Low-paid workers asked the Low Pay Commission (LPC) not to increase the minimum wage, as they were concerned they could lose their jobs, the commission chairman has claimed.
Ultan Courtney, appointed LPC chairman last October, told the Oireachtas committee on enterprise, trade and employment on Wednesday that not all minimum-wage workers wanted pay increases.
The committee was discussing the LPC’s recent recommendation, agreed by Government, that the national minimum wage should go up by 80c, to €11.30 an hour, from January 1st, 2023. Workers’ representatives on the commission dissented from this recommendation, arguing it was too low and amounted to an effective pay cut.
Mr Courtney agreed with Senator Paul Gavan of Sinn Féin that the 80c – or 7.6 per cent – increase would amount to an effective fall in wages for the 164,000 workers it affected, if viewed from a “solely economic perspective”.
He said the commission was “not in the business of chasing inflation” but was mandated to recommend incremental minimum-wage increases that were “fair and sustainable” and would not cause “shocks” to the economy.
Senator Gavan said he believed workers would view the 80c increase as a pay cut.
“Well, it depends,” said Mr Courtney. “Some do and some don’t. Some actually say to us that they don’t want to be put in a situation where if you increase their wages to a certain amount that it costs them hours or their job... that’s doing more harm than good.”
Senator Gavan asked: “You have had submissions from workers asking not to get a pay increase?”
Mr Courtney said: “Yes. There are people who understand, very simply, the impact of getting a pay increase that’s not sustainable in their job.”
“I’m surprised at that,” said Senator Gavan.
Gerry Light, general secretary of the Mandate union and member of the LPC for six years, said he had heard the argument about increasing wages threatening business viability “many times”.
“[But] I certainly never heard the argument in all my years, that a low-paid worker actually urging caution against getting a pay increase. That always came from the employers.”
Jonathan Hogan, assistant general secretary of Mandate, which is a member of the LPC, said it was difficult for workers to “have faith” in a process “that leads to pay cuts and declining living standards”.
“By any measure we can see minimum-wage workers are falling further and further behind. The LPC is failing in its mandate to protect workers and we strongly oppose their recommendation as too low.”
Senator Matt Shanahan (Independent) said he was “inundated” with calls from small business owners “who are in really, really serious trouble in terms of the inflation”. Many would struggle to meet the increased wage costs from January. They would “reduce workforce and hours” rather than go to the Workplace Relations Commission to argue inability to pay, he said.
“To hear people talking here now about employers being hard on employees in terms of what they pay, I don’t think some people on this committee are living in the real world at all.”
The committee heard calls for a second minimum-wage increase either before or after the January 1st increase, as happened in 2007, and for an end to “discrimination” against young workers. Workers aged under 20 are entitled to lower minimum-wage rates.
From January 1st, the rates will be €7.91 per hour for those aged under 18; €9.04 per hour for 18 year olds; and €10.17 for 19 year olds. “Such discrimination against young workers has no place in a modern society,” said Mr Hogan.
