Minimum wage employees are working less but earning more

Minimum wage employees are working less but earning more

The hours worked by employees on the minimum wage fell by almost one hour per week — but increases in the minimum wage were sufficient to offset any earnings loss. Stock picture 

Workers on the minimum wage are earning more and working about an hour less per week than they did three years ago, a new study has found.

From 2016 to 2018, the minimum wage has increased three times — from €8.65 to €9.55 per hour. 

The ESRI conducted a study, funded by the Low Pay Commission, to examine the cumulative effect of these minimum wage increases on the hours worked. 

Drop in hours offset by rise in hourly pay 

The findings show that, over the same period, the hours worked by employees on the minimum wage fell by almost one hour per week but the minimum wage increases were large enough to offset any earnings loss due to the reduced hours.

The effect on hours worked was greater for employees in certain sectors. Those in the “industry” sector, mainly manufacturing workers, saw a reduction of three hours per week over the 2016 to 2018 period.  Likewise, those working in accommodation and food saw a reduction of 2.5 hours per week. 

Report author, Paul Redmond, said that, as the minimum wage increases, it is important that the impacts on employment are monitored: 

Our research has found a small reduction in hours worked among all minimum wage employees following three recent minimum wage increases. 

"However, those working in manufacturing and in accommodation and food experienced a larger reduction in hours," he added.  

"Despite this, the minimum wage increases appear to be large enough to offset any decline in earnings due to working fewer hours.” 

Increasing understanding of the impact of pay increases

Ultan Courtney, chairperson of the Low Pay Commission, said the report will increase our knowledge and understanding of the impact and effects of increases in the national minimum wage. 

"I am pleased to note that the report finds that the average minimum wage worker was financially better off as a result of increases in the national minimum wage, with the increases recommended by the Low Pay Commission large enough to offset any effects of reduced hours," he said.

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