable economy is one which offers decent work and decent pay.

A total of 20% of the workforce is on low pay, which means 400,000 workers experience poverty and deprivation while 11.7% of the workforce is at risk of poverty and 8.7% is in consistent poverty. The ILCU tracker survey highlighted that almost 200,000 workers, or 11% of working adults, have no disposable income left at the end of the month with 480,000, or 27%, having less than €50 left and another 730,000, or 41%, having less than €100 left. That means low pay, income equality and economic inequality are big problems across the economy. How can they be addressed? It is clear if one looks at the facts that the current model is not working. We need a new model, which is about social solidarity and about everybody, including employers, having a responsibility. I am taken aback by Mr. Fielding's contribution in which he seems to suggest that employers do not have a social responsibility and he referred to confusing the State's role in terms of social responsibility and an employer's role.

He said the minimum wage has not eradicated poverty. Nobody would have argued that the minimum wage alone would eradicate poverty but what was missing from his contribution is the fact that the minimum wage has not increased since 2007. The cost of living has increased with rents increasing to pre-crash levels but the minimum wage has not increased. If it does not keep pace with inflation, it will not eradicate poverty.

The underlying problem is access to public services. Child care, housing and health care are issues that hold people back in terms of in work poverty and so on. Does Mr. Fielding believe that employers have a social responsibility? Will he comment on the fact that Ireland has the third lowest taxation take in Europe and the lowest employer's PRSI take in Europe? We are not taking in enough taxes to pay for public services. If Mr. Fielding is putting it back on the State to take responsibility for and deal with poverty, deprivation and low pay and the problems low paid workers face, where will the money come from? If we accept, given the facts, that the current model does not work, where will the revenue come from? I did not hear an argument from him to increase taxation or employer's PRSI. However, he argued against increasing the minimum wage. He has not proposed an instrument to deal with these issues. I am interested in what he and Mr. Coffey propose in this regard.

While Mr. Coffey's contribution was good and detailed, what practical measures need to be taken to deal with low pay and in work poverty? Does he agree that housing, child care and health care are three critical areas requiring investment, which is necessary to lift people out of poverty? What is his view on a living wage and the minimum wage? What is view on the role of both business and the State in dealing with these issues?

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