Dáil debates

Wednesday, 17 December 2014

Ceisteanna - Questions - Priority Questions

Wage-setting Mechanisms

10:00 am

Photo of Gerald NashGerald Nash (Louth, Labour) | Oireachtas source

The OECD Employment Outlook 2014 contains data on the incidence of low and high pay in OECD countries. In this context, the report defines the incidence of low pay as referring to the share of workers earning less than two thirds of median earnings. It ranks Ireland in fourth position, not second, with a figure of 21.8%, behind the United States, Korea and Israel, with figures of 25.3%, 25.1% and 22.1%, respectively, followed closely by Canada, at 21.7%, and Poland, at 21.6%. Significantly, it also shows that Irish average earnings in 2013 were the sixth highest among the 34 countries compared in terms of purchasing power parity.

The national minimum wage in Ireland is relatively high by international standards. The most recent figures published by EUROSTAT show that Ireland’s rate is the fourth highest among the 21 EU member states that have a national minimum wage. When the cost of living is taken into account, Ireland’s rate is the fifth highest. The most recent figures from the Central Statistics Office’s quarterly earnings hours and employment costs survey show that 4.7% of all employees, or just over 73,000 workers, were being paid the adult experienced national minimum wage of €8.65 per hour, or less, in the second quarter of 2014.

In the first instance, the decision to restore the national minimum wage to €8.65 per hour with effect from 1 July 2011, together with the decision to put the joint labour committee system on a more secure legal and constitutional footing and reinstate a robust system of protection for workers, represented a significant commitment by the Government to protect the lowest paid and most vulnerable workers. Second, as the Deputy will be aware, there is a commitment in the statement of Government priorities to establish the low pay commission on a statutory basis as an independent body to make annual recommendations to the Government about the appropriate level of the minimum wage and related matters. With a view to ensuring it is in a position to carry out its functions as soon as possible, I am in the process of establishing the commission on an administrative basis. Legislation to provide for its establishment will be brought forward early next year to place it on a statutory footing.

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