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Dublin: 10 °C Tuesday 19 November, 2019
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The UK's minimum wage has just gone up...

Only by 20p though. Is Ireland about to follow the UK’s example? And by how much if so?

shutterstock_156026588 Source: Shutterstock/Lisa S.

IT’S BUDGET DAY today in Britain and with just seven weeks to go until the UK general election, the budget is quite a political one (well, more so than usual).

One of the more contentious issues covered in the financial programme announced by Chancellor of the Exchequer George Osborne is an increase in the UK’s national minimum wage.

UK Low pay commission How the UK minimum wage has increased in recent years Source: UK Low Pay Commission

The earning threshold has increased by £0.20 to £6.70, or €9.25 at current exchange rates, an increase of just 3%.

This leaves it roughly €0.60 per hour ahead of Ireland’s low-pay limit which stands at €8.65.  Before the increase the UK’s wage was the equivalent of €8.98 which still outstripped our own by some 4%.

The increase may seem small but, as David Cameron and Nick Clegg are happily telling anyone who’ll listen, it’s also the biggest increase in the minimum wage seen in the UK since 2008.

Cameron earlier said the wage hike would offer ‘more financial security’ to workers.

This increase in the low pay threshold was finally rubber-stamped following the establishment of a Low Pay Commission in the UK, something which also recently happened here.

Budget 2015 UK Chancellor of the Exchequer George Osborne Source: PA Wire/Press Association Images

Workers’ union SIPTU have been campaigning for an increase in the minimum wage here to €11.45.  These calculations have looked at the cost of living as opposed to the consumer price index (CPI) for benchmarking.

Much of the criticism of the union’s suggestion has come from Irish small business owners, who claim that any increase in the minimum wage would have catastrophic consequences for Ireland’s small firms.

However, given the election-driven Irish political climate at present and today’s hike in Britain, an increase in our own minimum wage may be imminent, something Mark Fielding, chief executive of the Irish Small and Medium Enterprise association (ISME) acknowledges to be the case.

fielding ISME CEO Mark Fielding Source: ISME

Speaking to TheJournal.ie Fielding bemoaned the fact that Ireland has a minimum wage at all.

“We’ve never been in favour of a minimum wage, a minimum income is the way forward,” he said.

We just hope that when looking at this the duality of the economy is fully accounted for, i.e. that every action has a reaction somewhere along the line.

Fielding acknowledged that an increase in our minimum wage is now ‘more than likely’ although he still hopes it will be ‘proportionate’.

We don’t want to end up like in 2007, an increase of 13% and Ireland standing on the edge of a precipice, we need businesses to be able to stomach the increase.
You also have to recognise knock on effects – if someone gets a wage increase, those on higher wages won’t be long wanting similar hikes for themselves.

Fielding is derisory about SIPTU’s call for an increase of nearly €3 to wage.

“We would say that from 2000 up to the present day €8.65 is ahead of the cost of living – the unions want to be in line with cost of living, well at the moment we’re ahead of it by about a euro, “he said.

If our wage goes up to €11.45 there won’t be many small businesses around to pay it.
It’s just an opening gambit, though a big one.  We’re not down in Ballinasloe Horse Fair now, spitting on our hands and making ridiculous deals.
Anyway, that figure is derived using a cost of living calculation, one that factors in €60 a week or thereabouts for ‘entertainment’, which is madness.
I won’t deny I make a little bit more than the minimum wage at the moment and I’m not sure that I could afford that amount of entertainment every week.

Read: What is the least money you should get for an hour’s work?

Read: Truck drivers given new minimum wage in Germany – even if they’re just passing through

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