Dr. Paul Redmond:

No, we have studied the impact of unemployment extensively following a series of minimum wage increases. The most recent thing we looked at was the cumulative impact of three minimum wage increases. We found no such impact on employment. That said, we did find some evidence of a modest reduction overall in hours worked. When you drill into it and look at the different sectors, you can see some differences across sectors. We found that in manufacturing and accommodation of food, for example, the reduction in hours associated with minimum wage increases is a bit larger. However, what we did then was to take these estimates and suppose that the average worker did have his or her hours cut by that amount. Even in those cases the minimum wage increases were sufficient to offset the hour reductions in terms of their overall wages.

In respect of the evidence on youth unemployment, I have reviewed the evidence that exists and none of the evidence suggests to me that there would be an explosion in youth unemployment. I have seen no evidence to that effect in any of the studies I have looked at. I am absolutely aware of the OECD study referenced earlier. It looks at an association between youth employment and sub-minimum wages and finds some association there, but that relates to particular countries. The other thing that is very important to address, as it has come up a couple of times and is actually incorrect, is that it has been said that the minimum wage in Ireland is somehow inordinately high when compared with other European countries. For a start, the adult minimum wage is the second highest in nominal terms after Luxembourg but nominal terms do not mean a lot. When one takes purchasing power standards into account and the cost of living, Ireland drops down to seventh. The idea that the full rate is inordinately high in Ireland is not true.

The other thing that is important to address is that when we are talking about the rate of minimum wage in Ireland compared with other countries and whether it is high or not, we are talking about sub-minimum youth rates. It is objectively true that sub-minimum youth rates in Ireland stand out as being low, which is precisely the reason that the European Social Charter raised them in the first place. When the European Social Charter addressed this in 2023, it looked at the adequacy of not only sub-minimum rates but minimum wages in general across Europe. Ireland was singled out as the only country having youth rates deemed too low to allow a decent standard of living. A couple of other countries were singled out for their minimum wages in general but Ireland was singled out in that regard. We have internationally accepted benchmarks by which we can assess whether a rate, the full or youth minimum wage rate is too high or too low. By those standards, Ireland has been deemed to have sub-minimum youth rates that are too low.