18th July 2017
Low Pay Commission recommends 30c increase in minimum wage
Government welcomes proposal to increase minimum wage as part of wider programme to support lower paid workers and provide opportunity to all
The Low Pay Commission is recommending an increase in the national minimum wage of 30 cents to €9.55 per hour. The announcement was made by An Taoiseach, Leo Varadkar, Tánaiste and Minister for Enterprise & Innovation, Frances Fitzgerald TD, and Minister of State for Disability Issues Finian McGrath.
In its report to the Tánaiste and Minister for Enterprise & Innovation, Frances Fitzgerald TD, the Low Pay Commission sets out the range of data it has considered in recommending the increase, including risks to the economy and international comparative research. The Commission also sought submissions from interested parties and consulted directly with workers and employers in relevant economic sectors.
Speaking after Cabinet discussed the matter today, An Taoiseach Leo Varadkar said: “The Government welcomes the recommendation from the Low Pay Commission to increase the national minimum wage by 30c to €9.55 per hour. It would work out as a €12 increase in a full 40 hour week. This would be a modest increase but it’s ahead of the rate of inflation and average increases in earnings. It would be the fourth increase in the minimum wage since 2011, and the second under this Government, and a further step towards the Programme for Government commitment for a minimum wage of €10.50.
“The Government wants everyone to have an opportunity to share in the ongoing recovery. Increasing the minimum wage will help to achieve that goal by providing an absolute minimum for earnings. We intend to formally respond to the Report this autumn, including its recommendations regarding employers’ PRSI, in the context of Budget 2018.”
An Tánaiste Frances Fitzgerald said “I warmly welcome the recommendation to increase the National Minimum Wage by 30c. Increasing the minimum wage is just one tool in a wider Government programme to help the lower paid and incentivise people into work. New childcare subsidies are coming on stream in September and I am progressing a set of new proposals to address zero hour contracts, low hour contracts, banded hours and related matters to help combat the issues of so-called precarious employment in a balanced way.
“The Low Pay Commission is non-political. It draws on a range of data in reaching its recommendations and takes into account issues such as job-creation, competitiveness, currency exchange rates and international comparisons. These issues are also considered in the wider context of Ireland’s continued emergence from recession and the potential impact of Brexit.”
Minister Finian McGrath said: “The recommendation to increase the Minimum Wage is to be welcomed and is something that is very important to all partners in Government. We still have a way to go to bringing it to the Programme for Government target of €10.50 an hour, but this recommendation is a very positive and strong step forward.”
Minister Pat Breen TD added: “I also welcome the Report and would like to thank the Commissioners for their work in producing this third report which takes account of an even broader range of data than previous reports. This comprehensive analysis is to be welcomed’’.
ENDS
For more information contact:
DJEI Press Office 01 631 2200, press.office@djei.ie
Editors’ Notes:
The Low Pay Commission Report is available at www.lowpaycommission.ie
The third Report of the Low Pay Commission recommends that:-
- The rate of the national minimum wage for an experienced adult worker be fixed at a rate of €9.55 per hour - this corresponds to an increase of 3.2% in the national minimum wage from the current rate of €9.25 per hour;
- Provision should be made for the display of basic entitlements in all places of employment where the minimum wage is in operation to improve awareness of minimum wage, and employment rights entitlements more generally.
- The anomaly created by the sudden increase in the rate of employers’ PRSI from 8.5% to 10.75 % on weekly earnings of €376 be removed; and
- Recommendation 1 in regard to the national minimum wage was supported by six of the nine members on the Commission. A Minority Report was written by the three members of the Commission who have an employer background and who disagree with the view of their colleagues who are recommending an increase in the current Minimum Wage of €0.30 per hour; they would only support an increase of €0.20 per hour.
The membership of the Low Pay Commission is:
Dr Donal de Buitléir – Chairperson - Director of PublicPolicy.ie
Vincent Jennings – CEO Convenience Stores and Newsagents Association
Patricia King - General Secretary of ICTU
Gerry Light - Assistant General Secretary, Mandate Trade Union
Caroline McEnery Director - The HR Suite; HR & Business Solutions
Edel McGinley - Director, Migrant Rights Centre Ireland
Mary Mosse – Former lecturer in Economics, School of Business, Waterford Institute of Technology
Tom Noonan - Chief Executive, The Maxol Group, former President of Ibec, 2008–2010.
Prof Donal O’Neill - Dept. of Economics, Finance & Accountancy, NUI, Maynooth
The Commissioners examined a range of social, economic and labour market issues in considering the appropriate rate of the national minimum wage, including:
- the changes in earnings since the minimum wage was last increased
- changes in currency exchange rates
- changes in income distribution during the relevant period
- the unemployment and employment rates generally
- international comparisons, particularly with Great Britain and Northern Ireland
- the need for job creation
- the likely effect that any proposed increase would have on levels of employment and unemployment, the cost of living and national competitiveness.
The Report relies on data available in the period up to 3 July 2017 in making its recommendations.
In reaching its conclusions the Commission has also taken account of the following:
- The Irish economy is growing strongly, and the recovery has begun to reach all regions.
- The initial post-2012 recovery was export-driven, whereas domestic consumption and investment are continuing to make a much stronger contribution towards growth.
- There are significant risks to Irish economic performance in the international economic environment. In particular the decision by the United Kingdom to exit from the European Union will have a significant, unquantifiable, impact over the coming months and years. Some regions and sectors are particularly exposed to the volatility of sterling and will be affected disproportionately.
- The reforms of the United States taxation system proposed by President Trump have the potential to impact negatively on the Irish economy.
- Continued growth in employment, favouring full-time over part-time employment, and unemployment is at 6.3% (June 2017), close to what is generally regarded as ‘full employment’.
- Prices are stable or marginally lower over the last 12 months and inflation is projected to rise but remain low.
- The Department of the Taoiseach’s National Risk Assessment (NRA) 2016 conclusion that “Despite the recent strong performance of the Irish economy, the balance of risk to the baseline remains tilted to the downside”, and the ongoing macro-economic and fiscal risks highlighted in the April 2017 Department of Finance Stability Programme Update (SPU)
- The increasing costs associated with the housing market, in particular private rental costs in Dublin.
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