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Low Pay Commission to examine increasing minimum wage by €2.10 per hour

An increase to the ‘living wage’ is in the programme for government.

Image: Shutterstock/Gena96

THE LOW PAY Commission will examine how Ireland can move towards a living wage, following authorisation by the Government yesterday.

A ‘living wage’ – currently deemed to be €12.30 per hour – is defined as the minimum income necessary for a single adult in full-time employment to meet their basic needs and afford an acceptable standard of living.

It is different from the current national minimum wage, which is €10.20 per hour.

The commission’s work will come on foot of a commitment in the Programme for Government to raise the minimum wage to the living wage during the government’s lifetime.

Tánaiste Leo Varadkar asked the commission to prepare a report on its work earlier this year, and its terms of reference for further examination were approved by Cabinet yesterday.

The commission will investigate how an increase to a living wage could compare internationally, as well as its impact on the cost of labour, social welfare, health, education and housing.

It will also consider he possibility of introducing lower supplementary welfare payments if a living wage were to lead to a decrease in poverty among working people.

In a statement yesterday, Varadkar said the Covid-19 pandemic had redefined the role of essential workers and how society should consider the value of their work.

“Traditionally, when we thought of frontline or essential workers, we thought of nurses, doctors, gardaí or firemen,” he said.

“Generally, people working in the public service with relatively well paid, secure and pensionable jobs. Now with think also of retail workers, drivers, security guards, transport workers and cleaners.”

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He added that the pandemic should produce a “more inclusive” society with better terms and conditions for lower-paid workers, noting that moving to a living wage would be a crucial part of that.

But Varadkar said there was a need for recognition that many businesses had closed due to Covid-19 and that the minimum wage must be raised in a way that was affordable for employers. 

Speaking on RTÉ’s Morning Ireland today, the Tánaiste explained that there were different ways of calculating a living wage and how it would be best suited to Ireland.

“We are going to work out is what model works for Ireland, over what period should it be phased in and should there be exceptions for businesses for example that can’t afford to pay,” he said.

He also suggested that minimum wage could increase this year, following a rise last year.

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