Thursday 17 October 2019

Ibec blasts Living Wage as 'fundamentally flawed concept' as it increases by 20c to €11.70

The technical group found that weekly housing costs in Dublin increased by €15.92
The technical group found that weekly housing costs in Dublin increased by €15.92
Louise Kelly

Louise Kelly

Ibec has said that the ‘living wage’ is a fundamentally flawed concept and is the wrong way to address cost of living pressures.

According to the group that represents Irish business,the concept of a 'living wage' does not take any account of a business’s ability to pay.

The comments follow the increase in Living Wage in Ireland for 2017 by 20c to €11.70.

According to the Living Wage technical group, who set the research-based figure, the current housing crisis and associated rent levels has been the main driver for wage rate increasing this year.

"If an enterprise is to stay in business, it must keep customers; wages must be set against the price that the business can charge those customers for goods and services," Ibec Director of Employer Relations Maeve McElwee said.

"Housing costs and rent make up much of the calculation of the ‘living wage’ concept. These very high costs are a result of failures of public policy over many years. It is entirely unreasonable to expect individual employers to bear the cost of these.

"With high levels of youth unemployment, we must also take great care not to price young people out of a job. Obliging employers to offer an unrealistic wage for entry-level jobs is yet another barrier to deciding to take on a young person."

The Living Wage for the Republic of Ireland was established in 2014, and is updated in July of each year.

It is defined as a wage which makes a minimum acceptable standard of living possible.

Read more: Work has yet to start on 23,000 homes in capital which have permission

The Living Wage is distinct from the minimum wage which is set by the Government's low pay commission and currently stands at €9.25.

The 20c increase was calculated based on a number of drivers: food costs and health insurance costs, reduction in the Universal Social Charge decreased weekly minimum expenditure but rising housing costs outweighed these decreases.

The technical group found that weekly housing costs in Dublin increased by €15.92 and €12.57 in other cities across Ireland, while towns and rural areas saw an increase of between €6.14 and €6.64.

The Living Wage technical group is made up of researchers and academics and is conducted by the Vincentian Partnership for Social Justice (VPSJ).

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