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Minimum-wage sectors hard hit by Covid-19 shutdown - ESRI

Retail, accommodation and food sectors employ half of all minimum wage workers in Ireland.

Image: Shutterstock/B-D-S Piotr Marcinski

MORE THAN HALF of Ireland’s minimum-wage employees work in the retail, the food sector, and accommodation – the sectors that has experienced widespread business closures due to the Covid-19 crisis.

Those who lost their job can claim the Pandemic Unemployment Payment, consisting of a flat rate of €350 per week. Minimum wage employees tend to work relatively few hours.

This means the Pandemic Unemployment Payment, as it currently stands, is higher than the gross weekly wage of most minimum wage employees. 

This week, Finance Minister Paschal Donohoe said that the wage subsidy and pandemic payment will continue “in some form” after mid-June, when it’s due to expire. 

Around 8% of employees are on the minimum wage in Ireland.

Compared to all employees, minimum wage employees are more likely to be women, work part-time and be in the 15-24 years age bracket.

The minimum wage can be a stepping stone to further employment, but some workers remain on this level of pay, and rely on other supports from the State.

A study by the Economic and Social Research Institute, published today, gives an overview of the minimum wage in Ireland over the last 20 years, and gives evidence of the impacts recent policy changes to the minimum wage.

Minimum wage increases in Ireland have not led to job losses among low-pay workers, but have resulted in some reductions in hours worked, the study found. 

The 2016 increase in the minimum wage led to reductions in wage inequality in Ireland and the minimum wage has been shown to be particularly important in keeping wage inequality low during a recession.

Dr Paul Redmond, author of the report, said that the Covid-19 crisis “has led to widespread disruption in the retail, accommodation and food sectors”.

“These sectors alone employ half of all minimum wage workers in Ireland, meaning low-paid workers may be disproportionately impacted by job losses in these areas.”

The key policy question over the next 12 months will be whether the minimum wage should be increased, decreased or remain the same. The evidence shows that minimum wage changes have little effect on employment.

“We also know that changes to the minimum wage impact wage inequality. These are issues that will need to be considered by the Low Pay Commission and policymakers in the coming months.”

Today, the charity Society of St Vincent de Paul (SVP) launched an urgent fundraising appeal, as it expects to be helping well in excess of 176,000 people in need this year.

Last year, the SVP helped 160,000 people and families. The charity expects an increased demand from new people who are struggling financially as a result of losing their jobs or living on reduced income due to the Covid-19 pandemic.

Donations to the SVP can be made through www.svp.ie by calling 1818 176 176.

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