Paul Murphy (Dublin South West, Socialist Party) | Oireachtas source

The approach of the Government on the low pay issue was well encapsulated by the Taoiseach's "L'Oréal" moment at the launch of the Low Pay Commission when he was asked if he was worth his €185,000 salary. He declared that he was very much worth it. The approach of the Government is to set up this Low Pay Commission, express some concern about the crisis of low pay and wage inequality in society and then hive it off to a supposedly non-political body while standing over and continuing the drive of basing the recovery on a model of low pay and poor working conditions.

We have a crisis of low pay in this country and the second highest rate of low pay within the OECD. Average wages fell again in the course of last year, according to the Central Statistics Office, despite the much vaunted recovery. Together with this is a crisis of working conditions, which has been highlighted most graphically with the Dunnes Stores dispute, with workers being treated like they were on 19th century docks. The employer has complete control of hours worked and wages earned, etc., and this is used as a means to gain submission from workers, who can be punished for going on strike. We also saw the callous way in which the Clerys workers have been treated, thrown aside by an employer which was legally allowed to do so, with the previous employer walking away with a large amount of money. This is linked to the model of recovery taking place and the nature of work that is changing in this economy. The fact that the commission is solely focused on the question of low pay means it is missing a very important issue.

There were 272,000 fewer full-time jobs in the economy in 2014 compared with 2008, or a 15% drop in full-time jobs. At the same time, there are 55,700 more part-time jobs in the economy, a 14% rise, which speaks to the fact that previously reasonably secure and perhaps unionised or reasonably well-paid full-time positions have been replaced with a so-called jobs recovery made up of part-time, unsecure, un-unionised work, which may include zero-hour or low-hour contracts and precarious conditions, with workers subject to gross exploitation. That is not accidental and the Government cannot just wash its hands by saying it will have a Low Pay Commission to consider the low pay issue. The Government has actively promoted that model of recovery; it consists of low pay, zero-hour contracts and extra profitability for employers. We are a low wage but high profit economy.

A key method of the Government, which should be examined by the Low Pay Commission, is the use of so-called job activation programmes. These are the likes of JobBridge, Gateway, Tús, First Steps or whatever new name is formulated to try to rebrand people working for free, with employers getting free work in the public or private sector and people just receiving the dole and a very small extra payment of €1 or slightly more per hour.

That is in itself gross exploitation of those people, who in many cases are forced to work for free, with the threat of losing their dole, or a portion of it, hanging over their heads if they do not agree to work. It also drives down wages and conditions across the economy, because employers can use free labour, rather than paying people to work, and may use that against other workers. The Low Pay Commission should investigate the role of those so-called job activation programmes in pushing down wages across the economy.

I want to draw particular attention to one submission to the Low Pay Commission. IBEC has said it does not see any reason to favour an increase in the minimum wage but the Department of Finance has effectively said the same thing. This is an incredible situation, where one Department has made a submission to a body set up by the Government, supposedly to look at an increase in the minimum wage, and it argues that an increase in the minimum wage above the market clearing wage is likely to reduce employment. That is based on very few empirical studies. The vast majority of such studies give no evidence for that. It then argues that, in principle, this suggests that adjustment of the minimum wage should be symmetric and allow for consideration of a reduction in the rate in response to a shock to demand or a sudden loss in competitiveness. The fact that the Department of Finance made a submission potentially arguing for a reduction in the minimum wage sums up the Government's approach.

See this speech in context