The 80-cent minimum wage increase from €10.50 to €11.30 fails to accurately reflect the increased cost of living in Ireland, and will fail workers. While Ireland’s minimum wage is relatively high compared to many European neighbours, Ireland also stands next to Luxembourg as one of Europe’s most expensive country to live in, with prices reaching 140% of the European Union average. Luxembourg’s minimum wage ranges from €13-15 depending on skill level. While this is not a perfect example, it is a far more appropriate match to the cost of living.
The Irish government set guidelines for yearly minimum wage increases until 2026 earlier this year, after which they aim to have the living wage be 60% of the median wage for the nation. There are two key problems with this. Firstly, why is the goal set for a living wage equivalent to the guideline that currently defines the poverty line as set by the Central Statistics Office? In fact, what is formally set as the low pay threshold internationally is 66% of the median income, so not only have we not met our own goal, our goal is not even meeting the international standard. To meet this 66% benchmark, the national minimum wage should be closer to €15.22 an hour.
Furthermore, the solution to simply push back when we will achieve a fair living wage is unfeasible and hurting the Irish population. 4 more years is an incredibly long time to wait for a living wage for someone who is living paycheck to paycheck. These benchmarks are also set by 2022 standards, and the cost of living will likely be considerably higher only 4 years from now, rendering the changes obsolete.
“It wasn’t morally right for men and women to be paid differently when working alongside each other in the same job, so what changes when paying those of different ages differently?”
Additionally, the practice of a so-called sub-minimum wage is disgraceful and exploitative. Young workers can make as low as 70% of the minimum wage, tiered depending on age. This hurts an entire work ecosystem. Not only do students and young people attempting to set themselves up in the world make less than an appropriate amount to live on, but skilled adult workers also lose out on work opportunities when companies see places to cut back on the payroll. It wasn’t morally right for men and women to be paid differently when working alongside each other in the same job, so what changes when paying those of different ages differently? Ireland is one of only four countries in the EU27 to continue this outdated and unjust practice.
Circling back to the inadequacies of the 80-cent minimum wage increase, it is shown that even to simply compensate for cost-of-living increases, the minimum wage needs to increase by 9%, to over €14 an hour. The Irish Congress of Trade Unions (ICTU) General Secretary Patricia King even acknowledged the understood fact that no one can live simply on a minimum wage and that the gap needs to be filled through social provisions such as the working family payment. However, since this only provides for those with children, childless individuals and couples are left without.
A major reason the government is adopting slow increases in the minimum wage is apparently to help both parties contained in an employment contract and to not see a rise in loss of jobs from increased labour costs. However, through many studies, it is shown that on average a 10% increase of the minimum wage only amounts to 1-3% job losses, ultimately insignificant as we would be achieving figures closer to a living wage and the minimum wage for our cost of living counterpart. Furthermore, many businesses in Ireland already pay higher than minimum wage in order to have a competitive advantage, so essentially, increasing the minimum wage to an appropriate living wage is just taking a step to help the 10% already struggling in employment.
Recently more and more people have been advocating for a €15 an hour minimum wage that more accurately reflects the cost of living and inflation, including a People Before Profit (PBP) motion in the Dáil earlier this year.
“Those earning minimum wage, even sub-minimum wage, are feeling the most significant effects of the cost of living crisis, and yet those are the ones given subpar concessions. “
Essentially, by not increasing the minimum wage to reflect living costs, inflation, and other conditions, the value of the money earned by someone working minimum wage simply decreases year on year. While on paper they may be making more, they are able to afford significantly less with it. Those earning minimum wage, even sub-minimum wage, are feeling the most significant effects of the cost of living crisis, and yet those are the ones given subpar concessions.
In order to truly provide for the people in a time of higher-than-ever living costs and inflation, the minimum wage needs to be increased to reflect a true living wage at €15 an hour for all workers, not just those over 20 years old. To do any less is a signal of apathy toward those struggling in the nation.