Mr. John King:

SIPTU supports the call for an increase in the minimum wage and for the introduction of a living wage. However, a couple of factors must be borne in mind. First, when the minimum wage was first introduced, the then Minister declared that it needed to be maintained at two-thirds of the median wage. It is currently probably less than 50% of the median wage. Had the line proposed by the Minister been held, it would now be between €10.40 and €10.80 per hour. Second, Ireland is one of two EU member states that have not increased their national minimum wage in the past seven or eight years. The only country that has not increased the earnings of the poorest of the poor in its country is Greece.

In terms of impact, people on the current minimum wage are unable to participate in society. It leads to poverty, social deprivation and so on. It also means people cannot provide for their means never mind their wants. It means that a cohort of our people are struggling to survive every week to provide the basic means for themselves and their families. In regard to what would happen if the minimum wage was increased, it should be borne in mind that the minimum wage is not an ideal measure for labour cost competitiveness. In this regard, other things must be factored in, including employer PRSI contribution costs. Ireland has one of the lowest employer PRSI contribution costs. While the minimum wage in some countries might be slightly below or above ours, employer PRSI contributions in those countries are significantly higher. As stated earlier by one of my colleagues, and this is evidenced in various submissions made, there are other structural labour costs that tend to be of more interest to employer groups than the rate of pay.

The issue of under-employment and wage-setting mechanisms is addressed in our submission. The national minimum wage is the minimum threshold of decency that should be extended to all people in this country. However, it deals only with the proposed hourly rate of pay. We believe that the Oireachtas should grapple with the issue of vested interests and employer groups not co-operating with the wage-setting mechanisms, because they enable workers to have some kind of equal bargaining relationship with their employers in setting reasonable hours, overtime rates and minimum sick pay in the event of their falling sick in order that they do not have to rely on State supports and so on.

It is evident that, in most of the European countries, even in countries where there are no national minimum wage rates, workers in sectors of those economies tend to be covered by sectoral collective bargaining agreements. Where employers are refusing to co-operate with Oireachtas policy that workers should be covered by way of sectoral mechanisms, we ask the committee to help find the means by which the Labour Court can be guided to deal with the issue.