Sr. Bernadette MacMahon:

I too wish to say how grateful we are for the opportunity to speak this afternoon to the Oireachtas joint committee. We warmly welcome the establishment of the low pay commission. We are concerned about head 2. The heading of section 11(2) refers to assisting many low-paid workers, but section 12(2) sets out seven areas to which the commission should have regard in making recommendations on the national minimum wage rate. The terms require the commission to have regard to economic, employment and competitive issues, all of which are very important. However, nowhere in section 12(2) are issues of adequacy of the minimum wage rate mentioned or the standard of living the national minimum wage rate enables. Those factors are not specified for consideration. Simply asking if the national minimum wage should be adjusted in line with changes in inflation or median earnings fails to ask the question of whether it is adequate in the first place. It cannot be assumed that it is adequate. We also know that the increases were made in an unsystematic manner.

The Vincentian Partnership for Social Justice has provided expenditure on the cost of a minimum essential standard of living. This is work which meets a person's physical, psychological and social needs at a minimum level of need not wants. We also worked with Trinity College on the establishment of a minimum income standard which helps to calculate the income required for this particular standard of living. The data covers 89% of the working age population. It is evidence based and is very transparent. It enables the assessment of rates of pay regarding adequacy and the degree to which they enable a socially acceptable minimum standard of living. The seven household compositions presented in tables 1 and 2 are representative of the most common compositions in Ireland and it is evident from the tables that all seven face a shortfall in income when reliant on the national minimum wage. The expenditure we are talking about is very stringent and does not involve luxuries. It just respects the dignity of the worker.

The minimum essential standard of living data and the minimum income standard model provide a robust and transparent method for calculating the minimum income of the household types. Members can see that in tables 3 and 4. The living wage method has been developed for calculating the average gross salary needed for a single adult to afford a minimum acceptable standard of living. I was very pleased when I heard this afternoon that the Minister of State said he was going to establish a living wage forum. It is recognised that pay rates alone cannot address the needs of low-paid households with children. More must be done in terms of the provision of an acceptable level of services, for example, the cost of housing and the cost of accessible child care.

Low pay is less than two thirds of the median hourly rate. For example, the most recent EUROSTAT report on low wages found that the low pay threshold for Ireland was €12.20 but when the matter was looked at again in 2013 it worked out at €11.50. The figure of €11.50 is slightly higher than the living wage figure of €11.45. People whose income does not allow them to have an expenditure which meets the cost of a minimum essential standard of living that meets their physical and psychological needs at a minimum level are living in poverty.

It is a matter of concern for many of us that people can work for 37.5 hours a week and yet come home with a wage that does not meet their family’s minimum essential standard of living. It is difficult to see how questions of adequacy of the national minimum wage cannot be part of the remit of the commission. We accept that is not the only consideration. We accept the importance of employment issues, competitiveness issues and economic issues but surely adequacy must also be taken into account.

Workers are not just units of labour. The Minister of State spoke about the dignity of work, but let us speak about the dignity of the worker. The Vincentian Partnership is realistic. We know that all we can do is work for a progressive realisation of a more adequate minimum wage and hopefully, eventually a living wage for everybody in Ireland.