Plans to raise the minimum wage by linking it to average earnings are “hugely significant” for hundreds of thousands of low-paid workers.
On Newstalk Breakfast this morning, the Irish Congress of Trade Unions (ICTU) said the introduction of the new ‘living wage’ is “hugely significant and hugely positive.”
Government yesterday announced plans to replace the minimum wage with a living wage linked to 60% of media earnings in the economy.
If the plan was in place today, the living wage would be €12.17 per hour – nearly 16% higher than the current €10.50 minimum.
ICTU Head of Social Policy and Employment Affairs Dr Laura Bambrick told Ciara Kelly the plan will make a huge difference.
“Yesterday’s announcement was hugely significant and hugely positive,” she said. “We have a Government, at last, committing to fair and adequate wages.
“This living wage proposal will abolish hourly low pay. So, it is hugely significant not just for trade unions but the hundreds of thousands of workers on the lowest rung of the pay ladder.”
Dr Bambrick said the plan is based on a year and half of research from the Low Pay Commission.
“They have been looking at how other countries have done it because there is nothing original about what is being proposed today,” she said.
“So, to avoid financial shock and allow employers to move their payroll costs, they recommended phasing it over no more than five years and Government have come out and said four years.”
Dr Bambrick said ICTU will be pushing for a shorter run-in time – noting that German last week announced plans to bring it in within four months.
She insisted the change will not lead to further inflation.
“The reality is there are fewer than 140,000 workers that this is going to impact on,” she said. “It’s less than 7% of the workforce.
“What we are we doing with a living wage - very similar to a living wage – is we are introducing an income floor.
“The difference is, we’re making sure that those workers who are making your coffee this morning - but also those people that during lockdown stacked our shelves, worked in our care homes, emptied our bins and delivered - we are just saying if they do full weeks work, they’ll be able to afford all of the essentials of life.
“There’s a reason why I am not on the radio this morning going the minimum wage should be at €25 or €50. It’s getting to that sweet spot where they are adequate for the workers and sustainable for employers and everybody else.”