Minimum wage slashed gender gap for low paid

The introduction of the minimum wage in Ireland almost 20 years ago slashed the gender pay gap for lower paid workers but not in any other wage levels.

That is according to a report by the Economic and Social Research Institute (ESRI) examining the impact of the introduction of the national minimum wage on the gender pay gap when it was introduced in Ireland and the UK.

In April 1999, a national minimum wage of stg£3.60 per hour was introduced in the UK. One year later, it was set at IR£4.40 per hour in Ireland. The level of the minimum wage, as a proportion of the average wage, was comparable in the two countries.

The report found that there was a large decrease in the gender wage gap for low-paid workers in Ireland. However, no significant changes were observed at other wage levels.

The study points out that, before the introduction of the Irish minimum wage, men’s wages were 24% higher than women’s wages among the lowest paid 10% of workers. After the introduction of the minimum wage, this gap had reduced to 5%.

However, almost no decrease in the gender wage gap was observed for the lowest bracket of workers in the UK following the introduction of the minimum wage.

Karina Doorley, co-author of the ESRI study, said the introduction of the minimum wage in the UK was less effective in tackling the gender wage gap than the Irish minimum wage due to different patterns of compliance.

“Overall, compliance with minimum wage legislation was high, around 95%, in both the UK and Ireland around its introduction and remains high today,” she said.

“However, in the UK, most of those earning less than the minimum wage after its introduction were women while, in Ireland, men and women were equally likely to experience minimum wage non-compliance.

“Enforcement of the minimum wage for women or in female-dominated professions appears to have been less effective than for men in the UK.

“The results of this study indicate that the gender wage gap for the low paid may be effectively reduced by a national minimum wage, provided that compliance is high and is not different by gender,” said Ms Doorley.