Dr. Laura Bambrick:

I thank the Deputy. The first thing to say is that the commitment to move to a living wage, or 60% by 2026, is making a virtue of necessity. As this is coming from European law, this is happening. The only thing we really have to discuss and flesh out today is when it is going to happen and the timeline, as the Deputy has mentioned, and possibly the calculation method.

Let us take the calculation method first. ICTU supports the proposal of using the fixed threshold approach for a couple of reasons. First, no other country has a national living wage that uses the MESL approach. There are a number of reasons for that. It is very subjective to do as it is based on focus groups. There would be a lot of consternation about how those focus groups are selected and then what they decide as to what is the basket of goods. We sort of would be going back to far-gone times where it was for others to decide what the low-paid should be spending their money on. Do we include alcohol? How much to include for socialising? Do we include housing, especially in the context of an economy and a society with high housing costs? It is highly subjective, there is an administration burden on it and it is financially burdensome to the State. The main thing is that it is not very responsive and it does not give employers clarity. At least if we peg it to a fixed-threshold approach, it is more responsive for the employees and it is much more realistic for the employers.

They can see what is coming down. For those reasons, while the fixed threshold approach is not without its problems, we do think it is superior. We also think it should be pegged at 66%, in other words, the low pay threshold. That has the added benefit that at 66%, or the fixed threshold approach, it is at or slightly above theminimum essential standard of living, MESL. Therefore, we get the benefit of having that basket of goods without all the problems the MESL approach can bring. We think that is an appropriate approach.

The four-year timeline is very problematic. Economies like Germany are not known to be fast and loose in economic terms. As I mentioned, on Saturday two weeks previous, they moved a 25% increase from €9.60 to €12. They are showing it can be done. They have the same percentage of their workforce, that is, 18%, that would benefit in our economy if we moved to 60% this year. To be fair to the Low Pay Commission, in its recommendations around the living wage, it does make allowances in certain situations, whether it be economic or evidence-based experience from other countries, for the process to be speeded up over those four years. We think four years is too long, however, as the Deputy mentioned. It is outside the Government's own commitment to move to a living wage within the term of this Government.