The national minimum wage may rise by 65 cent in the forthcoming budget, an increase of just under 5 per cent that would bring it to €14.15 per hour.
The Government will have to approve the increase, which is understood to have been recommended to it by the Low Pay Commission. Such recommendations have previously been accepted.
If implemented, the new rate would work out at an increase of about €25 per week for workers on the current minimum wage of €13.50 doing a 39-hour week. It would bring weekly pay from €526 to €551.85, an annual salary of €28,696.
Up to 200,000 people earn the minimum wage in Ireland, a group disproportionately made up of women, younger workers and people with disabilities. Many of them are employed in the retail, hospitality and service sectors.
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However, the rate impacts on thousands more whose pay is linked, often informally, to the national minimum wage, including thousands of young people whose pay is based on a proportion of it.
On Friday, the National Youth Council of Ireland again urged the Government to abolish those sub-minimum rates in the forthcoming budget, arguing it is “not a radical idea”.
“It is in line with the Low Pay Commission’s recommendation and would end age-based discrimination, support decent work, and help businesses attract and retain talent.”
The council said governments have “always followed the Low Pay Commission’s advice on the general minimum wage – except when it comes to young people”.
“At a time when one in three young people are strongly considering leaving Ireland, we need to send a clear signal that their work matters and that their income adequacy is taken seriously,” it added.
The number of workers on the full national minimum wage has gone up in recent years due to the commission recommending, and governments approving, a number of increases that were above the rate at which wages were rising across the economy in general.
At the start of this year, based on a decision in last year’s budget, it went up by 80 cent to €13.50, a 6.5 per cent increase. A year earlier, it increased by €1.40, or 12.4 per cent, which was regarded as a significant step in the widely flagged target of transitioning to a living wage, set at 60 per cent of median gross earnings across the economy, by 2026.
The Economic and Social Research Institute, which carries out ongoing studies on the impact of the minimum wage, recently said data suggests that increases to the rate resulted in some cuts to the total number of hours being worked by those in receipt of it.
In April, it reported that the proportion of jobs advertised at the minimum wage had doubled from 7.7 per cent to about 15 per cent in the wake of the €1.40 increase.
Employers in the hospitality and retail sectors have been critical of the scale of the increases approved in recent years, saying these put additional pressure on businesses at a time when other costs have increased.
However, trade unions argue that those other costs, including basics like energy and food, have meant the lowest paid members of the workforce have had had to cope with increases to outgoings that have often been greater than headline inflation rates would have suggested.
Both sides are represented on the Low Pay Commission, which makes the recommendations.
