Wednesday 26 October 2016

Wage increases were hard-earned and restore dignity to the Irish workforce

Ged Nash

Published 22/07/2015 | 02:30

Commission chariman Donal De Buitleir and Social Protection Minister Joan Burton launch the report. Photo: Gareth Chaney/Collins
Commission chariman Donal De Buitleir and Social Protection Minister Joan Burton launch the report. Photo: Gareth Chaney/Collins

Yesterday was an important day for the low-paid in this country. For the first time, an independent body outside of party politics produced a report on what the minimum wage should be.

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The Low Pay Commission, which I set up earlier this year, is recommending that the National Minimum Wage be increased by 50 cent to €9.15 per hour. It has examined evidence, taken submissions and consulted directly with those who are on the minimum wage and those who pay the minimum wage.

Already, there is widespread disagreement on the figure. For some business representative groups, it is too high and they are already making sweeping statements that it will cause jobs to be lost and competitiveness to be eroded and will stymie job creation.

For some others, including some who sat on the Low Pay Commission, it is not high enough.

To both sides, I say look at the facts. The Low Pay Commission was tasked with examining the evidence, taking into account changes in earnings, employment and unemployment rates, competitiveness, currency changes, income distribution and the expected impact that any changes in the minimum wage would have.

The commission, chaired by Dr Donal de Buitléir, has concluded that moderate increases in the minimum wage would not impact negatively on employment, on competitiveness or on the cost of living.

I said when I was given the task of setting up the Low Pay Commission that while I did want to see the national minimum wage increase, I would not jeopardise job creation in doing so.

As a result of what the Low Pay Commission has recommended, some 122,000 people who are currently on the minimum wage or just above it will see their pay packets increase.

For those who are working full-time, they will see their wages increase by more than €1,000. That is a significant amount and will make a real difference in their and their families' lives.

The Government has committed to addressing issues surrounding PRSI for both workers and employers in the upcoming Budget to ensure that increases are directly felt in the pockets of workers, and not taken away by the 'absurdities' of the PRSI system, as the Low Pay Commission Report put it. But it also wants to ensure that employers are not overly affected by higher PRSI rates kicking in.

It has been a really tough few years for many businesses - as the minister with responsibility for small and medium-sized businesses and retail, I am very well aware of that. Some of these businesses will not welcome any increase in the minimum wage. But we should bear in mind that the minimum wage has not risen beyond €8.65 in eight years.

In fact, the previous Fianna Fáil Government cut the rate, under pressure from the Troika and the business lobby in Ireland.

Those vested interests claimed that jobs would be saved and indeed others would be created by a €1 cut. There is no evidence whatsoever that this cut saved jobs. All it did was further impoverish people who were already struggling to make ends meet.

There is also no evidence to back up claims now by certain lobby groups that jobs will be lost.

I'm very proud to be part of the Government that reversed that cut in 2011 and now will once again increase the minimum wage, early in the New Year.

The facts show clearly that the business environment is improving. As a result, I want to see a balanced economic recovery.

By that, I don't just mean that recovery has to spread to the four corners of Ireland, but rather it has to be felt in a meaningful way in the pockets of every citizen and in every single household.

This week people who are on low pay in Ireland can look forward to the future with more optimism than they could even a year or two ago.

That is not only because of the new recommendation for an increase in the minimum wage, but also because of new laws which passed in the Houses of the Oireachtas last week.

The Industrial Relations amendment bill provides for new collective bargaining laws in Ireland and also for new sector-specific wage-setting mechanisms which can be used to develop better pay, terms and conditions across the economy in partnership with employers.

We as a Government could have chosen to use the 'excuse' of the recession and our fragile economy to put low pay and employment rights legislation on the long finger and let the market find its so-called natural level.

But, uniquely in the developed world, we are doing the exact opposite, because we recognise the dignity of work and the need for dignity at work, including better pay.

Ged Nash is Minister for Business and Employment

Irish Independent

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