Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

It is very timely that we should be discussing the national minimum wage and the living wage. The Labour Party's position is clear and unambiguous: no one working full-time should be living in poverty. The Labour Party supports the living wage and we want to see a genuine living wage become the minimum standard that applies to low-paid workers in Ireland.

While I am speaking on the topic of the minimum wage, I wish to refer to the remarks the Government made on budget day and since then on raising the minimum wage. Just today the Taoiseach said the recommendation of an increase of 30 cent to the minimum wage to €10.10 will proceed in January unless there is a disorderly Brexit. He said withholding the increase is in line with the recommendations of the commission. This is not strictly true and, let us be clear, not compatible with the law governing this area. The commission's recommendations state that the commission acknowledges that in the event of a hard Brexit the Government may need to review the recommended rate. This is not a recommendation to postpone the increase. There is an economic argument to be made that a higher rate might be more appropriate, given the need to boost demand in the economy in the event of an economic downturn. This might well apply to this cohort of 140,000 people, whose standard of living is likely to fall significantly in the event of a hard Brexit, with inflation projected at up to 4%. The suggestion that the Government might hold off deciding on the rate in the event of a hard Brexit is not provided for by law, and I intend to demonstrate this.

The law is clear: the Minister has three months from receipt of the recommendations to make a decision. The recommendations of the Low Pay Commission which have just been published are dated July 2019. It would be interesting to know the precise date on which the Minister received them. She does not have the luxury of taking a wait-and-see attitude towards Brexit. I am outraged, as are my Labour Party colleagues, at the way she has handled the issue of the national minimum wage. It is disgraceful. The Minister can decide to set a contingent minimum wage rise, with the option of changing her decision in the event of a disorderly Brexit, but this is not what the commission recommended. She is therefore obliged to lay a statement before both Houses of the Oireachtas outlining the rationale for her decision.

Economic analysis shows that raising the wages of the lowest-paid does not cost jobs in the economy. There is no evidence to support the Government's threat - and it is a threat - to suspend the increase to the minimum wage. With inflation running at 1.5%, the 30 cent increase will barely match the rising cost of living, which is why it is so important we take the politics out of setting the minimum wage and focus on the evidence. In this regard the work of the living wage technical group, based on research by the Vincentian Partnership for Social Justice on the cost of meeting a minimum essential standard of living, makes a very valuable contribution to our understanding of the cost of living.

I have looked at the legislation in this area. Under minimum wage legislation, the Low Pay Commission must make an annual report to the Minister, who within three months of the date of receipt of the report must either by order declare a new minimum wage in the terms recommended by the commission or in other terms, or decline to make an order. If the Minister declines to make an order, she must publish a statement of her reasons for so doing. It seems that on 9 October the Minister made a short statement on the reasons for declining to make an order declaring the national minimum hourly rate of pay. According to the statement of reasons, the Minister for Employment Affairs and Social Protection has declined to make an order declaring the national minimum hourly rate of pay until the situation in respect of Brexit becomes clearer. The Government amendment to this evening's motion says something different. It states that "the Government has accepted the recommendations of the Commission in their entirety; however, given that the terms of Brexit are not yet finalised, the Government has decided that a decision on the date of implementation will be made when the outcome of the Brexit negotiations becomes clearer". The reality is that the Minister has not just postponed the decision on the date of implementation; she has invoked her statutory power to decline to make any order. To be absolutely clear on this, the legislation gives her three months within which to respond. It does not permit her to postpone a decision beyond that three-month period, so a failure to decide within three months means no decision can be made for another year. The statutory function of the Minister in respect of this report is now spent.

The Minister had a once-off statutory response to make and she made it. She has responded to the report of the Low Pay Commission and declined to make an order, as the Act permits her to do. The result is that not only will the low-paid not get a much-needed pay increase recommended by the Low Pay Commission nor even a smaller increase of 15 cent per hour recommended by employers, as by failing to make any decision, the Minister has lost the power to make any order under the Act for the next year. The Minister must admit what she has done and justify it rather than pretending about what she has done. She has not just postponed an increase in the minimum wage, instead she has cancelled it. There is no room for another order until the commission makes its next annual report. That is the law, which I have read carefully.

Today the living wage is €12.30 per hour, whereas the national minimum wage is €9.80, a whole €2.50 lower. This gap was not as great 20 years ago. When a national minimum wage was introduced in 2000, it gave workers a guarantee they would be able to meet the basic cost of living. In 2000, the minimum wage was set at two thirds of the median average income, a level commonly used as a threshold for poverty. For example, it is used in this way by the European statistics agency, EUROSTAT. The goal of the minimum wage when it was first introduced was clearly to bring full-time workers above the poverty threshold. Unfortunately, this did not last long. In the 2000s the cost of living rose very quickly and although the minimum wage was also increased, it did not keep pace with median incomes. In 2010, the minimum wage was only 44% of the median income, meaning the minimum wage had fallen in value by a third.

The national minimum wage should not be a political football. The State is directed by the Constitution to ensure that citizens, men and women equally, can meet their needs as a result of their occupations. A good job is the best route out of poverty and if we are to build an equal and fair society, we must ensure work remains an attractive option for anyone who wishes to improve his or her circumstances. That is why the Labour Party sought to ensure that the national minimum wage is based on evidence and we were instrumental in passing the National Minimum Wage (Low Pay Commission) Act 2015, which created the Low Pay Commission.

The role of the commission is to consider evidence and to make a recommendation about at what level the minimum wage should be set. This reduces the discretion of the Minister of the day to ignore evidence when setting the minimum wage. The Low Pay Commission is an important mechanism to hold Ministers to account with respect to the national minimum wage and that is why the Labour Party has proposed an amendment to Sinn Féin's motion to include reference to the commission. Specifically, where the original motion ends with a call on the Government to, "introduce a living wage of €12.30 per hour in 2020", the Labour Party amendment calls on the Government to, "instruct the Low Pay Commission to ensure that the national minimum wage becomes a genuine living wage from 2020 onwards". The intent of this amendment is to get the Government to modify the remit of the Low Pay Commission so that it sets a national minimum wage at the level of a living wage now and into the future.

It is important that this motion acknowledges the valuable role of the Low Pay Commission and thereby ensures that all future iterations of the minimum wage are at least set at the level of a living wage, which is currently €12.30 per hour. As the Sinn Féin motion rightly indicates, proportionately more women than men tend to work in jobs paying the minimum wage. Young people are also disproportionately likely to be in low-paid work. However, approximately half of those on a minimum wage are over 24 so it is by no means limited to young people. There are full-time workers who are trying to pay rent and put food on the table based on a minimum wage or €1 or €2 more per hour.

The OECD points out that low pay in Ireland is more frequent than in nearly every other country in Europe. Nearly a quarter of workers in Ireland, or 23%, are low-paid. There are whole sectors of the economy, such as retail, farm work, security and child care, where the great majority of workers are on a rate of low pay that is less than a living wage. There is a growing gap in our country between those with good jobs that pay several times a living wage and those on low pay who cannot meet a basic standard of living despite full-time work. Some small employers may worry that a higher minimum wage will not be affordable but Fianna Fáil has not read the motion.

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