Oireachtas Joint and Select Committees

Wednesday, 28 September 2022

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Cost of Living, Minimum Wage Increases and Report of Low Pay Commission: Discussion

Mr. Ultan Courtney:

There are quite a number of issues that the Low Pay Commission is required to take into consideration, including changes in earnings, currency exchange rates, income distribution, unemployment, employment, productivity, GDP, modified domestic demand and inflation, which in the year to May 2022 was 7.8% while the forecast by the ESRI at the time was for 4.4% into 2023. It also commissions research from Maynooth University and the ESRI makes a lot of valuable contributions. Many contributions come from submissions that people make, such as small employers and the unions, including Mandate. All of that goes into the mix to try to make a recommendation.

We are constrained by what we are asked to do. We literally cannot make it up. We cannot just decide on an increase because we think that is the right increase. We have to take account of all of these things. There are two main issues. The main thing is obviously to do what we are tasked to do. I was interested to hear the Deputy’s comment about a fair and sustainable increase in low pay. That is what we are here to do as well over time, but we are tasked also to ensure that we do not impact on employment and competitiveness, which would be a negative impact for the workers we are trying to help at the end of the day. There are lots of good reasons for raising the minimum wage and there are negatives to doing it as well but, overall, we want to try to improve the position for people without having the net effect of a deterioration in jobs in the economy or of making the economy worse off.

The critical difficulty, as noted in the discussion with Senator Gavan, is the inflationary impact which is now impacting on what we do. We have not had that for the last ten years or so. That has been a period of price stability from which we have all benefited. Trying to get inflation back down is a critical matter which helps us inordinately in our work as well. The last thing we want to do, and it is the same problem the trade union movement faces, is to do wage deals that do not have a real increase in income. Everybody states that the public sector pay deals that were done in Dublin Bus, Bus Éireann and Irish Rail, organisations that I had dealings with, will all have to face that. They do not seek to try to put them beyond inflationary pressure because we all know, particularly those who went through all of this in the 1970s and 1980s, what a wage spiral does. It takes away the good of what we are trying to do, which is to improve the lot of those who have the least.