Mr. Seamus Coffey:

In regard to those sectors in which the wage share is close to the EU average, I would note that they are aggregates. One would have to look in a bit more detail at the numbers to see how it is actually distributed. I highlighted those because I think they are the sectors with which low pay would tend to be traditionally associated.

In regard to a broader solution, the solution is to get the social welfare and the work systems more integrated. Currently, they are disparate and one works in isolation from the other. If one is working, one is dealing with the tax system and if one is not working, one is dealing, by and large, with the social welfare system. They should be more integrated. If we have benefits, they should be universal. We should treat everybody in the same way. That might require higher rates of tax but it would not necessarily mean people will be worse off. If there is a basic minimum standard set out and it is paid to me, then I should be taxed more. I should not be better off. However, that would mean that nobody would ever be worse off by working. One should never lose anything by contributing to society. A system where one has generous social welfare is laudable, and that is what we should have, but it should not be designed in such a way that people lose it when they start to contribute to society.

I would encourage more universality in transfers. We could increase child benefit and maybe introduce something similar for adults. One would not have people fighting for their own corner and all these separate groups looking for what they want. If we have a social democracy and treat everybody in the same way, as happens in many countries, one would not get those divisions.

I would not view the minimum wage as the key issue about how one lifts people out of poverty. Work matters but the State should take a much stronger approach than it takes currently and offer more on the basis of social welfare. People say our social welfare budget is high but relative to the EU, it is not. Other countries spend far more in terms of cash transfers. They collect it through higher tax and higher social insurance and I believe we can achieve something like that.

We have a divided society, a very progressive tax system and a very divided social welfare system in which one group is contributing and another is benefiting. If we were all in this together, the system would work much better.