Gerald Nash (Louth, Labour) | Oireachtas source

I am proud to support and second the Bill, which is anchored in the very best traditions of the Labour Party. We fundamentally believe work must always pay. That is an absolute, fundamental principle for us and for the wider labour movement. It is timely that we now reflect on pay policy nationally, and when we do, we should do so in an informed and evidence-based way. For many, the market decides what they are paid; for others, it is a collective endeavour negotiated between the employer and trade unions through employment level agreements, collective agreements, or sectoral employment orders or employment regulation orders. For more than 130,000 of the lowest paid workers, the statutory Low Pay Commission has, since 2015, recommended in an evidence-based way the rate of the national minimum wage for the following year, adoption of which, of course, is a matter for Government agreement.

Prior to the National Minimum Wage (Low Pay Commission) Act 2015, nobody would have said the way in which the national minimum wage was set was perfect - far from it. The first minimum wage rate was set and introduced in 2000, under the terms of the National Minimum Wage Act 2000. The legislation made the setting of the rate a matter for the Minister of the day, with a genuflection in the direction of the social partners. Given the experience in 2010, we can say with hindsight that giving all that power to the Minister of the day was a bad idea. It turned out to be a very bad idea for low-paid workers, in light of what happened in 2010. As soon as the crash came, Fianna Fáil, the Minister of State's party, slashed the national minimum wage with the stroke of a pen, from €8.65 to €7.65 an hour. This was the most callous of cuts, made with the connivance of ideologues in the IMF. I say "ideologues" because that is exactly what they were. The economic orthodoxy in vogue at the time claimed that by cutting pay, we would create jobs. This was always arrant nonsense and that was proven to be the case with evidence put forward to challenge the narrative. The lowest paid workers in this country were sent home with a pay cut they could ill afford.

With respect, this will be to the eternal shame of the Minister of State's party. That cut did not create a single job, prevent a single worker from losing his or her job or create a single hour of additional employment. All it did was lead to penury and more pain for the lowest paid workers. Who will ever forget the passionate and forensic demolition of that tawdry and senseless cut by the then Deputy Michael D. Higgins, in the very last contribution he made in the House as a Labour Party Deputy before he went on to be elected and to represent us with great pride as our President? With that speech ringing in our ears when we were elected to government in 2011, we almost immediately set about restoring the rate to €8.65 an hour. One reason we established the Low Pay Commission in the first instance was to provide a bulwark against ill-informed, ideologically motivated cuts to the floor of pay, beneath which no worker should be allowed to fall.

I am proud, along with my Labour Party colleagues, to have established the Low Pay Commission, probably the single most important institutional reform on the statutory landscape to protect and advance the interests of lower paid workers. One of the most significant but underappreciated functions of the commission relates to the remit we gave it regarding research into low pay. Resistance to increasing statutory minimum rates of pay among some has been as ill informed as it has been vociferous and aggressive. A dearth of such evidence was available in an Irish context to challenge the narrative in play in late 2010 and early 2011. The argument was that if we were to increase the national minimum wage each year, the sky would fall in and it would be the end of the market economy as we knew it. Businesses would close and thousands of jobs would be lost, but nothing of the sort happened when we increased the minimum wage twice. As it happened, research the Low Pay Commission commissioned from the Economic and Social Research Institute, ESRI, confirmed what we had said all along, namely, that predictable incremental increases to the national minimum wage will not close businesses or cost jobs but, in fact, can boost the economy and productivity and help with staff retention, and we know how difficult an issue staff retention is these days.

The Low Pay Commission has changed the conversation and changed the debate. It has armed us with the evidence we need to challenge the bogus arguments we have been exposed to for years. It has significantly delivered minimum wage increases every year since 2016. The largest annual increase in that period remains the one we signed into law in 2015, which came into effect in 2016, namely, an increase of 50 cent an hour. If it were not for the statutory function of the Low Pay Commission to make an annual recommendation on the rate of the minimum wage based on a framework embedded in legislation, it is safe to assume we simply would not have seen annual increases the likes of which we have seen since the establishment of the commission.

The question is how we can move to a living wage that meets the needs of working people. The programme for Government, agreed between three parties, states that within the lifetime of this Administration, we will see the delivery of a living wage. I am sceptical, and I am not making a narrow political point, because of the form of the previous Government. I am sceptical because, between 2016 and 2020, that Government missed the national minimum wage targets it had set out in the programme for Government agreed in 2016. Indeed, the Government has yet to tell us how a living wage will be achieved in this country.

Since 2016, we have told the last two Governments how this should be achieved. As Deputy Bacik outlined, the Bill sets out that the Low Pay Commission must be given a target in law to achieve a living wage.

This House will be familiar with putting targets into law, especially over recent years. We have legally binding climate targets. We can give the Low Pay Commission a target of reaching a living wage of two thirds of the median hourly income over a three-year period. If we can have targets for climate and carbon emissions, why can we not have targets to put an end to low pay? In real terms, the living wage is €12.90 an hour. That is the rate agreed by the living wage technical group last year as the rate of the living wage for this year. That is about two thirds of median hourly income. The gap between the national minimum wage and the living wage is €2.40 an hour for every hour someone works. Therefore, a full-time worker on a real living wage earns just under €100 a week more than someone on the same hours who merely subsists on the national minimum wage. That is intolerable. There is no argument for it. It is unacceptable . The gap between the national minimum wage and the living wage is rising each year and becoming even more problematic as low-paid workers who spend every cent that they earn on the bills and basics see the value of their hard-earned euro diminish by the week in the context of the cost-of-living crisis which we are experiencing now and is likely to continue for the next couple of years.

The case for a living wage is more acute than it was before. We need a roadmap for a direction of travel, anchored in primary legislation, to provide some certainty to workers and employers on how the living wage that we want, and that the Government says it is committed to, is to be achieved. That is what this Bill is fundamentally about. It is about making the historic quest for a living wage that allows everyone who works to have a decent standard of living a reality.

Poverty hurts. It stays with you all of your life. We in this House clap ourselves on the back collectively. We tell ourselves what a great job we do in this country as our welfare system lifts hundreds of thousands of the working poor out of absolute poverty but we rarely ask ourselves why we must spend so much on income supports such as the working family payment each year. We do so because we, this House and this Government, allow bad employers to pay poverty wages. It is an absolute scandal that taxpayers spend hundreds of millions of euro every year topping up the meagre subsistence wages paid by hospitality bosses, for example, who have made careers out of extorting more cash from the State. They are at it again without any reference whatsoever to the pay, terms and conditions of their employees - the very people who make their businesses a success. A successful society would not be comfortable and should not be comfortable with having one in five of its workers on low pay. We need a living wage now. We need to make this a reality now and stop the talk. We need action. We need to put in legislation a target for a living wage attached to the Low Pay Commission to achieve such a living wage in law in this country over the next three years. This will make sure we end in-work poverty and we achieve the aspiration that work should always pay.

See this speech in context