Wage rises needed to combat energy price hikes, says union

Substantial flat rate pay increases are essential for low paid workers if we are to counter increased gas and electricity according to Mandate trade union general secretary John Douglas.

Mr Douglas was speaking on his way into Government Buildings today to participate in the national wage discussions.

“Mandate represents over 50,000 low paid workers in the retail sector and we know from our own members that they are really struggling to make ends meet," said Douglas.

“Today’s announcement for a 20% increase in gas prices, coupled with the announcement that electricity prices are to rise by 17.5% will have a devastating effect on low paid workers in particular.

“Retail employees and other low paid workers are being badly hit by the current inflationary trends as they spend a higher proportion of their income on essential items such as gas and electricity than better off groups.

“If the wage negotiations are to be productive and successful, it’s important that we assist those in society who need it most and the only way to do that is to provide flat rate increases for all workers across the economy.

“Until now wage increases received by all employees have largely been determined by the percentage rates agreed in social partnership. While this may seem fair, in practice it means that low paid workers get much smaller increases in their weekly wage than those on higher rates of pay, meaning that the gap between high earners and low earners continues to increase.

“A flat rate increase will help in some way towards lifting low earners out of fuel and food poverty whilst also compensating high earners for the increases in the basic necessities.”

Mr Douglas went on to say that Government should take anti-inflationary measures to protect low paid workers and the most vulnerable in society.

“At this particular time, it is vital that Government is creative in their endeavours to protect low paid workers whether that is a reduction in VAT for essential items or refundable tax credits for low paid workers.

Mr Douglas explained that because low paid workers now pay no or very minimal tax, further tax cuts cannot deliver meaningful increases for low earners.

In this context, Mandate is seeking reform of the tax system and the introduction of specific refundable tax credits for low paid workers, similar to the systems being operated in the UK and the United States.