Government to delay introduction of living wage until 2029

Enterprise minister Peter Burke confirmed the delay, but pointed out 'we have increased the minimum wage by 29% since January 2022'

Enterprise, tourism and employment minister Peter Burke. Picture: Conor Ó Mearáin/Collins

The Government is delaying the introduction of a living wage by three years, with the measure now due to be implemented by 2029.

Enterprise minister Peter Burke confirmed the delay on Tuesday, with the timeframe when the living wage was due to be introduced falling back from 2026.

“The aim is to achieve a living wage under the current Government by 2029,” Mr Burke said.

"At the moment, we have increased the minimum wage by 29% since January 2022. 

"We’ve seen significant increases year on year. I’d also point out that we’ve seen significant improvements in workers’ rights over that period of time as well.”

Mr Burke said it was necessary to push out the living wage from 2026 to 2029 to prevent a major required increase this year.

“If you look at this point in time, wage growth in our economy is around 3.5%, 4%.

Inflation is at 1.7%, so if we did not push out the achievement of the living wage until 2029, we would be in a position where we could see an increase of about 8%, 9% this year.

Mr Burke said such an increase would leave Ireland in a very “unsustainable position” to remain at full employment, particularly citing workers in retail and hospitality.

He said those two sectors are under particular pressure at present.

The living wage itself is set at 60% of the median wage of any given year, and would replace the existing minimum wage structure.

Currently, the living wage would be €14.75 per hour, while the minimum wage is €13.50 per hour.

Mr Burke confirmed the change while announcing the Government’s intention to accelerate and deliver a new action plan on competitiveness before the summer in response to US tariffs.

However, there will be no increase in the number of sick days for workers, with this due to remain at five rather than increasing to seven.

Mr Burke rejected assertions that the Government was rolling back on workers’ rights, saying there has been a “huge amount of improvements in employee support” in recent years.

He cited increases to the minimum wage, as well as the auto-enrolment pension system.

The new system has been delayed, however, but Mr Burke said this was for technical reasons.

What's your view on this issue?

You can tell us here

The scheme is due to launch later this year, but will not launch as scheduled in September.

On expanding Ireland’s trade, Mr Burke said the Government was committed to ratifying the Canadian-EU trade agreement in the months ahead.

Despite being struck down by the Supreme Court, the Government can make legal changes to allow its ratification.

“Over the last number of years, there has been a lot of hostility directed at free trade agreements, but we do know now how important they are,” the minister added.

Mr Burke pointed out that if the Transatlantic Trade and Investment Partnership — a trade deal between the EU and the US — had been agreed, then the EU could have been in a “very different situation now”.