Dr. Laura Bambrick:

Yes. I thank the Senator. The way we calculate a living wage can fall into two areas. I am sure the committee is aware of this. Do we go for the basket of goods and see what are the goods and services a person needs to be able to live an adequate and decent life, how much does that cost and how much does that work out at an hourly limit, or do we do it in a way that we tack it to a certain percentage of all wages in the economy? ICTU has come on for the fixed threshold approach, which is the percentage approach. We feel that going for the basket of goods approach is open and very subjective. It would be based on focus groups deciding what the low-income worker should buy. It would not be responsive enough. When we consider the cost-of-living crisis we are in now, one would have to gather together a lot of focus groups, get them to agree what should be in the basket of goods and price it up, and then calculate it. Whereas, if we peg it to what is happening to wages in the economy it is much easier and it is much more responsive. It gives better certainty to employers and employees. ICTU's recommendation would be that instead of it being 60% it would be 66%. Why do we say that? It is because 60% of the median wage is just the poverty line, whereas 66% is the low-income line. If a person is earning below two thirds of the median wage then he or she is considered, by all of the research and statistician agencies both national and international, to be a low-income worker. If our goal is to eradicate low pay from the economy, the living wage should be at 60% median wage. The benefit of this is that at 66% of median wage it is very close to what the level is for the basket of goods. We would be getting the best of both worlds. We would be pegging it to a fixed threshold approach, but we know at that level it would be high enough to eradicate low pay from the Irish economy and, in turn, the EU. We know that it would also be sufficient to provide that minimum essential standard of living, that minimum essential standard of living approach basket of goods.