Trade unions call for quicker rollout of living wage in Ireland

From early 2023, the current minimum wage of €10.50 per hour would replaced by a living wage amounting to €12.17 per hour

Under the Government's proposal, the living wage would be calculated as being 60% of median wage in a given year.

The Irish Council of Trade Unions (Ictu) has called for swifter implementation of the new living wage announced by the Government on Tuesday.

From early 2023, the current minimum wage of €10.50 an hour would replaced by a living wage amounting to €12.17 an hour. By 2026, this would increase to €13.70 an hour.

Under the Government's proposal, the living wage would be calculated as being 60% of median wage in a given year.

Announcing the plan, Tánaiste Leo Varadkar said better terms and conditions for employees "must be one of the legacies of the pandemic". 

"The living wage will build on the programme of improvements we are making, from introducing mandatory sick pay, to auto-enrolment for pensions, to putting in place the laws, regulations and infrastructure to give people more flexibility over how and where they work," he said.

Ictu head of social policy and employment affairs Dr Laura Bambrick said the phased replacement of the minimum wage over the next four years would be a "hugely significant and positive move for hundreds of thousands of workers".

Ictu head of social policy and employment affairs Dr Laura Bambrick. File Picture

However, she said there needed to be an option to "speed up" the process, particularly in light of the current cost of living crisis, the extent of which may negate the proposed wage increase for workers.

Dr Bambrick said the Government's plan was similar to schemes already operating in other countries and was the result of extensive research.

She said Germany had “thrown a spanner in the works” last week, by announcing the introduction of a living wage increase within four months.

Asked if the introduction of the living wage would lead to increased costs as employers passed on the increase, Dr Bambrick said fewer than 140,000 — or 7% of the workforce — would benefit from the scheme.

"The reality is that the introduction of the living wage means that people who work a full week would now be able to pay their bills," she told Newstalk Breakfast.

The challenge for Government was “finding that sweet spot” where there was a benefit for employers as well, she added.