Monday 26 September 2016

Labour: We'll hike minimum wage by €2 an hour

Published 17/12/2015 | 02:30

Ged Nash: wants to encourage employers to follow example. Photo: Tom Burke
Ged Nash: wants to encourage employers to follow example. Photo: Tom Burke

THE Labour Party is upping the ante on Fine Gael in the war over low-paid voters, by pledging to increase the minimum wage by more than €2 per hour if re-elected to government.

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The move, aimed at shoring up support among working-class voters, puts Labour on a direct collision course with Fine Gael, as the major Coalition party believes drastic increases in the minimum wage will negatively impact on small businesses. 

Labour’s election manifesto will pledge to ensure every worker in the country earns at least €11.30 an hour by the end of the next Dáil term.

The announcement follows Fine Gael’s plan to offer working parents welfare top-ups to ensure they earn at least €11.75 per hour.

However, Labour Business and Employment Minister Ged Nash rubbished Fine Gael’s proposal yesterday,  saying there is “no dignity” in giving welfare top-ups to low-paid workers.

Mr Nash also insisted that Fine Gael’s “working family payment”, which would see the State pay parents earning the minimum wage an extra €100 a week, will only benefit major corporations paying inadequate wages.

“If a situation was to emerge where there would be permanent top-ups for salaries for people in low-paid jobs, then there would be little incentive for employers to pay anybody arguably above the rate of the national minimum wage,” Mr Nash said.

In an interview with the Irish Independent, the minister also said Labour wants to pay all public sector workers the ‘Living Wage’ of €11.50 as part of a move to encourage businesses to follow the State’s example.

However, he insisted there will be no “Bertie Ahern-style bonanza” for the public sector, and Labour will not be pushing to increase politicians’ salaries.

The minster said the cornerstone of Labour’s election manifesto will be a promise to link the minimum wage to 60pc of the national median wage.

A similar proposal was announced when the minimum wage was first introduced in Ireland in 2000 but successive governments  never implemented the measure.

The median hourly wage stands at around €18.80 and Labour plans to incrementally increase the minimum wage to €11.30 if re-elected.

The Low Pay Commission, which was established by Mr Nash, will be tasked with examining the potential to link the minimum and median wages, based on economic conditions.

As of January, the national minimum wage will be €9.15 after the Low Pay Commission recommended a 50c increase.

The hike will see 124,000 low-paid works earn more, and means a person working a 40-hour week will be around €780 better off next year. This is due to the increase in the minimum wage and Universal Social Charge (USC) cuts combined.

"We have over the last year seen private sector pay increase by 3pc on average (but) we haven't seen an increase to the national minimum wage since 2011," Mr Nash said.

He said he was "happy to see" that Fine Gael agrees with Labour's principle that work should pay but said the parties are diametrically opposed on how this can be achieved.

"I don't believe it should simply fall at the foot of the taxpayer to top-up people's pay. People who are working full-time should enjoy a decent salary to allow them have a decent standard of living without having to have recourse to the State in perpetuity," the minister said.

"Someone who works hard for a living should have an expectation that their employers should be able to support them," he added. Mr Nash denied he was increasing the gap between private and public sector workers by promising the Living Wage to the public sector

"Government has a responsibility to lead on this and we would like to see others who can take their lead from Government and where they can pay their employees what might be termed the Living Wage," he said.

He said there is an "expectation" among public sector trade unions that their members will see their pay and conditions improve as the economy recovers.

"The economic situation is improving and clearly the public sector trade unions would like to see their members share in that economic recovery but we can't say definitively what the next phase is going to be," he said.

"We have to be prudent in how we manage the economy but I can say there will be no return to the Bertie Ahern-style bonanzas for anyone across this country," he added.

Mr Nash also insisted Labour will not call for increases in salaries for politicians if the party is returned to Government after the election.

"I don't think we will be angling for or looking for pay increases at all. It is a privilege to do this job and we will be looking for a mandate from our constituents to continue that job over the next period of time.

"Pay increases for politicians is not something I am countenancing or anybody in my party is countenancing," he said.

The Cabinet minister yesterday revealed he has ambitions to lead Labour in the future but said Tánaiste Joan Burton has his loyal support.

Mr Nash is among a growing number of Labour members expressing an interest in leading the party ahead of the next General Election.

Environment Minister and Labour deputy leader Alan Kelly also said he is interested in the top job should a vacancy arise.

And Public Expenditure Minister Brendan Howlin refused to rule out the possibility of running for the leadership if Ms Burton steps aside.

Communications Minister Alex White also did not rule out another run for the leadership.

Irish Independent

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