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Dublin: 16 °C Tuesday 18 June, 2019

Rising rents have pushed the living wage up to €11.90 an hour

Despite rising housing costs, the price of food, clothing, health insurance and transport all fell in 2018.

Image: Shutterstock/Art Neli

THE 2018 LIVING wage has been set at €11.90 per hour, up from €11.70 last year.

The change to the annual living wage rate is determined by changes in living costs and taxation but experts have said that the increase has been primarily driven by the current housing crisis and the associated increases in rent levels.

The living wage is updated in July of each year and establishes an evidence-based hourly income that a full-time worker needs so that they can experience a socially acceptable minimum standard of living. It is described as an income floor, which allows employees to afford the essentials of life, and differs from the minimum wage which is not based on the cost of living.

The wage is determined by the Living Wage Technical Group (LWTG), comprised of researchers and academics.

A number of high-profile employers like Ikea, Aldi and Lidl pay their staff the living wage rate.

However, because Ireland does not have an independent body like the UK to keep a record of which employers are paying the living wage, there is “no way to know if enough employers take heed of the recommendations,” says Robert Thornton, a member of the LWTG.

In Dublin, rent now accounts for 49.6% of a single person’s minimum living costs while living wage workers outside of Dublin saw their housing costs increase by an average of 10.9% in the last year.

The LWTG  has said that if housing costs had not increased to such a degree the living wage rate would not have increased.

PastedImage-22074 Source: Living Wage Technical Group

Despite the rising housing costs, the LWTG found that the cost of the minimum essentials fell in the last year.

The cost of food, clothing, health insurance and transport all fell in 2018 with changes to the Universal Social Charge (USC) increasing the net pay for a person earning the living wage, when compared to 2017.

But the savings made here were wiped out by rising rents. The study found over the past year the overall cost of a socially acceptable minimum standard of living increased by an average of 2.5% for a single full-time worker without dependents.

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Adam Daly

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