Tuesday 6 December 2016

Are pay rises a price worth paying?

Seamus Coffey

Published 09/08/2015 | 02:30

The Low Pay Commission recommended a 50c increase in the minimum wage
The Low Pay Commission recommended a 50c increase in the minimum wage

The recently published report of the Low Pay Commission brought attention to the conditions of low-paid workers in Ireland. The Commission recommended a 50c increase in the national minimum wage to €9.15 an hour - but did so without any real justification for the increase, bar expressing the view that the increase "is unlikely to be significantly adverse".

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The report also failed to provide much in the way of international comparisons. Low-paid workers in Ireland are better off than their counterparts in almost all other countries. They are paid more, taxed less and are less likely to fall into poverty.

A low-paid worker is defined as someone who is paid less than two thirds of the national median wage. Ireland has the second highest median wage in the EU, therefore the low pay threshold used here is higher than in other countries.

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