Senator Ged Nash.
The Labour Party has proposed to the Low Pay Commission that the National Minimum Wage for 2019 should be €10.55 per hour this year, rising to €11.25 by 2020, and to link it to 2/3rds of median income.
The current rate is €9.80 an hour. The call was made in a submission by the Party’s Employment spokesperson Senator Ged Nash to the Low Pay Commission.
Sen. Nash explained: “Ireland has a problem with low pay with 22.5% of all workers (one of the highest proportions in the EU or OECD) in low paid employment. Work should always pay but the stark reality is that too many working families are reliant on welfare top-ups to make ends meet.
“The overall policy purpose of the National Minimum Wage should be to raise the incomes of workers so that no full-time worker is in what’s considered to be low paid employment.
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“In June 2000, the first statutory NMW rate was introduced and set at a level that corresponded to approximately two-thirds of the median average income. Eurostat defines ‘low pay’ as pay below two-thirds of median earnings.
“The original rate, and the proposition that it should be set at two-thirds of median hourly income was based on a recommendation by Ireland’s National Minimum Wage Commission in 1998.
“However, following on from this initial rate, the NMW (currently €9.80/hour) has failed to keep up with rises in median average rates.
“To provide dignity for working people Labour has advised the Low Pay Commission to gradually restore the link to median earnings over the next four years. This proposal would see the minimum wage hourly rate reach two-thirds of the median by 2023.
“Based on 2014 data (the year for which data is most recently available) the hourly rate of the NMW should reach approximately €13.45 per hour in four years time. Our analysis proposes that the 2020 rate should be €11.25.
“Small businesses that cannot afford to pay the rate have it open to them to use the ‘inability to pay clause’ which exists in the minimum wage law.
“The restoration process would see the NMW being raised to €11.25 in 2019, while steadily increasing the rate to reach 66% of median earnings by 2023.”
Senator Nash concluded:“Since it’s establishment in 2015, the Low Pay Commission has played an important function for low paid workers, delivering four successive annual increases to the minimum wage.
“It is high time government started to take the issue of low pay seriously. All full-time workers should be entitled to access the goods and services a citizen needs to live with dignity and to have a decent lifestyle.
“The best, most just and efficient way to achieve this goal is to provide for a decent hourly wage designed to keep pace with changes in hourly median earnings, and to make good the original ambition of those who framed the first statutory national minimum wage recommendation.”