Dr. Karina Doorley:

Quite a bit of work has been done on the minimum wage over the past few years in the ESRI. The particular study the Chair referenced was an examination of the 2016 change in the minimum wage, which was the first increase in a long time. It was a modest increase. Buckets of international literature show that when there are modest, progressive and successive increases in a minimum wage it does not negatively affect employment and firms are usually able to cope with it. It is considered a good idea for the minimum wage to at least keep pace with inflation or growth in other wages so that minimum wage workers are not left behind. This does not seem to have a significant effect on employment either way. If the minimum wage doubles, that would have an effect on employment.

When we speak about moving to a living wage, it would depend on the level at which that is set. If it is going to be quite a large increase, the things to consider are whether there will be a negative effect on employment and whether welfare payments will be able to keep pace with the increase. If we have a living wage that increases the standard of living for low-wage workers, this increases wage growth overall. We will then find that people in receipt of welfare payments are left behind which may increase income inequality, which is the last thing we want from an increase in the living wage.