Thursday, 15 September 2022
Department of Enterprise, Trade and Employment
66. To ask the Minister for Enterprise, Trade and Employment the measures that he has taken to implement the 2022 Low Pay Commission Report on progressing to a living wage; if a commitment will be given to implement the recommendation of a living wage target of 60% of the median wage of all workers; and his Department’s target date for achieving same. [45191/22]
I propose to take Questions Nos. 50 and 66 together.
The Programme for Government contains the commitment to “progress to a living wage over the lifetime of the Government”.
In January 2021, I requested the Low Pay Commission to report on how best the Government could progress to a living wage. Following commissioned research from Maynooth University and engagement with unions and representative groups, the Commission submitted its Living Wage Report in March of this year which included 18 recommendations.
In their recommendations, the Low Pay Commission proposed adopting a fixed threshold approach for the calculation of a living wage, as opposed to a Minimum Essential Standard of Living or “basket of goods” approach, and setting the fixed threshold at 60% of the median wage in the economy. The Commission also recommended that after the 60% target has been reached, subject to an assessment of the impact of this, the Commission should then assess the economic practicality of gradually increasing the targeted threshold rate towards 66% of the median wage.
In June of this year, I outlined a proposal to introduce a living wage for all employees. A public consultation was then launched seeking submissions from the public on the Low Pay Commission’s recommendations and on a ‘strawman proposal’ which provided an illustrative example of how a living wage might be phased in over a 4-year timeframe. The public consultation closed in August. It received 46 submissions which are now being reviewed and analysed.
An interdepartmental working group has also been formed to address the issues arising from the Low Pay Commission’s recommendations in order to assist with the progression to a living wage. The deliberations of this group, along with the consultation results, will inform a Government decision in the near future on the adoption of a living wage over a specified number of years.
While the living wage initiative is being considered, the Government will continue to be guided by the recommendations of the Low Pay Commission with regard to any future changes in the National Minimum Wage. Yesterday, I announced that the National Minimum Wage would increase by 80 cent from €10.50 per hour to €11.30 per hour with effect from the 1st January 2023. This is based on the recommendation of the Low Pay Commission.