Rents are rising so fast in Ireland that some employers are buying up properties which they then subletting to workers in order to retain staff, it has been claimed.
The claim was made after a report revealed the rising cost of housing and living costs had pushed the living wage for a single full-time worker up to €12.30 per hour, 40c higher than last year.
The new rate, which has increased by 3.4 per cent, reflects the rising cost of rents and income taxes for full-time single workers in the State, according to the living wage technical group. If rents had remained stable in the last year, the living wage would not have increased in 2019, said a statement from the VPSJ (Vincentian Partnership for Social Justice) which conducts research into people’s minimum standard of living.
Rising rents continue to drive up minimum living costs with Dublin rents, which have increased by more than €90 since last year, now accounting more than half a person’s living costs. Rents outside Dublin are also rising with housing costs for a living wage worker increasing by at least 6.3 per cent in the past year.
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The group noted that aside from housing, there had been very little change in the overall living costs of a full time worker over the past year. While it reported a "notable rise" in home energy costs, which have risen by 5.4 per cent, there were only "minor increases" in other costs including home contents insurance. Modest drops in the cost of food, clothing and health insurance were noted. A reduction in the Universal Social Charged also increased net pay for a person earning the living wage, it said.
Rents are rising so quickly that in some parts of the country employers are investing in properties which they then sublet to employees to try and retain staff, chief executive of the Irish Society for Small and Medium Enterprises Neil McDonald said on Wednesday. Mr McDonald warned that employers were “putting themselves at odds with Revenue” and “potentially a big liability” by subletting properties to staff.
The crux of the problem is not wage levels but the cost of accommodation, Mr McDonald told RTÉ’s Today with Sean O’Rourke programme, adding that a further rise in wages would only make employment unaffordable for employers.
“There has to be active State intervention in the provision of affordable accommodation for people. We have to analyse why root costs of construction are so high, why our rate of construction is low, but we’re simply not building enough affordable accommodation for our employees at the rate at which those people need it.
Figures by the Central Statistics Office this week shows the unemployment rate for June 2019 remained unchanged at 4.5 per cent, down from 5.9 per cent at the same time last year. When seasonally adjusted, there were 109,700 people unemployed in June 2019, marginally higher than the 109,400 unemployed the previous month. Despite the rise in jobs, long-term unemployment remains a problem, Ireland still has a high proportion of jobless households and youth employment is still at 10.1 per cent.
The living wage is the average hourly salary a single full time worker needs to afford an acceptable standard of living. It was established in 2014 when it was calculated as €11.45 as part of an international set of figures reflecting the belief that individuals working full time should be able to earn enough to enjoy a decent standard of living.