New minimum wage rate to be set before budget

The Government will set a new minimum wage before the budget.

Richard Bruton, minister for jobs, enterprise, and innovation, made the pledge yesterday just weeks before the Low Pay Commission is due to make its first report to the Government.

The current rate of €8.65 set in 2007 had been restored in July 2011 after the Fine Gael/Labour government reversed a €1 cut that was imposed by the previous government.

Speaking at the launch of a regional jobs strategy for Cork and Kerry yesterday, Mr Bruton said he expects the commission’s first report on a new rate before the end of this month.

And he gave his strongest indication yet that he would like to see the rate increase as the economic recovery continues and the economy’s capacity grows.

“We want peoples’ living standards to rise on a sustainable basis as we grow our economy so that all workers can share in the achievements,” he said.

The Low Pay Commission was set up last year to advise the Government on the appropriate minimum wage rate annually.

The establishment of an independently chaired commission was designed to take the politics out of setting the rate.

The nine-person commission is chaired by Dr Donal de Buitléir, the director of publicpolicy.ie, a former president of the Statistical and Social Inquiry Society of Ireland, and a former chair of the Foundation for Fiscal Studies.

He was a board member of the HSE between 2005 and 2009, and previously worked in AIB Group and in the Revenue Commissioners.

The other eight members, — who were appointed following a public advertisement through the Public Appointments Service — include union and employers’ representatives.

They have been examining employment rates, the cost of living, and competitiveness and have received some 13 submissions from individuals and 33 submissions from organisations.

Mr Bruton said he expects their first report — which will be evidenced-based and which will include a recommended new minimum wage rate — within a matter of weeks.

He said the Government will consider the recommendations and will make a decision on a new rate before the budget.

Business Minister Ged Nash — to whom the commission will report — can change the commission’s recommended rate but he will have to go before the Dáil and explain his decision.

The Irish Small and Medium Enterprises Association has warned against a rate increase, pointing out that previous increases in the minimum wage led to demands for wage hikes at other levels.

However, unions — including Mandate — have pointed out that the minimum wage has not increased since 2007.

Mandate has said that the current rate was set in 2007 at 40% of the national median wage which, if was applied today, would bring the current minimum wage rate to just over €10 an hour.

It is estimated that about 100,000 people, or 4.7% of workers, earn the minimum wage.

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