Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

I welcome this Bill from the Labour Party on a living wage, which the Social Democrats are happy to support. The introduction of a living wage is essential and there are no reasonable grounds for opposing its introduction. Robert Thornton, a member of the living wage technical group, described it as follows:

The living wage rate is based on the rationale that full-time employment will at least provide for a socially acceptable minimum standard of living for a single person without dependents. It represents the minimum required to meet physical, social, and psychological needs, and enable a life with dignity. Having an income below this standard of living means doing without goods and services which are essential for taking part in the norms of everyday life in Ireland.

Low pay is not a recent problem. It has been an issue for decades. It is a feature, unfortunately, of the Irish economy. Ireland has the third highest rate of low-paid workers in the EU, making up 23% of the workforce. We should be ashamed of that disgraceful statistic. The prevalence of low pay has fuelled the rate of in-work poverty, where households in which someone is in employment are still dependent on welfare to meet their needs. I do not know how many times I have heard the likes of the Tánaiste say the best way to address poverty is to get people into work. That is conditional on being paid a living wage. There has to be a line added to that point that the best way to lift people out of poverty is to get them into work.

It is not only bad for the individual to struggle constantly but it is also bad for the economy and society. We are all impacted by this. Low pay results in a lower tax take and means a higher need for supports such as the HAP, medical cards and so on. Low pay has a wider impact and it is in all our interests that we get to grips with the problem. Countries with greater levels of equality perform higher in areas such as life expectancy, as well as physical and mental health. The Spirit Levelis a good book which addresses that issue right across the spectrum.

The introduction of a living wage was committed to in the programme for Government. It is essential that the Minister provide a concrete plan on how we will get to a living wage. The Tánaiste stated recently that his preferred option for calculating the living wage would be to set it as a percentage of the median wage, as that process would be simpler. That approach may be simpler and the outcome may be higher than the minimum wage but it is not a living wage. That is an important point. A living wage, by definition, is about meeting the minimum essential standard of living and that cannot be quantified as a percentage of the median wage. When introduced, the living wage needs to be kept under constant review. Linking it to inflation will also be vital.

Inflation is set to reach around 8% this year. We can all see that money just does not stretch as far as it did even months ago. The rising cost of living puts pressure on everyone, particularly those defined as low-paid workers. A large number of people are finding it more difficult to put food on the table and heat their homes at the same time. An increasing number of households can no longer afford to do both. Every facet of daily life has been impacted. Before the recent rise in inflation, the cost of living in Ireland was 36% above the EU average. The cost of housing here is the highest in Europe, the cost of goods and services is the second highest in Europe and our fuel costs are the fourth highest in Europe. Many people in this country are simply not paid enough to live. There are people who worry every day about having nothing in reserve. If there is any little blip, they will not have enough for the bus fare. They worry about having to take a day off work sick as there is nothing in reserve. That impacts hugely on their quality of life.

A living wage reduces the number of people reliant on Government supports, improves quality of life and results in improved health and well-being. Much is made of the impact of a living wage on labour costs for employers, but those costs are offset by a wide range of benefits. A living wage results in greater staff retention and productivity, lower rates of turnover and absenteeism, a better reputation as an employer and an overall increase in motivation and morale in the workplace. Sectors with chronic low pay have a high rate of staff turnover, which does not benefit anyone. Workers are left in unstable working conditions where they do not earn enough to live in any kind of dignity and employers lose valuable institutional knowledge and spend time on frequent recruitment drives. To find an example of this we only need to look at ourselves. There is a very high rate of turnover among secretarial assistants in the Oireachtas. The starting salary is €24,423 and new recruits are obliged to start on the lowest band, regardless of education or experience. That salary is below the living wage and it sits uncomfortably with many of us in this House.

Countries that have done better in regard to a living wage have in place a system of free collective bargaining.

We do not take free collective bargaining seriously in this country and we are an outlier among European jurisdictions in that regard. In recent years, we have increasingly seen more precarious types of employment develop and, in the main, it is young people who are most at risk. We need to change our value system in that regard or we will have a race to the bottom.

There is a myriad of reasons to introduce a living wage, but most importantly, it is the right thing to do. A living wage contributes to building a society where we live and treat each other with respect and equality.

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