Taoiseach: minimum wage hike is modest but ahead of inflation

Employer representatives on Low Pay Commission disagree with proposals

Leo Varadkar: Modest minimum wage increases are sustainable.

Leo Varadkar: Modest minimum wage increases are sustainable.

 

Taoiseach Leo Varadkar described a planned 30 cent rise in the national minimum wage as “modest” but he said it is ahead of the rate of inflation and average increases in earnings.

On foot of proposals put forward by the LowPay Commission, the national minimum wage is to increase by 3.2 per cent to €9.55 per hour.

Speaking after the Cabinet approved the recommendation on Tuesday, Mr Varadkar said the proposals would translate into a €12 increase for those working a full 40 hour week. He said the increased rate would benefit at least 150,000 people who were often “the first to get up in the morning”. He said “modest” rises were the kind of increases that were sustainable.

Mr Varadkar said the cost would fall primarily to private sector employers in industries such as retail and hospitality.

He said they had more than five months’ notice before the increase took effect on January 1st, 2018.

The Taoiseach said there were a small number of people in the public sector on the minimum wage, such as home helps or those working indirectly for the State through Community Service Programmes.

The increase was backed by trade union figures on the Low Pay Commission but employer representatives disagreed with the recommendation saying they would only support an increase of €0.20 per hour.

In a minority report the three employer representatives argued that the proposed 30 cent rise was not “evidence-based”.

“In addition,it takes insufficient regard of the views of the people who will actually have to fund the proposed increase, namely employers, big and small, right across Ireland. ”

Tanaiste and Minister for Jobs and Enrterprise Frances Fitzgerald said increasing the minimum wage represented 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 of State for Disability Issues Finian McGrath said the move would be a step towards dealing with inequality in society, as well as a step towards improving the working conditions and wages of low-paid workers.

He said“€12 a week is a substantial amount of money for people who are in that situation, but of course we also have to aim higher.”

In a statement following the announcement, employers’ group Ibec said the increase was not justified and warned that it came at a time when businesses were exposed to competitive threats from Brexit.