Varadkar: Government to consider living wage proposals before summer recess 

The Irish Government will be 'among the early movers in adopting a national, mandatory living wage', said Tánaiste Leo Varadkar.

The Government will consider proposals on introducing a living wage before the summer recess, the Tánaiste has said.

Speaking on Tuesday as he gave the Edward Phelan Lecture at the Royal College of Physicians, Leo Varadkar said that he wants to see the commitment given in the Programme for Government honoured.

Around one in five Irish workers currently makes less than the living wage which now stands at €12.90, as calculated by the Living Wage Technical Group (LWTG).

The living wage rate is calculated by the LWTG based on research undertaken by the Vincentian Partnership for Social Justice. It establishes the average gross salary which will enable full-time (39 hours a week) employed adults (without dependents) across Ireland to afford a socially acceptable standard of living.

In his speech, Mr Varadkar said that he had just received a report he commissioned by the Low Pay Commission to examine and make recommendations on the best approach to establishing a living wage in Ireland.

He said that the Irish Government will be "among the early movers in adopting a national, mandatory living wage" and that he will bring a proposal to Cabinet before the summer.

"I intend to honour the Programme for Government commitment that we should do so," he said. "Opinion is divided on how to calculate it. I see merit in the basket of goods and services approach — that each year we would decide what is needed to achieve an agreed standard of living — but I also think that approach would be subjective. We would have inconclusive debates about what should be in the basket and how much should be in it.

"An alternative approach is setting the living wage as a percentage of the median wage. This approach is simpler and provides certainty.

"I expect to bring proposals to Government on how we can adopt a living wage before the summer recess."

Mr Varadar said that he was "very conscious that businesses in Ireland have endured a pandemic for two years and are now facing increased costs due to the war in Ukraine" and said that any reforms would have to be targeted and phased in, pointing to the UK example.

"In the UK, a targeted future living wage rate was set five years in advance. This is something we could do in Ireland. Companies would have the time to plan, prepare, and adjust.

"A living wage will be an important milestone for workers in Ireland."

The Tánaiste also used the speech to call for "a comprehensive anti-inflation strategy to reduce the cost of living" and said that central banks across the globe should "reign in quantitative easing".

Anti-inflation plan

Mr Varadkar said the anti-inflation plan should have six components. These include pay increases and "industrial peace", reducing the income tax burden on middle-income earners "so they can keep their pay rise if they get one", and strengthening laws to reduce insurance costs.

Mr Varadkar said that increased subsidies should be used to reduce costs of childcare and the Government should also look to reduce charges for healthcare, the cost of public transport and higher education.

"Other Europeans simply do not have to pay so much to see their doctor, attend a hospital, or buy medicines," he said.

"I do believe there should be pay rises and indeed further increases in pensions and welfare. I do not say that lightly.

"I also believe that it is a mistake to think that pay rises will solve the problem of inflation. Pay rises won’t bring down the price of anything. And pay rises could actually contribute to inflation and make the situation worse. That is why we have to look at these things in the round."