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VOICES

Opinion Under 20s aren't entitled to the national minimum wage, that has to change

A lower minimum wage for young workers is outdated, out of line with EU norms and potentially breaching employment equality legislation writes Dr Laura Bambrick.

THE MINIMUM WAGE is the lowest rate of pay an employer can legally pay their workers.

It is currently set at €10.50 for each hour worked but this rate only applies for workers aged 20 and older. The law guarantees younger workers just a fraction of the minimum wage.

For young adults aged 19 the wage floor is 90% the minimum wage (€9.45), for those aged 18 it is 80% (€8.40) and for workers aged 17 and under it is 70% (€7.35).

Some readers will no doubt be thinking that this is okay because young people aren’t generally responsible for the bills to run a home.

That they have fewer qualifications and are less productive. That they are not as reliable and they need more supervision. That paying them the full rate would bankrupt business and cost them their job.

These are the same arguments that were made in the 1970s in opposition to equal pay legislation. Today we would baulk at the idea of a business being permitted to have one rate of pay for men and another lower rate of pay for women who work side by side doing the same job. Yet we continue to condone this raw deal for young workers.

There is no justification for two people doing the same work and liable for the same taxes on their earnings being paid a different rate for the job just because of their age.

Thankfully many businesses voluntarily and by negotiation with trade unions pay young employees no less than the €10.50 hourly minimum wage. But it is unacceptable that the law allows pay discrimination by age and for good employers to be undercut by bosses benefitting from sub-minimum wage rates.

Living Wage

The minimum wage will soon undergo the biggest change in its 23-year existence. In anticipation of a new EU-wide law to ensure fair wages for workers across the bloc, government is at an advanced stage of planning to set a target for the minimum wage to equal 60% of the median wage and be replaced by a living wage.

The €10.50 minimum wage is currently 52% of median hourly earnings in the economy (€20.29).

Throughout our engagement on moving to a living wage, the Irish Congress of Trade Unions has been firm in our position that no worker should be paid less than a living wage.

Ireland is one of only four countries in the EU27 to continue to have age-based rates in their minimum wage for young adult workers. If the majority of member states are able to guarantee them the same minimum pay as older workers, why can’t we?

Equality Legislation

European employment equality law allows for age discrimination in minimum wages, but only if the discrimination fulfils a legitimate aim. Justification of the discrimination must be specific and based on evidence.

Conventional wisdom has it that a lower minimum wage for young people prevents them from dropping out of education because the pay is unattractive and prevents high levels of youth unemployment among those who do enter the workforce as employers are more willing to hire them.

But what is the evidence to support this, as required under EU law?

Taking an in-depth look, the ESRI found the effects of minimum wage policy on young peoples’ employment or continued education decisions to be “small and weak, and sometimes statistically insignificant”.

Next steps

The Low Pay Commission didn’t agree with the trade unions’ position and instead recommended that age-based rates be retained in the new living wage.

They did however recommend further research to examine the issue. Based on the findings they will make a recommendation for a government decision on retaining, removing or expanding lower minimum pay rates to young adult workers over 20.

The Irish Congress of Trade Unions has called for this to be done without delay. We will engage fully with the process and continue to press for a genuine living wage for all workers.

Dr Laura Bambrick is Head of Social Policy and Employment Affairs at the Irish Congress of Trade Unions. ICTU is the umbrella body for 45 unions together representing the interests of some 700,000 workers on the island in all sectors of the economy. 

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