Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Tacaíonn Sinn Féin leis an smaoineamh taobh thiar de An Coimisiún um Pá Íseal. Mar is eol do chách, tá géarchéim sa tír maidir le pá íseal agus daoine atá ag iarraidh a bheith ag obair go lán-aimseartha sa gheilleagar. Tá an géarchéim seo ag dul in olcas agus táimid ag bun an dréimire i gcomparáid lenár bpáirtnéirí thar timpeall na hEorpa.

Sinn Féin supports the establishment of a Low Pay Commission but wants it to be fit for purpose and ambitious for the results it seeks to achieve. The Labour Party's limp Low Pay Commission will not scratch the surface with regard to the damage done to this society over the past eight years. The Minister of State stated the commission has been modelled on its British counterpart. Alan Buckle, a senior adviser to the Labour Party in Britain and former deputy chairman and chief executive officer of KPMG, carried out a comprehensive report on low pay in Britain, published last year. In it he described the British commission:

[However], its role is short term and narrow. The current regime was designed in the 1990s to stop extreme low pay and abuse. Today the challenge is different, with millions of people earning just above the minimum but still living in poverty. This requires a broader and more ambitious strategy to tackle low pay.

The UK’s Resolution Foundation’s review of the future of the national minimum wage also found the role of the commission in Britain needs to change. The report’s first recommendation stated, “the government should make it an explicit long-term ambition of economic policy to reduce the incidence and persistence of low pay in the UK labour market” and that it should “broaden and elevate the body into the government’s official watchdog on low pay, monitoring and pushing progress in the manner of the Office for Budget Responsibility on fiscal policy.” The expert panel that completed this report was chaired by Professor George Bain, the founding chair of the Low Pay Commission in Britain.

These people, who have deep insight into the function of a low pay commission, when analysing how it worked in Britain over a period of time, came to the conclusion that the Low Pay Commission should be broadened and elevated. I and my colleagues in Sinn Féin have raised these reports with the Minister of State in the Seanad and at committee meetings, but he has refused to constructively engage with Sinn Féin, trade unions and NGOs on the recommendations contained within.

Britain’s experience offers us a real opportunity to construct a commission that is relevant and ambitious in its purpose. We do not have to reinvent the wheel. We can see what has been invented. It is as if we are inventing the calculator on this issue while Britain is inventing the iPad. What we are constructing is a generation behind our counterparts in the rest of Europe, who are realising the faults within it.

Ireland is at a crossroads, and while it is not politically opportune for Fine Gael or the Labour Party to acknowledge the scale of income and economic inequality in Ireland, the Minister of State has a responsibility to do so. He has excluded the provision of public services and social security as provided for under the International Labour Organization's minimum wage fixing convention as a consideration for the commission, and there is not even a fleeting reference to inequality or poverty, two major problems in Irish society. The Minister of State could have given the Low Pay Commission the role of watchdog on low pay and given its members the power to set targets to reduce low pay across a number of policy areas, but he chose not to do so.

In Britain it has been recommended that as part of its broader remit the Low Pay Commission should examine annually the effectiveness of policies to enforce the national minimum wage and make recommendations for improvement. Sinn Féin fully supports this proposal, and it is clear from other areas of employment law that enforcement is a massive and damaging problem.

In evidence to the Joint Committee on Jobs, Enterprise and Innovation, the Migrant Rights Centre opined that focusing on extreme low pay is a restrictive approach, adding that the work of the commission should be far more ambitious. The organisation recommended that the Government set a goal for the elimination of low pay, that the remit of the Low Pay Commission be expanded so that it becomes a watchdog on low pay, and that it be given powers to set targets to reduce low pay across a number of policy areas.

The National Women’s Council also appeared before the committee and sought the extension of the work of the commission to have regard to gender equality and other equality factors as a named aspect in its deliberations, as are the cost of living, in-work poverty levels, quality of job creation and the social and economic impact of wage levels and the associated cost or benefit to the State.

The Vincentian Partnership for Social Justice highlighted the organisation's concern that people working a full week come home with a wage that does not meet their family’s minimum essential standard of living. It is very difficult to see members of a family carrying out a full week's work but not having the money to pay for accommodation, food, clothing, health and education. An economy built in this manner is an unfair economy. The Vincentian Partnership for Social Justice stated that it is difficult to see how the question of the adequacy of the national minimum wage cannot be part of the remit of the commission. It accepted that it is not the only consideration, and accepted the importance of employment, competitiveness and economic issues, but argued that adequacy must also be taken into account.

ICTU in its presentation described the omission of any reference to the median wage as surprising, given that when the national minimum wage was introduced it was recommended that it be set at two thirds of the median wage. It added that the median wage is the normal criterion against which national minimum wages are considered and set.

All of these contributions reflect some of the debate taking place in Britain on the shortfalls of the current Low Pay Commission, the model on which the Minister of State has based the Irish Low Pay Commission. The bottom line is that he has limited the work of the commission to advising on the setting of a national minimum wage, and it is impossible for us to fathom why this is the case.

High levels of low-paid, insecure work are now entrenched in the Irish labour market, and this type of work is seeping into non-traditional low-paid sectors such as journalism, health and legal services. Ireland has one of the highest rates of low pay in the OECD and of underemployment in the 28 EU member states. It is no accident, because the Government and the previous Government have focused on creating two competitive advantages: a tax break economy and inherent low wages. Sinn Féin has cried out over and over again that if we want a functioning and sustainable economy we need to look at competitive advantages in our infrastructure, education and health services. To focus on low wages and bargain basement tax opportunities is unsustainable and costly to our citizens.

