Monday 24 October 2016

Some 70,000 low paid workers in line for 10c pay boost due to hike in minimum wage

Anne-Marie Walsh Industry Correspondent

Published 19/07/2016 | 13:13

The hike in the minimum wage is worth 1.09pc (Stock image)
The hike in the minimum wage is worth 1.09pc (Stock image)

Some 70,000 workers are in line for a pay boost as the €9.15 an hour minimum wage is set to rise by 10 cent an hour.

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A recommendation by the Low Pay Commission to increase the statutory pay rate was presented to cabinet today.

The Department of Jobs, Enterprise and Innovation said a majority of members of the commission recommended that the national minimum wage should rise to €9.25 an hour in its second report.

Minister for Jobs, Enterprise and Innovation, Mary Mitchell O’Connor, said she brought the commission’s recommendation to government earlier today.

She said it “will be considered in detail in the context of Budget 2017”. 

The hike in the basic statutory wage is worth 1.09pc.

The last time the minimum wage went up, it rose by 50c.

Unions are likely to be disappointed by the increase as they were seeking an increase in the hourly rate to €11.50 an hour. They believe this is the minimum required to maintain a basic standard of living.

Ibec argued that the minimum wage should not increase at all, particularly in the wake of Brexit.

The Small Firms Association condemned the increase and said there was an urgent need to control costs "in light of Brexit".

Acting Director, Linda Barry, said small firm owner-managers have identified wage inflation as the biggest threat to their businesses in the coming year.

"The recommendations of the Low Pay Commission are out of touch with the reality that these businesses are facing," she said.

She said extra cost pressures will put jobs in jeopardy at vulnerable firms.

The Programme for Government commits to increase the minimum wage to €10.50 by 2020.

The Low Pay Commission is set to report on sub-minima rates for younger people and the reasons behind the fact that most workers on the minimum wage are women later this year.

Labour Spokesperson on Workers' Rights and former Minister of State for Business and Employment, Ged Nash, described the proposed 2017 rate as "disappointing".

He said his increase in the minimum wage rate that took effect this year meant a single worker who works a full week is almost €800 better off.

"As a result of this recommendation, if accepted by government, the future for those on low pay looks less bright than it ought to be," he said.

He said the increase falls well short of anticipated average earnings growth  this year following "stellar employment and economic growth".

Mr Nash said those who predicted the demise of the retail and hospitality sectors as a consequence of this year's 6pc increase in the minimum wage rate have been proven wrong.

UNITE Regional Secretary Jimmy Kelly said the pay rise was "insulting" and the lowest paid workers would suffer a real pay cut after inflation when profits in some low-paid sectors are soaring.

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