Helen McEntee (Meath East, Fine Gael) | Oireachtas source

We should not confuse the living wage with the national minimum wage. They are very different. The living wage is an estimate made by a number of NGOs and academics who make up the self-appointed living wage technical group. It does not engage with business or many other groups. Its work is based on research to identify the income required to have the minimum essential standard of living by a single adult household in Ireland conducted by the Vincentian Partnership for Social Justice. Achieving the 2019 minimum essential standard of living, as calculated by the group, would require gross earnings of €25,198 for a single person, implying a living wage hourly rate of €12.30 based on a 39 hour week over 52 weeks. This represents an increase of 40 cent on the 2018 living wage of €11.90. The main drivers of the increase are cited as changes in the cost of living and the tax system; however, the main driver of the increase in the living wage is understood to be the current housing market pressures and associated increases in rent levels.It is important that Ireland’s statutory national minimum wage and the living wage concept are not conflated. As a voluntary initiative, the living wage has no legislative basis and confers no statutory entitlement. The national minimum wage, on the other hand, has a legislative basis and confers a statutory entitlement on employees and a statutory obligation on employers. It is the legally binding lowest average hourly rate that can be paid by an employer to an employee. The rate is set and governed by the National Minimum Wage Act 2000 which applies to all employees, including full-time, part-time, temporary and casual employees, with some exceptions.

The National Minimum Wage (Low Pay Commission) Act 2015 established the Low Pay Commission, an independent body which makes recommendations on the national minimum wage to the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty. Since its establishment, the recommendations submitted by the commission have all been accepted by the Government and represent an increase in the national minimum wage of 13.3% since 2015. The national minimum wage has increased every year since the commission was established by Fine Gael and the Labour Party.

With effect from 1 January 2019, the current rate for the national minimum wage is €9.80 per hour. The national minimum wage approach seeks to find a balance between a fair and sustainable rate for low paid workers and one that will not have significant negative consequences for employers and competitiveness. It can be seen as a pragmatic approach, providing a clearly defined minimum hourly rate for employers, giving them the freedom to pay higher rates, while concurrently providing a measure of security for low paid workers. As it is legally enforceable, it provides that protection for workers.

More broadly, the setting of wages is a matter between employers and employees. It takes place in the context of the market. The Government does not and cannot interfere unduly in that process. In the past three years the number of workers earning the national minimum wage has ranged anywhere between 6% and 9% of all employees. On average, over the four quarters of 2018, national minimum wage employees accounted for 7% of all employees. The average number of individuals earning the national minimum wage or less in 2018 as a percentage of the total labour force was 8.5%.

The Government has accepted and implemented the recommendations of the Low Pay Commission in respect of the national minimum wage since the commission was established in 2015 by a Fine Gael and Labour Party Government. A Programme for a Partnership Government provides that the Government will rely on the annual recommendations of the commission. Relying on an independent body such as the Low Pay Commission is the most appropriate approach to take to achieve the right balance and a yearly adjustment to national minimum wage levels. The commission is working on its recommendations for this year and will report to the Minister for Employment Affairs and Social Protection in the coming weeks. Any recommendation the commission makes will be considered by the Government in the context of the upcoming budget.