The Government is committed to introducing a national living wage by January 2026, beginning with an 80 cent increase to the minimum wage next year. But as businesses struggle with higher operating costs, should the increases go ahead?
Many working people in retail, hospitality, transport and domestic waste collection would benefit from a minimum wage increase. Photograph: iStockOne of the legacies from the pandemic was the Government’s recommitment to introduce a living wage by 2026, replacing the current national minimum wage. This policy would go some way to recognising the contribution of the many indispensable frontline workers who earn the legal minimum rate of pay, or just above it.
Electric Picnic 2024 highs and lows: Kylie has an ‘absolute moment’, drink-laden plastic-cup missilesAs with any policy, it is important that decisions are based on facts and not soundbites. Firstly, the cold reality is that Ireland has a low-pay problem. Many are living in a low-wage Republic. One in five workers are low paid, a figure that has remained relatively unchanged in two decades, despite periods of boom and bust.
Secondly, what is the impact of minimum wage increases on businesses? The evidence is clear. In response to a parliamentary question, Minister A higher minimum wage is unquestionably good for workers, businesses and the economy. The Government has a decision to make, not just about a modest minimum wage increase, but about its vision for Ireland.
While the intent to improve workers’ conditions is commendable, the rapid pace and magnitude of these increases, along with many other costs, are pushing many businesses to the brink.from PWC shows that insolvencies are up 25 per cent in the first half of 2024, with retail and hospitality accounting for over half of all cases. This is no coincidence. These sectors, which employ 43 per cent of minimum wage workers, are especially vulnerable to labour cost increases.
The Expert Group on Future Skills Needs reports that 72 per cent of employers cite lack of work readiness among young recruits as a significant challenge. This underscores the vital roles that retail and hospitality play in developing our workforce. By eliminating these sub-minimum rates, we risk denying young workers the chance to gain skills and experience they need to succeed.
Retail-Excellence Low-Pay-Commission Dara-Calleary
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