Louise O'Reilly (Dublin Fingal, Sinn Fein)
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51. To ask the Minister for Enterprise, Trade and Employment his views on the living wage recommendation proposed by the Living Wage Technical Group. [53831/22]

Leo Varadkar (Dublin West, Fine Gael)
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We want to reward work and ensure that work pays more. Minimum wage workers are among the hardest working people in Ireland and deserve to paid more particularly at a time of rising prices.

In September, the Government agreed to accept the Low Pay Commission’s recommendation to increase the National Minimum Wage by 80 cent to €11.30 from the 1st of January 2023. At least 164,000 people, possibly more are estimated to be in line for this increase, with many others on slightly higher pay levels also getting a knock-on increase.

That works out at an extra €30 per week, around €120 a month or €1,664 a year if you’re working full-time.

The Living Wage Technical Group, which comprises members including the Vincentian MESL Research Centre, TASC, NERI and SIPTU calculates a living wage by estimating the cost of a basic basket of goods, services and expenses required to maintain a “minimum essential living standard”. The Partnership estimates the living wage for 2023 as €13.85 per hour. It is worth noting that there are no employer representatives on the Living Wage Technical Group.

Officials in my Department have reviewed the report from the Partnership. It is important to note that this report is not connected to or endorsed by the Low Pay Commission and it is separate to the Programme for Government commitment to “progress to a living wage over the lifetime of the Government”. I understand that the Low Pay Commission met with representatives from the Living Wage Technical Group in the course of its deliberations on the living wage.

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 new National Minimum Wage of €11.30 is in line with the living wage strawman proposal. As such, next year can be considered the first year of a proposed four-year path towards reaching the living wage of 60% of the median wage.

I will shortly bring to Government a proposal on the adoption of a living wage for all employees, over a specified number of years.