Low Pay Commission recommends increase in National Minimum Wage of 50 cent to €9.15

Taoiseach, Tánaiste, Minister Bruton and Minister Nash welcome report publication

21st July 2015

The Low Pay Commission is recommending an increase in the National Minimum Wage of 50 cent per hour. In its first report the Commission, which is tasked by Government to advise on the appropriate rate of the minimum wage, concludes that the National Minimum Wage should rise by 5.8% to €9.15 per hour.
The current rate of the minimum wage is €8.65. The minimum wage was last increased in 2011 by €1 to €8.65, following a cut of a similar amount imposed by the previous Government earlier in 2011.

In a comprehensive report submitted to Minister for Business and Employment, Ged Nash TD, the Low Pay Commission sets out a range of data it has considered in recommending the 50 cent increase. Commissioners also sought submissions from interested parties and consulted directly with workers on the minimum wage and employers in relevant economic sectors.

In making its recommendation, the Low Pay Commission sets out a range of considerations it has taken into account, including:

• The available evidence suggests that moderate increases in the minimum wage will not lead to significant loss of jobs
• The Irish economy is recovering although it still faces risks particularly in the external environment
• The number of people in employment is increasing
• Unemployment remains high but has declined particularly in the last year
• Competitiveness has improved, partly due to exchange rate movements and it is important that this trend is maintained
• While inflation has been relatively low, the minimum wage has effectively remained at its current level for the past 8 years
• It is of critical importance to enterprise development that the design of both the tax and PRSI systems creates the right conditions for job creation, including the incentives (from both employer and employee perspectives) for employees to work additional hours and to increase pay where appropriate.

Taoiseach Enda Kenny TD said, "This Government believes that a job is the only sustainable route out of poverty, that work should pay more than welfare, and no household with a person in full time work should be in poverty. The establishment of the Low Pay Commission is a key part of this strategy. The recommendations of the Low Pay Commission will be addressed in the Budget in October, alongside changes to the taxation system and the welfare system, so that all elements of our plan to make work pay will reinforce each other."

Tánaiste Joan Burton TD said, “When I became Labour Party Leader and Tánaiste, I immediately put the establishment of the Low Pay Commission on the agenda to ensure the Minimum Wage was reviewed in an evidence-based way on an annual basis. The evidence is now in, the Commission’s recommendation is clear and I look forward to implementing that recommendation in due course. Any potential anomaly in the PRSI system arising from the Commission’s recommendations will be addressed at the appropriate time in the context of the Budget. This Government has brought about economic recovery and we can build a decade of growth, jobs and opportunity on that foundation and raise living standards across the board. Increasing the minimum wage in line with the independent Commission’s recommendation will be an important part of that process.”

Minister for Jobs, Enterprise and Innovation Richard Bruton TD said, “At the heart of what we are trying to do as a Government is to grow jobs and improve living standards for families and communities across the country. The Low Pay Commission is the correct way to assess the level of the National Minimum Wage (NMW) – a balanced, non-political Commission tasked with assessing the level of the NMW based on evidence, taking into account issues including job-creation and competitiveness. The report they have presented today is balanced, measured, and very welcome. Government will now consider it in detail in the context of the Budget, and we will ensure that any knock-on impacts are addressed”.

Minister Nash said, “Making work pay is a cornerstone of the Government’s dignity at work agenda. For a full time worker on the national minimum wage hourly rate, a 50 cent per hour increase will mean a pay rise in excess of €1,000 per year. There are some 120,000 workers who are likely to benefit from such an increase. The establishment of the Low Pay Commission illustrates the Government’s determination to tackle the challenge of low pay in a structured and sustainable fashion.”

Minister Nash also thanked the Commissioners for their service and those who met with the Commission or made submissions to it in the course of its work.

Chairperson of the Low Pay Commission, Dr Donal de Buitléir said, “I am very pleased to have successfully completed the first task that was assigned to the new Low Pay Commission, which was to recommend an appropriate rate for the National Minimum Wage. The Members of the Commission have been appointed for a three-year period, so we see this as the first step in the process of coming to a better understanding of the impacts of low pay in Ireland on both employees and employers. We look forward to tackling some of the other aspects of the low pay environment which we expect the Minister to ask us to engage with over the coming years.”

This is the first report from the Low Pay Commission, which will review the National Minimum Wage on an annual basis and other related matters.

ENDS

For more information contact:
Deirdre Grant, Special Adviser to Minister Nash on 086 0484 279
or DJEI Press Office 01 631 2200,
press.office@djei.ie

Editors’ Notes:
The Low Pay Commission Report is available at www.lowpaycommission.ie

The membership of the Low Pay Commission is:

The Commissioners examined a range of issues in considering the appropriate rate of the National Minimum Wage, including:

• the changes in earnings since the minimum wage was last increased in 2011
• the unemployment and employment rates generally 
• the expected impact of a change to the minimum wage on employment, the cost of living and national competitiveness
• changes in income distribution and
• currency exchange rates