Dáil debates

Tuesday, 26 September 2017

Other Questions

Living Wage Introduction

5:25 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

38. To ask the Minister for Public Expenditure and Reform if he will implement a living wage for all employees of the State; and if he will make a statement on the matter. [40461/17]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The issue here relates to State employees and whether the Government, and the Minister for Public Expenditure and Reform, Deputy Donohoe, are of the view that the Government will implement a living wage across the public and Civil Service and that it will guarantee employees in the direct employment of the State that they will receive a living wage, which is at €11.70 per hour.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, the Minister for Employment Affairs and Social Protection is responsible for setting the national minimum wage, on the recommendation of the Low Pay Commission. The current minimum wage is set at €9.25 and the third report of the Low Pay Commission recommended that this be increased by 30 cent per hour.

The Government welcomed that recommendation. We acknowledge that it is a modest increase but one that is ahead of the rate of inflation and average increases in earnings. This would be the fourth increase in the minimum wage since 2011, and the second under this Government.  I will consider the consequences of this change in the context of budget 2018.

In terms of the public service as employer, it should be noted that the recent Public Service Pay Commission report found that lower paid public servants receive a pay premium of 15% compared to their equivalent private sector colleagues. Based on data available to my Department, more than 94% of public service employees are on salary points in excess of €25,000 per annum. The suggested wage at €11.70 per hour based on the Civil Service 37 hour standard net working week equates to an annual salary of €22,589.

Any of those currently on an annual salary of less than €22,589 could be receiving remuneration in excess of the suggested living wage through additional premium payments in respect of shift or atypical working hours, or are on salary scales that progress to the suggested living wage through incremental progression.

Under the recent public service stability agreement, from January 2018 pay in the public service will be further adjusted.  The pay increases provided for under the agreement are progressively weighted towards the lower paid with benefits ranging from 7.4% to 6.2% over the term to the end of 2020.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I find it bizarre that we are actually discussing this issue at all. It is about people, who are directly employed by the State, who should at the minimum be receiving a living wage that is calculated as the minimum a person requires to live on. In the view of Sinn Féin, the minimum wage should be raised to a point where it reaches the living wage and that it should happen incrementally. There is, however, a point where we can start and we can compare the public service and the Civil Service against the private sector, but I believe that we, the Government Departments and public and civil servants should be taking a lead on the issue. We are not talking about a huge number of people. To put it into context we are probably talking about 1% of the Civil Service and 6% of the public service. There are families, some 3,600 public sector workers, who are reliant on additional State supports such as family income support just to get by.

Is it the short, medium or even long-term ambition of the Government to ensure that every public sector worker, that is everybody employed directly by the State, will receive, at minimum, a living wage? Is that something the Minister is willing or able to say? Does he believe they should at minimum earn a living wage or are we going to hear comparisons between those in the Civil Service and the private sector?

5:35 pm

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would behove the Deputy to better acknowledge the point I made that more than 94% of those who work for our public service earn a salary which is significantly ahead of the living wage. As an employer, the State is already exceeding the level of wages that would be created by the implementation of a living wage policy. Of the employees of the State, 94% have a salary which is in excess of that. In relation to those who are earning less than €20,589 and as I pointed out to the Deputy, they will be likely receiving additional payments for shift work and be on a salary scale which will give them the benefit of increments. The agreement we made recently with the Irish Congress of Trade Unions prioritises those on lower incomes for a faster rate of wage increase. It is precisely because I recognise that those on lower incomes face great challenges in getting by within our economy and have needs which we have a duty to try to meet that we have made a wage agreement that seeks to give wage increases to them at a faster rate than to those who earn more. It is cumulatively because of decisions which have been made in this area for decades that we are in a place in which the overwhelming majority of those who work for the State earn more than the living wage.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister talked about the 94%, which is the same figure about which I talked. I simply put the focus on those earning below the living wage, which is 6% in the public sector and 1% in the Civil Service. It would not require a huge amount of money for the Minister to do this. He referred to pay deals and all the rest. Let us look at the pay deals and the upper end. Let us look at the fact that the additional part of the pay deal for those in the public sector who earn more than €90,000 will cost a total of €55 million. Let us look at the fact that 489 individuals working in the public sector will get an increase of €11,749 per year. That is half the living wage.

The cost of this is in the small few millions. There would also be net savings because 3,600 of these individuals have to rely on family income supplement payments to get by. It is almost question of principle and, forgetting about the year on year increments, whether the Minister believes that within two or three years no one working in the public sector should be receiving less from the State in payment than the living wage? I want to introduce it in this budget and we will show in our alternative budget that it can be done.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Because of the variety of work public and civil servants do and because of shift work and so on, there are a variety of work agreements and arrangements. That is the reason we have a public service pay agreement. The Deputy asked me what are my principles. We are making faster rates of wage increase available to people who earn less. That is me putting my principles into action. We need to ensure that those who earn less within the public service and Civil Service have the opportunity to have their wages fully restored. Perhaps the Deputy has shifted the Sinn Féin position on this matter, but my understanding is that his party welcomed the ratification of the recent agreement and understood that there are some people who work in our public service and Civil Service who are on higher levels of wages because of the markets in which they operate, for example, hospital consultants and those who provide specialised services. We must remunerate those people so they continue to provide those services within our State. That is why they are getting increases that are larger in cash terms than those who earn less. We are doing so because we need them to work in our State to provide services that matter to our society. If the Deputy is asking what is my commitment to those on lower pay, I point to the fact that we have a wage agreement in place which will provide them with a path to wage restoration that is not available to many who earn more.