Delay in minimum wage could lead to industrial action, unions warn

The Government is “misreading the room” if it thinks slowing the pace of minimum wage increases will not prompt a backlash, Irish Congress of Trade Unions general secretary Owen Reidy has said.

Reacting to news that it would not reach Living Wage levels until 2029 – instead of 2026 as originally planned – Mr Reidy said there was already widespread scepticism the new commitment would be honoured given the decision to abandon the old one despite the ongoing strength of the economy.

“The Minister [for Enterprise], Mr [Peter] Burke needs to realise, and the Government needs to realise, if they are sending some kind of subliminal message to employers they can delay all this stuff, and employers who can afford to pay decent wages go along with that, then that’s going to lead to industrial action.”

Mr Reidy was speaking at an Ictu event on Thursday to mark the 25th anniversary of the introduction of the National Minimum Wage, which was originally set at £4.40.

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He said he would be outlining the scale of union concerns and anger over recent “U-turns” on wage hikes and other scheduled measures on issues such as sick pay when the two men held a scheduled meeting on Thursday.

Speaking on RTÉ’s Morning Ireland Mr Burke said “we are not pausing the minimum wage, there will be a significant increase in the minimum wage this year in line with the Low Pay Commission recommendation. What we are doing is lengthening the period of time we are taking to get to the Living Wage, which is 60 per cent of the median wage across the economy.

“We’re within striking distance of that [but] I know from the joint report we had with the Department of Social Protection that 75 per cent of minimum wage workers reside in hospitality and retail. These are very exposed sectors. So my core objective is to retain jobs.”

Ictu has argued that the scale of the threat posed to businesses is exaggerated.

Addressing the Ictu event, Paul MacFlynn, codirector of the Nevin Economic Research Institute, said all of the concerns raised at the time about the potential for negative impacts on unemployment levels, particularly among women and younger workers had proved to be unfounded.

“There have been none to be found in an Irish context,” he said.

“The national minimum wage has been a success in terms of what it was supposed to do: eradicate very low pay but that’s it. More skilled workers have continued to be able to maintain and improve wage levels, meanwhile, but there is a problem in the middle, among workers who relied on trade unions to negotiate on their behalf. That’s what we need to get back to.”

The National Youth Council of Ireland, meanwhile, reiterated its call for the Minister to abolish the sub minimum rates paid to workers under 20, which currently start at €9.45 compared the full National Minimum Wage rate of €13.50.

Speaking at the Ictu event, Mandate’s Caroline Clifford said the union could see no basis for the sub-minimum rates in retail.

“There are no apprenticeships in the sector,” she said, “so we don’t believe there is any justification for paying young workers any less than their older colleagues.”