BUDGET 2016: Labour TDs hail 50c hike in minimum wage as victory

Labour TDs have hailed a 50c increase in the minimum wage as a major victory, despite trade unions pushing for a bigger boost to €10 an hour.

The Cabinet agreed to set the new rate at €9.15 an hour in line with the recommendation of the Low Pay commission which Tánaiste Joan Burton battled to have established.

While union and migrants rights’ voices on the commission issued a minority report calling for a larger than 50c increase, Labour deputies said securing the rise was an achievement following on from restoring the cut to the rate imposed by the previous Fianna Fáil-Green administration.

Ministers say the move will impact on 122,000 workers when it comes into force in January.

Some groups representing small firms warned the move could affect the number of hours being offered to low-paid workers

Small business minister Ged Nash said the move would aid job creation.

“This is a rise of 5.8% for the lowest paid in our economy. Some 120,000 low-paid workers can expect to see an increase in their pay packets as a result of this increase alone,” said the Labour Party minister.

“Those working full time will see more than €1,000 of a pay rise on an annualised basis.

“As a result, by the year’s end we will have twice increased the minimum wage since entering Government, increasing the pay of a full-time worker on the minimum wage by €60 a week, or more than €3,000 a year.”

Meanwhile, Enterprise Minister Richard Bruton said measures announced in the financial package would lead to reduced unemployment.

“This is a great budget for jobs, a series of tax changes that I have argued for, which will make a real improvement for start-ups and growing businesses.

“These include cuts to the USC for middle-income earners, changes in tax treatment for the self-employed, reduced capital gains tax for business and a new, best-in-class knowledge development box will encourage more people to start a business and create jobs,” he said.

On coming to power in 2011, the Coalition reversed a €1 cut in the minimum wage imposed by then taoiseach Brian Cowen, restoring the amount to €8.65 an hour.

The report by the Low Pay Commission said it did not believe a new increase to €9.15 an hour would lead to job losses.

The commission also found that while inflation has been relatively low, the minimum wage had effectively remained at its present level for the past eight years.

On taking over as Labour leader from Eamon Gilmore in July 2014, Ms Burton made the creation of the Low Pay Commission one of her priorities, along with enhancing trade union rights and putting a greater government emphasis onto housebuilding.

Some in Fine Gael privately pushed for the minimum wage rate to be untouched, fearing it would disproportionately impact on small firms.

Sinn Féin’s Aengus Ó Snodaigh said the Government had done little to help low-income families.

“Struggling low-income families have been offered a paltry €3-€6 by Labour-Fine Gael. A meaningless gesture that is insulting to these families who have suffered enough and shouldered the burden of austerity, when considering the cuts they have borne and the introduction of water charges, property tax, and inflation. Where is the fair recovery for them?” he said.

The National Youth Council of Ireland criticised the Government’s failure to reverse cuts in the dole imposed on people aged below 26 in 2013.

“The NYCI proposed the restoration of the full adult rate of €188 for young jobseekers under 26 who participate in initiatives such as the Back-to-Education Scheme, Solas-funded training and JobBridge,”said NYCI president Ian Power.