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.
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.