Many EU workers not getting minimum wage boost

Increases in the minimum wage may not have made an overall positive difference to many workers across the EU, including Ireland, a report has found.

The report by Eurofound, the Dublin-based EU agency tasked with examining working conditions in the bloc, said its research shows workers "may not automatically feel the positive impacts of these changes in terms of income and reductions in wage inequality".

"This is because these increases can be offset by changes in taxation, that there are many groups of workers that do not avail of minimum rates; and, although women are proportionately more likely to work in minimum wage jobs, increasing the minimum wage may not mean closing the gender pay gap," Eurofound said.

Data from labour bodies in Ireland, as well as the Czech Republic France, Hungary, Lithuania and Slovakia, found non-compliance with statutory minimum wages is "much less frequently detected than other areas" investigated by authorities.

"While this might be because non-compliance with minimum wages is unusual, it could also be because it is difficult to identify such non-compliance," the Eurofound report said.

When Ireland’s 2016 rise of 6% was evaluated, it also revealed a negative impact on working hours, according to the report.

"In particular, workers on temporary contracts were faced with an average weekly reduction of 3.5 working hours," it said.

Ireland is only one of four EU countries with expert committees in place to help shape the new rates, along with France, Germany, Ireland and the UK.

The introduction of minimum wages in the late 1990s and early 2000s significantly reduced the gender pay gap among low-paid workers in Ireland, but had less impact in the UK, the report said.

Possible explanations for this are differences in compliance and enforcement in the UK being less effective for women than men, Eurofound said.

There have been wage increases for minimum and low-wage earners in most EU member states, with rises in statutory minimum wages in almost all countries since January 2018, including significant increases in Lithuania, Spain, Greece, the report said.