Maurice Quinlivan (Limerick City, Sinn Fein)
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130. To ask the Minister for Enterprise, Trade and Employment if he will report on the progress of the Programme for Government commitment to progress to a living wage over the lifetime of the Government; and if he will make a statement on the matter. [8918/23]

Simon Coveney (Cork South Central, Fine Gael)
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The Programme for Government contains the commitment to “progress to a living wage over the lifetime of the Government”.

In January 2021, the Low Pay Commission was requested 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 2022 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 2022, a proposal was outlined 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.

An interdepartmental working group was also formed to address the issues arising from the Low Pay Commission’s recommendations in order to assist with the progression to a living wage.

In November 2022, a Government decision on the introduction of a national living wage for employees was announced. The living wage will be set at 60% of hourly median wages in line with the recommendations of the Low Pay Commission. It will be introduced over a four-year period and will be in place by 2026, at which point it will replace the statutory National Minimum Wage.

As part of Budget 2023 the Government accepted the Low Pay Commission’s recommendation that the National Minimum Wage should increase by 80 cent from €10.50 per hour to €11.30 per hour which took effect from the 1st January 2023.

The new hourly National Minimum Wage of €11.30 is in line with the living wage strawman proposal. As such, 2023 can be considered the first year of the proposed four-year path towards reaching the living wage of 60% of the median wage which is in line with the recommendations of the Low Pay Commission.