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Minimum wage workers disproportionately affected by pandemic disruption, says ESRI

With cost of living taken into account, Ireland has just the seventh-highest minimum wage in Europe.

Minimum wage workers are more likely to be employed in sectors affected by closures like hospitality.
Minimum wage workers are more likely to be employed in sectors affected by closures like hospitality.
Image: Sasko Lazarov

YOUNG MINIMUM WAGE workers in Ireland are likely to have suffered more as a result of pandemic-related employment disruption than their European peers, according to the Economic and Social Research Institute (ESRI).

A new study by the institute suggests that 43% of minimum wage workers here are involved in sectors disproportionately affected by job losses and closures in the past year, including accommodation, food services and retail. 

This is higher than in any of the other 13 European countries analysed as part of the study, the institute said.

Ireland also had the highest incidence of young workers on the minimum wage. Some 41% of minimum wage workers in Ireland are aged between 18-29, followed by France at 31.9%.

“Public health measures across Europe, and the world, have led to business closures, with accommodation, food, and retail being hit particularly hard. Therefore, minimum wage employees are likely to suffer disproportionately from job losses arising from the pandemic,” according to the report’s authors.

Our analysis suggests that minimum wage workers in Ireland may be more susceptible to negative employment outcomes due to Covid-19 public health measures compared to minimum wage workers in other countries.

At €10.20 per hour, Ireland’s minimum wage is the highest among the 21 European countries, including the UK, that have statutory minimum wages in place.

But when the cost of living is taken into account, Ireland is “just the seventh-highest”, behind Luxembourg, Germany, the Netherlands, Belgium, the United Kingdom and France, the ESRI says.

According to the study, which is based on data from 2017 and 2018, 9.6% of Irish workers are in receipt of the statutory minimum wage, slightly below the 10.5% average observed across the 14 countries.

Gender split

Gender, residence status and level of education all factor into the composition of the minimum wage workforce, according to the report.

“In 12 of the 14 countries studied, women are statistically significantly more likely than men to be on the minimum wage. Ireland and the Netherlands are the only two countries where there is no gender effect,” the ESRI says.

Non-nationals make up 13% of Ireland’s total workforce but at 20%, they are “disproportionately represented” among the ranks of minimum wage workers here. 

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Ireland had the highest-educated workforce among the countries included in the study. 

“Of all employees in Ireland, 56% are educated to post-secondary or tertiary level. At 46%, Ireland also has the highest percentage of highly educated minimum wage employees,’ the ESRI highlights.

However, workers with a third-level degree are eight percentage points less likely to be on the minimum wage than those “with lower secondary (or less) education”.

Meanwhile, just 11.4% of minimum wage workers in Ireland were at risk of poverty — the lowest rate in all countries studied. At the opposite end of the spectrum, higher figures were observed in the Netherlands (46%), Luxembourg (41%) and Spain (35%).

Dr Donal de Buitleir, Chairman of the Low Pay Commission, which funded the research welcomed the report, which he said “increases our understanding of the serious impact of the Covid-19 pandemic on minimum wage workers in Ireland.

“It shows that of the countries studied we have the lowest percentage of minimum wage workers that are at risk of poverty and that, unlike other member states where women are heavily over-represented among minimum wage workers, in Ireland the gender composition was roughly 50/50.” 

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