Plans to raise the minimum wage by linking it to average earnings are “extremely important” for hundreds of thousands of low-wage workers.
On Newstalk breakfast this morning the Irish Congress of Trade Unions (ICTU) said the introduction of the new ‘living wage’ is ‘hugely significant and hugely positive’.
The government yesterday announced plans to replace the minimum wage with a living wage tied to 60% of media revenue in the economy.
If the plan were in place today, the living wage would be €12.17 an hour, almost 16% more than the current minimum of €10.50.
The ICTU’s head of social policy and employment affairs, Dr Laura Bambrick, told Ciara Kelly the plan would make a huge difference.
“Yesterday’s announcement was extremely important and extremely positive,” she said. “We finally have a government that is committed to providing fair and adequate wages.
“This living wage proposal will abolish low hourly wages. It is therefore extremely important not only for the unions, but also for the hundreds of thousands of workers at the bottom of the wage scale.
Dr Bambrick said the plan is based on a year and a half of research by the Low Pay Commission.
“They looked at how other countries have done it because there’s nothing original about what’s on offer today,” she said.
“So, to avoid a financial shock and allow employers to shift their payroll costs, they recommended spreading it over a maximum of five years and the government announced four years.”
Dr Bambrick said the ICTU would push for a shorter break-in period – noting the German last week announced plans to introduce it within four months.
She insisted the change would not lead to further inflation.
“The reality is that there are less than 140,000 workers that this is going to impact,” she said. “It’s less than 7% of the workforce.
“What we do with a living wage – very similar to a living wage – is we introduce an income floor.
“The difference is that we are making sure that the workers who are making your coffee this morning – but also the people who during the lockdown have been stacking our shelves, working in our care homes, emptying our bins and delivering – we are just saying s If they work full weeks, they will be able to afford all the essentials of life.
“There’s a reason I’m not on the radio this morning saying the minimum wage should be €25 or €50. It’s about getting to that sweet spot where they’re adequate for workers and sustainable for employers and everyone else.