ESRI: Minimum wage increases did not result in low-pay job losses

The size of the increases also didn't impact overall low-pay employment

The national minimum wage has increased every year from 2015 to 2025 from €8.65 an hour to €13.50 an hour. File picture

The successive increases to the minimum wage over the last decade did not lead to low-paid workers losing their jobs with the size of the increases also showing no bearing on low-paid employment, a new analysis by the Economic and Social Research Institute (ESRI) has found.

The national minimum wage has increased every year from 2015 to 2025 from €8.65 an hour to €13.50 an hour. The minimum wage was subsequently increased again at the beginning of this year to €14.15.

The largest percentage increase in the minimum wage in recent years came in 2024 when it was increased by 12.4% or €1.40.

The analysis, which was based on data from the Central Statistics Office Labour Force Survey between 2016 and 2025, found that there is “no evidence” that recent minimum wage increases in Ireland increased the likelihood of minimum-wage employees losing their jobs.

The report said while minimum wage employees “are generally more likely to become unemployed than higher paid workers”, the likelihood of this happening “did not increase following increases to the minimum wage”.

Author of the report, Paul Redmond, said it is important to monitor whether increases to the minimum wage result in negative employment effects for low-paid workers and in this study they found it “did not increase the likelihood of minimum wage employees losing their jobs”.

The level of increases to the minimum wage varied each year but regardless of the size of the increase the ESRI found that there was no pattern with respect to the magnitude of the minimum wage increase.

“In some years, the minimum wage increase was relatively large, while in other years it was small. However, larger minimum wage increases over this period did not coincide with a higher likelihood of minimum wage employees becoming unemployed,” the report said.

The ESRI did acknowledge that the minimum wage increases that it focused on for this study coincided with a period of strong economic growth and low unemployment.

“It is possible that similar policy changes could generate different outcomes if enacted during a period of weaker economic performance,” the report said.

Youth wages

The analysis also looked at the employment of workers in receipt of the sub-minimum youth wage rates and whether employees that “age into” a higher minimum wage are more likely to lose their jobs than young employees whose age, and wage, stay the same.

Under Irish legislation, employees under 20 can earn an age-based, sub-minimum youth wage. An employee aged 18 is entitled to 80% of the full adult minimum wage rate which increases to 90% when they turn 19.

They are entitled to the full minimum wage when they turn 20.

It found that young workers that “age into” a higher minimum wage band did not experience an increased likelihood of job loss following their birthday.

The report also noted that while youth minimum wage rates were rarely used in the past “there appears to be an increasing reliance on them by employers”.

It said that in 2019, 20% of employees under 20 years of age were paid a sub-minimum youth wage with that increasing to 30% last year.

“It is possible that employers are increasingly using sub-minimum youth wage rates to keep labour costs low as the minimum wage gets higher,” the report said.