A total of 60% of people on low pay are women, and 50% of women in Ireland earn €20,000 or less. These are shocking figures. Gross income inequality in Ireland is the highest in the EU before social transfers. The Government admits this and then lauds the fact that it has a social welfare system to try to beat this massive problem. The social welfare system is in effect providing a sizeable subsidy to employers with regard to pay. If these social welfare supports were to be pulled away, of course enormous damage would be done to employers, but it would also mean that employers would not be able to employ people on the wages they pay to carry out the work they do.

As TASC and others have extrapolated from significant domestic and EU-wide research, there are now structural deficiencies in Ireland and in the EU economy which, if left unchecked, will continue to result in wage dumping and stagnation. Squeezing wages will not deliver the growth we need and, more importantly, it will not tackle inequality or deliver the goods and services on which citizens rely. The Labour Party and Fine Gael’s low-pay, low-tax and high-cost economic model is not serving us well. Wage share as a percentage of national income has fallen in Ireland by roughly 20% in the past 30 years. This trend is replicated across the EU 15, and while the fall in some instances has not been as sharp, it is between 10% and 20%. Therefore, the proportion of people's wages as national income has been decreasing over the past 30 years. This trend has not gone into reverse under the watch of the Labour Party.

Recent research conducted by the Foundation for European Progressive Studies and presented to the TASC annual conference last week argues that, instead of allowing the continuation of wage moderation or dumping policies, we need to fundamentally rethink our economic policy. Wages are a driver of the economy, and if we do not tackle low pay, consumption will fall, private investment will not make up the shortfall and most of the positive effects of net exports will be wiped out. However, as the remit of the commission is constructed currently, it is not instructed to consider any of these matters. This makes no sense.

Ministers have claimed that establishing the Low Pay Commission pushes pay outside the realm of politics, which ensures that low pay issues stay front and centre in public debate and are never allowed to drift off the agenda. The Minister with responsibility for business and employment has said that the establishment of the commission essentially takes politics out of setting the minimum wage. This makes no sense to me.

I challenge anybody to stand in front of the electorate in the upcoming election and state that low pay is outside the basis of political debate and is not a political issue. I challenge the Minister of State to stand in front of the people at the next election and say to them that if he is re-elected, he will ensure that he has a hands-off attitude with regard to low pay and it will not be directly in the political debate. Setting the national minimum wage is a political decision underpinned by the fact that the Bill itself provides that the Minister can accept, reject or vary the recommendations of the commission. The Government’s use of State-sponsored bodies as a mechanism by which to wash its hands of responsibility for policy and political decisions is completely disingenuous and fools nobody.

We need to be ambitious for what the Low Pay Commission can achieve and we need to draw from the existing wealth of expertise and research available on how we can meet this objective. As the Alan Buckle report notes, in advance of the national minimum wage being introduced, warnings of huge job losses proved false, and most businesses now see the minimum wage as integral to protecting them from being undercut by those competing with extreme low wages. It is also important to realise that we are living on a planet that has seen massive change in wage equality issues, with 1% of the population now having almost the same level of income as the poorest half of the population. We live in a country where wage inequality is strongly and radically different from what it was in the country in which I was born in the 1970s. It is not business as usual with this issue and it is not simply the left and right having a barney over what wage should be set. This is an issue on which nobody, regardless of his or place on the political spectrum, should shirk responsibility in dealing with the catastrophe that is the low wage economy that has become embedded in society.

There is also a strong business case for expanding the remit of the commission to consider low pay, zero-hour contracts and the introduction of a living wage, as well as working towards a higher skill, higher wage economy. Tackling low pay is good for society and for the economy; it is good for people and business, and it is also good for the Government's finances. Limiting the debate, policy and political agenda to a discussion solely on the minimum wage is a wasted opportunity for the Government.

The Minister of State made a number of references to the general state of the economy but the truth is that emigration has made a far larger impact on the unemployment figures in this country than any Government policy from the past four years. There are between 80,000 and 90,000 people "employed" in job activation schemes, and these individuals are not getting the proper compensation for the jobs they do. The figures mask the reality and Ireland is still in a jobs crisis. We have seen the development of a two-tier Irish society with respect to wages and poverty, for example. We also live in a two-tier society in a geographical sense, as outside the M50 many people can only read about so-called growth and consume it through the media. The south west has seen a fall in the number of people employed and the Border region is still in significant recession. If we consider this from an age perspective, we are still seeing falls in the numbers of young people employed.

There is a major opportunity in this economy but the Government has not pursued it. On numerous occasions I suggested to the Minister that there must be a radical approach to e-commerce, as billions of euro are flowing out of the economy because retail is migrating towards e-commerce. Nevertheless, most Irish retail is not ready for e-commerce. The issue will worsen if the Government does not take radical action.

I make an appeal to the Minister. Instead of writing pre-election scripts and bringing them to Leinster House, he should take cognisance of the deep and damaging scenario that we have in this country with regard to unemployment and entrenched low pay. Instead of developing a limp Low Pay Commission, the Government should have ambition for the opportunities that the Minister could have. I have said it before and will repeat it that the Minister may not have another crack at this, and it may be the last opportunity he has to address this significant problem and build on to the Low Pay Commission the ability to focus on all aspects of low pay and public services, which have a phenomenal impact on people's purchasing power. It is not too late to make those changes. We will present our amendments on Committee Stage and I urge the Minister to close his ears to Fine Gael backbenchers and open them to the plight of those on low pay.

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