Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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246. To ask the Minister for Enterprise, Trade and Employment the evidence base and data used to determine the proposed increase in the national minimum wage for Budget 2026; whether the increase is sufficient to meet current cost-of-living pressures in housing, energy and food; if further adjustments are planned before the finalisation the Budget 2026; and if he will make a statement on the matter. [51015/25]

Peter Burke (Longford-Westmeath, Fine Gael)
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The Low Pay Commission has an evidence-based approach to its decision making. Its annual recommendations on the National Minimum Wage are informed by national and international research in the field of minimum wages and are guided by the statutory criteria it must consider when making its recommendations.

The Low Pay Commission uses data from the Central Statistics Office (CSO) when considering the appropriate rate of the National Minimum Wage.

Two CSO datasets which contain information on wages and earnings are used for the minimum wage calculations, the Labour Force Survey and the Structure of Earnings Survey.

The Commission’s 2024 Annual Report sets out in detail its review of the use of the Labour Force Survey and the Structure of Earnings Survey to estimate median wages. As noted in that report, the Commission’s use of data from both surveys to estimate median wages was informed by their detailed analysis of the two data sources and the views of external expert econometricians on the appropriateness of these surveys to estimate the median hourly wage.

The Commission and its secretariat continued the review of these surveys throughout the year, including through regular engagement and meetings with the CSO.

The Low Pay Commission has a statutory obligation to consider, inter alia, the effect that any national minimum wage recommendation will have on the cost of living in Ireland and as a result is very cognisant of the importance of its recommendation in light of current concerns about the current cost of living.

The Low Pay Commission considers the effect of the cost of living in a range of ways:

The Commission assesses the determinants of inflation and compares the change in inflation to the change in wage growth to calculate for the real change to average wages.

In 2024, there was a significant uplift of 12% (€1.40), and this year the minimum wage increased by 80c, an increase of over 6%. Both of these increases were well ahead of inflation and projected wage growth and have brought about substantial and real wage growth for the lowest paid workers in our economy.

Ireland had an increase in real wages of 4.5% between January 2024 and January 2025.

The value of the national minimum wage is also compared with the Minimum Essential Standard of Living (MESL) wage calculated by the Living Wage Technical Group. The MESL wage is calculated from a basket of goods and services deemed necessary for a minimum essential standard of living and accounts for the change in prices of the essential goods from year to year. The current national minimum wage of €13.50 represents a bite of nearly 92% of the MESL wage.

The Government is aware of concerns about the cost of living. We are also aware of employers’ concerns about the high cost of doing business.

The Government is committed to ensuring 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.

The Low Pay Commission's report and recommendations for the 2026 National Minimum Wage were submitted to the Minister for Enterprise, Tourism and Employment in July. They will be brought to Government for consideration as part of the Budget, as is routine practice.

The Low Pay Commission's report will be published, and the rate of the 2026 National Minimum Wage will be announced following the budget.