Minimum wage a tool for equality but no panacea for poverty
John Fitzgerald: Ireland’s lower-paid workers are not always from poorest households
The minimum wage is effective at providing some protection for poorly organised workers with weak bargaining positions.
When a minimum wage was first proposed in Ireland in the late 1990s, there were concerns that it might do significant harm as well as good. Basic economics might suggest that, if wages go up employment will fall. However, many studies of minimum wages in other countries show that reality can be different from simplistic interpretation of theory.
With rising numbers of immigrants and low levels of unionisation across much of the private sector, there were real concerns that vulnerable workers were being exploited – something that the minimum wage could be effective at remedying. However, there were also concerns that a minimum wage could lead to significant job losses in low-income employment, leaving those let go worse-off.