Mr. Michael Taft:

I will try to clarify some of the targets and thresholds that have been subject of confusion. I am a member of the Low Pay Commission, LPC, although I am not appearing today in that capacity. Earlier this year, the LPC, in recommending its strategy for implementing a living wage, made clear that the final destination is 66% of the median wage, which is referred to as the low pay threshold. Anybody earning below that 66% threshold is officially categorised as low paid. As my colleague Ms Buckley pointed out, 23% of women employees are below that threshold while 17% of men are below it. It is one in five. The arrangement to go to 60% is merely, if you will, a way station in the recommendations of the Low Pay Commission. The figure of 60% was chosen as the first phase of implementing a living wage because there are a considerable number of academic studies and surveys showing that raising it to 60% will have no negative impact at all. In fact, it will have several positive benefits. Having reached 60%, the LPC must the carry out an assessment that will, in essence, consider the capacity of the economy to afford to go to 66%. That is what the LPC does every year in any event, so in one sense it is not different. The next stage, therefore, will be to move to 66% within three to five years.

Senator Higgins raised a point in respect of the living wage technical group, which has been providing information on what a living wage should be since 2014 and is made up of civil society groups, including SIPTU. It used the minimum essential standard of living, MESL, approach, which involves using focus groups and pricing 2,000 goods and services. The paper published by Maynooth University that fed into the recommendations of the LPC stated the MESL approach is closest in spirt to the living wage because it involves pricing those goods and services. However, for the sake of transparency, consistency and certainty, the LPC went with the fixed threshold approach because that means there is no argument over which goods and services are included each year and all of that. However, the committee may wish to consider that, in endorsing that fixed threshold approach, and although 66% is usually the approximate level of the figure produced by the living wage technical group anyway, support be given to any civil society group or organisation that conducts studies on a living wage using the MESL approach or any other internationally agreed protocol. It is important we continually monitor the fixed threshold approach as we move towards the living wage and 66% to ensure it is achieving its function rather than just being a calculation on paper. Important support for moving towards the living wage would be provided by civil society continuing its work of assessing the living wage according to the MESL approach or any other protocol.