THE MINIMUM wage in Ireland is not as generous in relative terms compared to other countries when it was adjusted to reflect purchasing power based on the cost of living here, according to new EU research.
A new report on minimum wage levels throughout Europe drawn up by the European Commission’s statistical office, Eurostat, shows the minimum wage in Ireland in January 2009 was €1,1462 per month.
This was second only to Luxembourg in the league table of minimum wage levels. In Luxembourg the minimum wage level was €1,642 gross per month.
A number of Cabinet Ministers recently highlighted the fact that Ireland had the second highest minimum wage level in Europe in the controversy that followed comments by Minister for Finance Brian Lenihan who said this might have to be examined if it was seen as an impediment to job creation.
However, according to the new Eurostat report when adjustment is made for purchasing power in different countries, the position of Ireland falls to sixth in the league table.
When purchasing power is taken into account the minimum wage is Ireland is calculated at €1,152 per month. This places Ireland behind Luxembourg, the Netherlands, Belgium, France and the UK. The Eurostat report says that when expressed in purchasing power terms the Irish minimum wage is €2 per month behind the level in the UK of €1,154. For France the figure is €1,189, for Belgium €1,254, for the Netherlands €1,336 and for Luxembourg €1,413.
The report also says that in terms of minimum wage levels as a percentage of the average gross monthly earnings in industry and services Ireland is also in sixth place in the league table .
It says that based on 2007 data the minimum wage in Ireland was 43 per cent of the average gross monthly earnings in industry and services.
Mr Lenihan caused considerable controversy last month when he said: “The minimum wage issue has been under debate in recent months.
“Clearly if the minimum wage becomes an impediment to job creation the Government has to look at it”.
“It’s not that clear, by the way, that the minimum wage in general poses an obstacle to job creation but there is a danger that, if it poses an obstacle to particular sectors of the economy, it will have to be addressed in that context.”
Minister for Foreign Affairs Micheál Martin said that there was no proposal “as of now” to cut the minimum wage, but that its future should be open to discussion.
Minister for Health Mary Harney said that we had to be mindful of the consequences the level of the minimum wage had for the generation and maintenance of jobs. In the services sector, she said, many small restaurants were finding it very difficult to hire staff and make a return on the wage levels they have to pay.