Ms Michelle Murphy:

The first thing we need to point out is that while the increase in the minimum wage is welcome, it remains a significant way off from the living wage. Furthermore, a significant cohort of low-paid people will not benefit from this increase because they are not necessarily on the minimum wage but they are still below the threshold of two thirds of the median income. This increase will not make any difference to them. The fact that the PRSI threshold was not changed also means that the benefit of the increase will not accrue to a proportion of workers on the minimum wage.

A further issue is that, looking at the living wage technical group and the minimum essential budget standard, the projected increase next year in the cost of housing will eat up the entire minimum wage increase for everyone. The challenge is that people are under a lot of different pressures and housing is currently the main driver of these. Despite the welcome increase, the minimum wage is still €2.50 per hour below the living wage. It is more than likely than people will not feel the increase because of cost increases in other areas.