Low-paid workers set for wages increase

Wage increases for the lower paid have been flagged for the new year, with more than 122,500 workers set to benefit after the Government indicated that it will back a recommendation by the Low Pay Commission.

Taoiseach Enda Kenny yesterday gave a veiled warning to the hospitality industry, in particular restaurant owners, not to hike up costs for customers if wages are increased.

A report by the Low Pay Commission states that there would be little to no effects on job numbers if the minimum wage was increased from €8.65 to €9.15.

Commission chairman Donal de Buitléir said its recommendation was a first step as part of its three-year remit. He said the commission would tackle some aspects of the low pay environment in future years.

It had previously been left to a minister, rather than an independent commission, to decide whether the minimum wage should change.

Its recommendation of boosting the minimum wage by 50c now looks set to be implemented under the next budget and will possibly be paid to workers as early as January.

The Government said an anomaly that would see wage increases push low-paid workers into higher PRSI brackets would also be addressed in the budget.

Opposition party TDs had warned that thousands of workers could be left out of pocket. Fianna Fáil said that those earning under €9.40 an hour — the cut-off point at which PRSI is paid — whose income rose to €9.60 would see their take-home pay cut by over €400 a year under the anomaly.

Some 4.4% of employees are on the minimum wage (70,400 people), two thirds of whom are women. Nearly 40% are under the age of 30.

The commission’s report concludes that the economy is recovering but that it is a two-tier recovery.

Three of the nine members of the commission wanted higher increases for minimum wage workers. Two wanted wages increased to €10 an hour, while a third wanted the hourly rate increased to €9.65.

Tánaiste Joan Burton admitted some people considered the 50c rise conservative, but said it would give low-paid workers an extra €1,000 a year in income. Ms Burton said she had already committed to the Irish Congress of Trade Unions that the commission’s recommendations would be implemented.

Ms Burton yesterday mentioned that some companies were paying a living wage, which is higher than the minimum wage for some sectors. However, no commitment was given on looking at this or implementing it in the remainder of this Coalition.

Jobs Minister Ged Nash pointed out that the commission recommendations meant that workers on €9.08 an hour would also see increases, resulting in a total 122,500 workers, or 9.1% of the workforce, benefiting.

Businesses and restaurants have warned that any pay rises could affect workforce numbers and specifically result in price hikes for customers.

Mr Kenny said that the restaurant industry is “thriving” and that people are having difficulties booking tables. He said businesses need to be aware that Ireland is going through a “fragile recovery”.

“They should not assume that it will always be that way,” he said.

Mr Kenny would not commit on when any price rise would be added to workers’ pay but that it would form part of the budget. He and Ms Burton said it would be sometime in the new year, depending on legislation and other factors.