The minimum wage should rise by €4 per hour to €15.30 per hour over the next two years to help the country’s most poorly paid workers cope with rising prices, the head of the Irish Congress of Trade Unions (Ictu) has said.
In a submission to the Low Pay Commission, the trade union umbrella group said a significant increase in the minimum wage would also keep the Government on track to meet future EU obligations on a basic standard of living.
“Low-paid workers on the national minimum wage are hurting disproportionately in this cost-of-living crisis,” Ictu general secretary Owen Reidy said. “We welcome the fact that the Government is committed to moving to a national living wage but it needs to happen sooner.
“The national minimum wage should rise to €13.30 in January 2024 and then increase by another €2 in January 2025. Increases in 2021 and 2022 were well behind inflation, hence the need for a more meaningful increase now.
Are you in a mortgage switching sweet spot? If so, you could save thousands
New health insurance company backed by Aviva claims it can offer ‘meaningful savings’
Election 2024 poll: Support for Independents jumps but Fine Gael remains most popular party
Hybrid working gains made during pandemic must be protected, Fórsa election document says
“We also believe that reductions to the minimum wage on age grounds are ill-judged and outdated. If you are old enough to work, you are old enough to earn the full minimum wage, and apprenticeships should no longer be excluded from the national minimum wage,” he said.
In its submission, responding to a request from the commission for proposals, Ictu argues that the recent increases to the existing minimum wage have not been sufficient to protect the roughly 165,000 people on it. That total, the organisations contends, contains a disproportionate number of women, people with disabilities, young people and migrant workers.
[ Cost-of-living crisis exerts ‘acute pressure’ on poorer familiesOpens in new window ]
Despite a 7 per cent increase to the minimum wage for 2023, their incomes have fallen by 4.4 per cent over the past three years. While the commission’s own data suggests an increase of €1.20 to the current rate of €11.30 will be required in 2024 to keep the Government on course to meet its own target of a living wage based on 60 per cent of median gross earning by 2026, a €2 increase would be in line with a recommendation by the EU’s joint employment report for “frontloaded implementation” of the adequate minimum wage directive which is due to be transposed into Irish law by November of next year, the organisation says.
The directive is intended to ensure all workers in full-time employment have a decent standard of living, something critics of the Government’s living wage formula say it will not provide. A separate union and NGO-backed group – the Living Wage Technical Group – argues that the living wage for 2023 would be €13.85.
“Increasing the hourly rate of the minimum wage to €13.30 will give low-paid workers a better chance of avoiding in work poverty and take their earnings close to the rate of the living wage as calculated by reference to the minimum essential standard of living,” the congress submission states.
“The economy is at or near full employment. The rate of unemployment in April 2023 was 3.9 per cent the lowest rate since 2001. The Central Bank has forecast that rate of unemployment will 4.4 per cent in 2024. Labour demand outstrips labour supply. Congress is therefore of the view that its recommendation of an increase in the hourly rate of the minimum wage will not lead to an increase in unemployment, a reduction in employment or damage the competitiveness of the economy as a whole,” it says.
