Tánaiste calls on employers to introduce ‘living wage’

New commission on low pay will advise Government on pay increases

Tánaiste Joan Burton has encouraged public and private sector employers to sign up to paying a “living wage” for workers as the economy begins to grow.

She said a wage-led recovery will benefit society by giving low-paid workers more spending power and reducing reliance on social welfare. But Ms Burton said moves towards a living wage should initially be based on an informal benchmark, rather than a legally enforceable level of pay like the national minimum wage.

“From an economic point of view, it would be a win-win,” Ms Burton told The Irish Times. “If people get a living wage, they have more spending power, more financial independence and can move away from welfare dependency. It benefits the family and the exchequer.”

A living wage is based on the amount an individual needs to earn to cover the basic costs of living.


Minimum wage

A coalition of groups says this is about €11.45 an hour, significantly above the minimum wage of €8.65 an hour.

Ms Burton said employers who have adopted the living wage in the UK have reported better staff retention, lower levels of absenteeism and increases in work quality. She said a new statutory low pay commission is to be established shortly, which will advise the Government on future increases to the minimum wage and other pay-related issues. The commission is likely to be modelled on a similar body in the UK, which has employer and trade union representatives.

Ms Burton said the minimum wage needs to be kept under review due to cost-of-living increases. Employers’ groups, however, have issued stark warnings against any increases in minimum wages.

Carl O'Brien

Carl O'Brien

Carl O'Brien is Education Editor of The Irish Times. He was previously chief reporter and social affairs correspondent